Support NeoGAF

Dr. Feel Good · Aug 14, 2017

Colbert said:
You may have seen my response below.

Let me ask a simple thing ? Lets assume your not into anything near accounting in your company you working with. Do you know if a product line (not a division) is profitable or not? Do you get info beyond that margins are above or below expectations from internal communications or you were able to increase margins by 0.1 points? I am really curious about that!

As someone who Has worked for two Fortune 500 company who has worked in internal finance/accounting and promoted to other areas I 100% know people outside finance and accounting know how product divisions are performing, even at low levels. General managers are almost always going to have viability into their performance to make sure they are meeting budgets and long term targets. This is almost always cascaded down to relevant folks.

You are delusional if you think otherwise.

Jaguar Victory · Aug 14, 2017

Dr. Feel Good said:
As someone who Has worked for two Fortune 500 company who has worked in internal finance/accounting and promoted to other areas I 100% know people outside finance and accounting know how product divisions are performing, even at low levels. General managers are almost always going to have viability into their performance to make sure they are meeting budgets and long term targets. This is almost always cascaded down to relevant folks.

You are delusional if you think otherwise.

And how many of these companies tolerated losing divisions for 60+ quarters? Right, none.

Drek · Aug 14, 2017

Colbert said:
Arrogant?

To share such internal information to an outside "insider" even he worked for MS in the past can cost you your job (regardless of position in the hierarchy) and in worst case you go to jail (the person shares the info not the one receives it unless the info is used for insider-trade).

I double down on Thurrot doesn't have any info on internal cost and profit structures! He has the same info we all have from balance sheets, P&Ls and investor call/meeting slides plus maybe some valuations from his contacts.

And even so such info isn't even shared internally other than need to know and I don't think people in the know would risk their career for such a thing!

It's far more likely a senior manager within Microsoft outright said "The Xbox division has never turned a profit, ever."

Nadella is only engaging in wordplay as far as the layman is concerned. His audience for shareholder discussions are people who understand that talking explicitly about revenue and revenue only, followed by "growing profitably" means "we're still losing money, but have substantially staunched the bleeding while growing revenue", i.e. the newer lines of business they're opening up aren't loss leaders like the older lines they're still carrying.

Not particularly surprising. They've been hit with some major hardware overrun every generation. Selling the original Xbox at a huge loss to get their foot in the door, the X360's RROD repair program and all the redesign needed to fix that problem, and most recently retrofitting the XB1 to first remove always online DRM from the OS built around having it at the last minute, then removing the need for Kinect, then designing the S to get around some of the original version's poor design choices, then the XB1X. None of these have been cookie cutter OS tweaks or internal layout adjustments to fit a smaller case. They've all been a meaningful modification to some basic component of the system.

None of that is cheap and doing all of that with only a couple of software selling IPs while also fully funding AAA titles from external studios without a single breakout hit is a hard way to make profit in this industry.

Nightengale · Aug 14, 2017

anothertech said:
My point exactly. So what we know for sure is that we actually know shit about Xbox profitability unless we hypothesize tales from our ass

I agree.

All I'm saying is that even "today", it's not impossible that Xbox can still be in the red on a fiscal year basis due to the low-margin nature of the business. Anything else is broadly speculative.

Colbert · Aug 14, 2017

Dr. Feel Good said:
As someone who Has worked for two Fortune 500 company who has worked in internal finance/accounting and promoted to other areas I 100% know people outside finance and accounting know how product divisions are performing, even at low levels. General managers are almost always going to have viability into their performance to make sure they are meeting budgets and long term targets. This is almost always cascaded down to relevant folks.

You are delusional if you think otherwise.

If you read my comment carefully I excluded "division level" from my statement. I did that because of course you know that status of profitability of your devision. But there is no Xbox division within Microsoft at the moment that is reported to the public (or I have overseen it). If we had a Xbox division numbers the discussion would be very easy as we would see them in their investor call/meeting slides.

Good for you to have such a nice career.

leeh · Aug 14, 2017

Nightengale said:
I agree.

All I'm saying is that even "today", it's not impossible that Xbox can still be in the red on a fiscal year basis due to the low-margin nature of the business. Anything else is broadly speculative.

Although, you're thinking this just in-terms of hardware right? There's obviously all the XBL subs, transactions and software royalties which must be a lot higher margin and must make up a large majority of their revenue streams. There's the cost of infrastructure which is obviously expensive, but considering what they have already, it must be more than a 6% margin, that seems bonkers if not.

faridmon · Aug 14, 2017

I can never comprehend how a a company gets a free reign of losing money through its entirety of its existence. Isn't the point of a business to turn a profit?

Maybe this is why I am not and will never be a business man.

hydrophilic attack · Aug 14, 2017

leeh said:
Although, you're thinking this just in-terms of hardware right? There's obviously all the XBL subs, transactions and software royalties which must be a lot higher margin and must make up a large majority of their revenue streams. There's the cost of infrastructure which is obviously expensive, but considering what they have already, it must be more than a 6% margin, that seems bonkers if not.

Like I showed on the last page, Sony only has a 5% margin even though they have a lot more of that good stuff as the reigning market leader

Nightengale · Aug 14, 2017

leeh said:
Although, you're thinking this just in-terms of hardware right?

No.

FOR THE ENTIRE BUSINESS.

leeh said:
There's obviously all the XBL subs, transactions and software royalties which must be a lot higher margin and must make up a large majority of their revenue streams. There's the cost of infrastructure which is obviously expensive, but considering what they have already, it must be more than a 6% margin, that seems bonkers if not.

Sony's PlayStation business, which has hardware sales, PS+ subs, software royalties, transactions, and all of the above... has 6-8% profit margin last year.

And so far the past quarter? 5% profit margin.

Chobel · Aug 14, 2017

Colbert said:
If you read my comment carefully I excluded "division level" from my statement. I did that because of course you know that status of profitability of your devision. But there is no Xbox division within Microsoft at the moment that is reported to the public (or I have overseen it). If we had a Xbox division numbers the discussion would be very easy as we would see them in their investor call/meeting slides.

Good for you to have such a nice career.

I'm pretty sure there is: https://venturebeat.com/2017/04/27/...-division-generated-1-9-billion-last-quarter/... Or you're talking about something else?

Colbert · Aug 14, 2017

Chobel said:
I'm pretty sure there is: https://venturebeat.com/2017/04/27/...-division-generated-1-9-billion-last-quarter/... Or you're talking about something else?

Looking into the last quarterly report "Xbox" or "Gaming" is part of "Personal Computing" in their report. And the only numbers they report are "Revenue" for "Gaming" and "Active Users" for "Xbox". It isn't even clear if "Gaming" = "Xbox" as they also publish games for PC and Mobile. For example does "Microsoft Game Studios" belong to Xbox or Gaming?

Source: https://view.officeapps.live.com/op...?version=c9735c19-0baa-103d-2a4e-bacd46514428

Looking into the numbers I see growth in Revenue overall (Gaming). If their cost of operation (for Gaming) did not increase by a higher margin then the revenue growth they increased profitability. What we don't know for sure is the base margin of that profitability where I derive from the data available it is positive for YTD2017 and negative for LTD.

hydrophilic attack · Aug 14, 2017

Also, people should consider that (due to lower hardware installed base gen over gen) together with franchise fatigue, sales of microsoft-published games are down compared to last gen, while developing costs, industry-wise, are higher than ever

Chobel · Aug 14, 2017

Colbert said:
Looking into the last quarterly report "Xbox" or "Gaming" is part of "Personal Computing" in their report. And the only numbers they report are "Revenue" for "Gaming" and "Active Users" for "Xbox". It isn't even clear if "Gaming" = "Xbox" as they also publish games for PC and Mobile. For example does "Microsoft Game Studios" belong to Xbox or Gaming?

Source: https://view.officeapps.live.com/op...?version=c9735c19-0baa-103d-2a4e-bacd46514428

Looking into the numbers I see growth in Revenue overall. If their cost of operation (for gaming) did not increase by a higher margin than the revenue growth they increased profitability. What we don't know for sure is the base margin of that profitability where I say it is positive (YTD) and negative (LTD).

Help me here, how is this (and your posts before it) a proof that Thurrott doesn't have any access to the info of whether Xbox is profitable or not?

And gaming = Xbox now.

Neff · Aug 14, 2017

I thought it was widely-known.

The common thinking is that Xbox is a good advertisement for MS and its products, and that the potential for Xbox to be profitable, while as yet unproven, is perhaps one day there. Xbox has historically always been dragged down by crippling issues, but MS has shown that they're able to rectify those issues (while at the same time creating all-new ones). Theoretically they could get it right one day.

But I wouldn't be surprised if the powers that be have finally decided 'enough's enough'. A big problem with MS and Xbox is that they simply do not and never have instinctively known how the games industry works. They spend a lot of money, make informed guesses which don't paint an accurate picture, and make ham-fisted, premature, reactionary decisions which gets them nowhere.

Nintendo and Sony 'get it', but MS still struggles to find its place.

pswii60 said:
It's been painfully obvious just how much Xbox budgets have been cut over the last 10 years. Just compare now to what MS was doing in 2006/2007 in terms of first party, exclusives and huge marketing spends. I remember when MS had Xbox on the front of almost every free newspaper in Europe.

Back then there seemed to be no limit. Now we'll be lucky if they even invest in a new Gears. Xbox One X will launch with a mild whimper.

This feels like an accurate summary.

Bluth54 · Aug 14, 2017

Colbert said:
Arrogant?

To share such internal information to an outside "insider" even he worked for MS in the past can cost you your job (regardless of position in the hierarchy) and in worst case you go to jail (the person shares the info not the one receives it unless the info is used for insider-trade).

I double down on Thurrot doesn't have any info on internal cost and profit structures! He has the same info we all have from balance sheets, P&Ls and investor call/meeting slides plus maybe some valuations from his contacts.

And even so such info isn't even shared internally other than need to know and I don't think people in the know would risk their career for such a thing!

People in the government and in companies leak stuff all the time despite the risks of being caught. It doesn't seem crazy to me that someone like the author of that article would still have friends at Microsoft and hear things from them. I get told things all the time that I shouldn't know from friends I've made in my company that work in different departments.

Given what we know about the high costs and losses of the first Xbox, the RRoD with the 360 and the way Microsoft has been cancelling projects and closing studios this gen this news doesn't seem that crazy. I'm sure there's been some profitable quarters but overall I wouldn't be shocked to find out that the Xbox division has never really been profitable.

Mass_Pincup · Aug 14, 2017

Rule of thumb:

If they outright don't say it in their fiscal reports it most likely means that they're not turning a profit on it.

Rellik · Aug 14, 2017

I've never been under the impression that the Xbox division is profitable. It's known that they burned through money to try and compete.

hotcyder · Aug 14, 2017

As long as it's a Trojan Horse for people using Microsoft products like Office and their enterprise solutions, I'm sure they'll keep it around.

CaptainClaw · Aug 14, 2017

Neff said:
I thought it was widely-known.

But I wouldn't be surprised if the powers that be have finally decided 'enough's enough'. I big problem with MS and Xbox is that they simply do not and never have instinctively known how the games industry works. They spend a lot of money, make informed guesses which don't paint an accurate picture, and make ham-fisted, premature, reactionary decisions which gets them nowhere.

Nintendo and Sony 'get it', but MS still struggles to find its place.

This feels like an accurate summary.

Not really I believe your cherry picking...Nintendo and Sony have had their fair share of struggles...may I remind you

- Sony's arrogant 599 price tag
- Their 2010 PSN hack
- Poor Support for the PS Vita
- Nintendos Lack of Online and HD implementation
- Nintendos Wii U marketing and Launch lineup

Colbert · Aug 14, 2017

Chobel said:
(b) Help me here, how is this (and your posts before it) a proof that Thurrott doesn't have any access to the info of whether Xbox is profitable or not?

(a) And gaming = Xbox now.

(a)
how I read it-> Gaming > Xbox:
includes Xbox HW
includes XBox Live Services
includes MS Game Studios games for Xbox Hw
but also includes PC Hw and iOS & Android Hw + other consoles

(b)
I doubt Thurrot has concrete actual numbers, yes.

His certainty may rely on something that was said to him. We don't know how accurate that info is and to what if references to (just a quarter, includes cost of restructuring)? There are a lot of unknown variables here as he talks about "transformation" which could point to "restructuring" costs. Maybe it is not profitable because of the restructuring but would be without that cost? Just from the numbers and the subtext given by MS to its investors it says "profitable". I don't think MS would risk false information in material going to their investors!

leeh · Aug 14, 2017

hydrophilic attack said:
Like I showed on the last page, Sony only has a 5% margin even though they have a lot more of that good stuff as the reigning market leader

Nightengale said:
No.

FOR THE ENTIRE BUSINESS.

Sony's PlayStation business, which has hardware sales, PS+ subs, software royalties, transactions, and all of the above... has 6-8% profit margin last year.

And so far the past quarter? 5% profit margin.

There's a very big difference between the two though which will have a big effect on margins and that's their infrastructure.

One of their biggest cost, or their biggest cost will be their infrastructure bills. Sony pay Amazon, but MS run theirs in-house. The cost savings of that will be huge.

Colbert · Aug 14, 2017

leeh said:
There's a very big difference between the two though which will have a big effect on margins and that's their infrastructure.

One of their biggest cost, or their biggest cost will be their infrastructure bills. Sony pay Amazon, but MS run theirs in-house. The cost savings of that will be huge.

Just because they run their infrastructure in-house means they are more cost efficient. It really depends

Sometimes its better to have less CAPEX and in favor of OPEX. And there are times its better the other way around.

jelly · Aug 14, 2017

I don't doubt overall they are probably in the red, they were with the original Xbox but the 360 was probably making good profit post RROD and the Xbox One likely is as well after the initial splurge. The investment is huge and how many companies make that back or are future profit margins the key?

Doesn't matter, Microsoft need Xbox, they have nothing except Minecraft to reach mass consumers. It's the gateway.

leeh · Aug 14, 2017

Colbert said:
Just because they run their infrastructure in-house means they are more cost efficient. It really depends Sometimes its better to have less CAPEX and in favor of OPEX. And there are times its better the other way around.

Which is a fair point if they weren't experienced in the area themselves, but as they're one the top 3 giants in cloud so I'd be shocked if it wasn't more cost effective by a large margin.

As someone who uses AWS daily, it gets very costly, very quickly.

Colbert · Aug 14, 2017

leeh said:
Which is a fair point if they weren't experienced in the area themselves, but as they're one the top 3 giants in cloud so I'd be shocked if it wasn't more cost effective by a large margin.

As someone who uses AWS daily, it gets very costly, very quickly.

The question is would to do it on your own be more or less expensive?

But you are right, it is likely the case that MS as a cloud services provider themselves have a bigger cost advantage here. But it doesn't mean that Sony also could have a cost advantage there because maybe it would cost more to do it by themselves.

Kayant · Aug 14, 2017

I can definitely believe this especially based on that wording used by Nadella.

If he can boast clearly about the revenue amount but then instead chooses to not be so clear when it comes to profits then something is up. It's typically behaviour when companies want to hide/obfuscate reality.

leeh · Aug 14, 2017

Colbert said:
The question is would to do it on your own be more or less expensive?

But you are right, it is likely the case that MS as a cloud services provider themselves have a cost advantage here. But it doesn't mean that Sony also could have a cost advantage there because maybe it would cost more to do it by themselves.

Well, since XBL ties heavily into the Azure platform, you'd expect the very costly aspects of infrastructure is subsidised by hooking Azure in (DC, Co-location, Tier 1 links etc). If Sony was to-do this themselves, they'd either have to co-locate in a DC or set something up themselves and both options are very pricey.

The markup on AWS is big, but it's great value for money in the market, but considering the scale of PSN, it will be very cost ineffective in comparison to XBL.

To me, this is evident by looking at how both networks handled the large scale DDoS' back in '14/'15, with XBL taking a whole lot more to bring down than PSN did. To me, it shows they're correctly leveraging their platforms and know what they're doing, which brings along the cost savings.

So they should though, it'd be commercially and publicly embarrassing if not.

Castef · Aug 14, 2017

https://www.gamespot.com/forums/sys...onfirms-xbox-business-is-profitable-33390826/

hydrophilic attack · Aug 14, 2017

Castef said:
https://www.gamespot.com/forums/sys...onfirms-xbox-business-is-profitable-33390826/

did you read anything other than the title of that thread

lol

(nowhere does he say it's profitable)

e: are you saying that some of the discussion itt is as dumb as that thread

Colbert · Aug 14, 2017

leeh said:
Well, since XBL ties heavily into the Azure platform, you'd expect the very costly aspects of infrastructure is subsidised by hooking Azure in (DC, Co-location, Tier 1 links etc). If Sony was to-do this themselves, they'd either have to co-locate in a DC or set something up themselves and both options are very pricey.

The markup on AWS is big, but it's great value for money in the market, but considering the scale of PSN, it will be very cost ineffective in comparison to XBL.

To me, this is evident by looking at how both networks handled the large scale DDoS' back in '14/'15, with XBL taking a whole lot more to bring down than PSN did. To me, it shows they're correctly leveraging their platforms and know what they're doing, which brings along the cost savings.

So they should though, it'd be commercially and publicly embarrassing if not.

We all know (from our own experience in that time frame) that PSN had and presumably has some room for improvement compared to Xbox Live from a Quality of Service and security aspects POV. (no offense). But downtimes for PSN has decreased noticeable recently (from what I saw), so they make progress there.

Colbert · Aug 14, 2017

hydrophilic attack said:
did you read anything other than the title of that thread

lol

(nowhere does he say it's profitable)

I don't think he was saying anything like that. Just from the article you are totally right it is not saying that. But from a strategic POV for Nadella the Xbox business contributes added value for the other business too that may not reflected in the pure numbers of the Xbox business.

Kayant · Aug 14, 2017

Castef said:
https://www.gamespot.com/forums/sys...onfirms-xbox-business-is-profitable-33390826/

😂😂😂

DieH@rd · Aug 14, 2017

Shubh_C63 said:
Well it was common knowledge that X360 didn't turn a profit because RROD and their return program.

But XB1 ? Not even a dime profitable ?

Do you remember first 6 months of Xbone's (poor sales) time on market? That was the time when MS (after gigantic R&D spending and focus on TV&Sports) did loose money on xbone hardware. Then they slashed prices, prolonged holiday offers, had several meh sales of 1st/2nd party games, and stil, the sales remained good only in the US. Outside of it, it was a bloodbath.

Today they have small instal base, hardware that is maybe still sold at loss(?), they strugle at diversifying in AAA space, and they have another R&D spend for Scorpio...

leeh · Aug 14, 2017

Colbert said:
We all know (from our own experience in that time frame) that PSN had and presumably has some room for improvement compared to Xbox Live from a Quality of Service and security aspects POV. (no offense). But downtimes for PSN has decreased noticeable recently (from what I saw), so they make progress there.

Yeah, this is what I'm getting that.

The improvements in that area in practical terms was most definitely just increasing their ceiling of budget for elastic scaling in AWS, or they could of been lacking that functionality in the first place. All that increases their cost and tightens that margin.

Whereas for MS, they're running on infrastructure they own so the cost difference is nil or they're renting at cost from the Azure division.

Nightengale · Aug 14, 2017

I have no comment on the potential differences in operational cost impact due to difference in infrastructure setup since I have limited expertise and visibility there.

hydrophilic attack · Aug 14, 2017

Colbert said:
I don't think he was saying anything like that. Just from the article you are totally right it is not saying that. But from a strategic POV for Nadella the Xbox business contributes added value for the other business too that may not reflected in the pure numbers of the Xbox business.

Well, that's a valid point

It's also kind of straw you would grasp for to justify business that has been unprofitable for well over a decade

Machina · Aug 14, 2017

If you don't want to do it anymore MS, then don't.

Bitch Pudding · Aug 14, 2017

legend166 said:
The raison d'être of the entire Xbox product line has pretty much ceased to exist.

Microsoft got into the market because they thought the next stage of development in computing was the whole "battle for the living room". That personal computing would move from the PC to the loungeroom, and whatever device was under the TV would be the most important thing in the house.

They see Sony selling 100 million PlayStations and think it's a threat to Windows, because if people transition from the PC to 'set top boxes', they won't be running Windows and they won't be buying Office. So that's why Microsoft got into console gaming in the first place and why they were willing to spend billions pushing what by any metric has been a spectacularly unprofitable product line.

You could still see it in their Xbox One strategy - how much time did they spend during the launch build up talking about the set top box capabilities? Going back to the 360, it was definitely instrumental in the push towards apps on TV (Netflix, Hulu, etc, etc).

The problem is, while Microsoft is focusing on winning your living room they let Apple and Google win your pockets, which is where personal computing actually went to after the PC. Meanwhile, people can replicate all those functions Microsoft were pushing beginning with the 360 using $40 dongles, or even better, they're all just built directly into the TV. And they're running Android!

So a decade ago that division seemingly had a blank cheque to do whatever they wanted because it was seen as the future of Microsoft's core business (personal computing operating systems). Now, not only is it clear that set top boxes that control the living room are clearly not the future, Microsoft's actual core business has pivoted hard to enterprise. So the Xbox business can't be a loss leader any more. It needs to be run as a profitable business by itself. Obviously Microsoft think they can do this or they would have pulled the plug.

The question is how do they react after the Xbox One ends up selling something like 40% less than its predecessor. Is it worth it for the MAUs? I'm very curious to see what they do after the One X and if they launch a new device against the PS5.

I agree with that. And cross play is nothing else than the continuation of their strategy: Using XBOX as a leverage for Windows 10. It has all come down to this.

As long as Nadella thinks that the XBOX division contributes to pushing their Windows platform, the division will be fine, they don't even have to be profitable.

But the second Nadella comes to another conclusion - AND the division (still) isn't profitable - it surely is in deep trouble.

Colbert · Aug 14, 2017

hydrophilic attack said:
Well, that's a valid point

It's also kind of straw you would grasp for to justify business that has been unprofitable for well over a decade

Well not all strategic objectives needs to measured by revenue or profit. There are the ones based on customer satisfactions or "active users" like Xbox which gives you a good base to estimate and plan your business based on revenue per active user and profit by active user from the data history. You may also being able to measure the indirect impact from those numbers on the other business segments (if there are some) e.g. brand loyality.

bitbydeath · Aug 14, 2017

Jaguar Victory said:
And how many of these companies tolerated losing divisions for 60+ quarters? Right, none.

This is Microsoft though, the ones who spent over 100 million just on the XB1 controller which had barely changed from its predecessor.

mikezilla2 · Aug 14, 2017

not surprised and they are probably the only game compney that Can do this

wapplew · Aug 14, 2017

Bitch Pudding said:
I agree with that. And cross play is nothing else than the continuation of their strategy: Using XBOX as a leverage for Windows 10. It has all come down to this.

As long as Nadella thinks that the XBOX division contributes to pushing their Windows platform, the division will be fine, they don't even have to be profitable.

But the second Nadella comes to another conclusion - AND the division (still) isn't profitable - it surely is in deep trouble.

So they are far from trouble.
Xbox bring them new MS account users, bring usage for Bing, Cortana, major reason people use windows store etc.
Xbox are indeed critical part of MS grand strategy going forward.

ItalianJoe83 · Aug 14, 2017

Why I'm not surprised?

HueyFreeman · Aug 14, 2017

Correct me if I'm wrong but I recall the original introduction of the Xbox was - though not directly stated as such - as a bulwark for Microsoft against sonys stated intention to gain traction as a central computing device for your home - ie. stepping on MS' PC domination. In that way, it might be artificial to look at the lack of direct profit for the Xbox brand in isolation as a problem. The actual economic impact of keeping Sony at bay and potentially preventing them from turning PlayStation into a very different multimedia focused concept the PS3 years suggested is probably incalculable.

To say nothing of the very healthy efffect all of this has had on the market overall in terms of driving innovation. I love Sony but man I can't imagine how far their head would be up their own ass without Microsoft keeping them in check along the way (and vice versa it would seem)

semiconscious · Aug 14, 2017

wapplew said:
So they are far from trouble.
Xbox bring them new MS account users, bring usage for Bing, Cortana, major reason people use windows store etc.
Xbox are indeed critical part of MS grand strategy going forward.

well, i'd say they're still part of the strategy. now, a 'critical' part? i'd say the jury's still out on that one

...

LOCK · Aug 14, 2017

This is not a surprise to SalesGAF.

Cynn · Aug 14, 2017

bitbydeath said:
This is Microsoft though, the ones who spent over 100 million just on the XB1 controller which had barely changed from its predecessor.

Money well spent in my opinion. The Xbox One controller is the best ever made for me.

Heigic · Aug 14, 2017

faridmon said:
I can never comprehend how a a company gets a free reign of losing money through its entirety of its existence. Isn't the point of a business to turn a profit?

Maybe this is why I am not and will never be a business man.

Because at the very least it is just a marketing budget. Get people to like Xbox and they will be more likely to buy a Windows laptop.

texhnolyze · Aug 14, 2017

I actually never knew this.

Rellik said:
I've never been under the impression that the Xbox division is profitable. It's known that they burned through money to try and compete.

For more than one and a half decade? That's some dedication from Microsoft.

Chris1 · Aug 14, 2017

hydrophilic attack said:
Like I showed on the last page, Sony only has a 5% margin even though they have a lot more of that good stuff as the reigning market leader

how is that even a fair comparison? there's so many differences between both companies that says absolutely nothing about how the other is doing.

- as leeh said, MS uses their own cloud server vs Sony renting AWS
- Sony's exclusives are mostly single player whereas MS are mostly multiplayer with microtransactions
- 17 first party vs 5
- Sony has basically every marketing deal whereas MS has like.. two?
- Sony has more second party games that they fund
- Xbox has Minecraft, Is havok under Xbox or MS? Because maybe that too. (Edit: Havok was announced on microsoft.com so I'm guessing MS). What about Beam?
- Xbox has multiple additional ways to make money (name changing, ea access, game pass, BC)
- Xbox puts their games on PC

You could say "but Sony sold 2x the amount of consoles and sell more games" which while true, you could argue wether the above differences outweigh that or not.

There's so many differences between each company, sitting here and saying "Sony only profited 5%, so MS must be less than 5%" is just silly and has no weight behind it at all when Sony clearly spends much more than Xbox is. Percentages mean absolutely nothing. For example Sony could spend 1 million a month and make back 1,050,000 whereas Xbox could be spending 500,000 each month and making back 550,000. Exact same profit but xbox profit % is higher.

Support NeoGAF

Tech journalist and Microsoft insider Paul Thurrott: "Xbox has never been profitable"

Banned

Member

Member

Member

Banned

Member

Member

Member

Member

Member

Banned

Member

Member

Member

Member

Banned

Member

Member

Member

Banned

Member

Banned

Member

Member

Banned

Member

Member

Banned

Member

Banned

Banned

Member

Banned

Member

Member

Member

Banned

Member

Banned

Member

Member

Member

Member

Banned

Member

Member

Member

Member

Banned

Member

Similar threads