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[StealthGoblin]

This year they've probably spend a sizable amount on EA and Capcom exclusives.

 

[Manmademan]

So what's the speculation about what those android patents are? I would think most licenses google has to pay would come from apple. How does MS make so much money from android licensing?

Android phones are designed to largely be plug and play with PCs. Microsoft owns many, many patents related to the dominant PC operating system and filesystem. PC interoperability is critical to android, they can't drop it.

Android likely isn't paying much to apple if anything at all. no one cares about MacOS.

 

[borghe]

Rare only worked on 1 kinect titles and a half (Kinect Sports 1 & 2), and they were big sellers.

Read the canceled Rare projects thread. Rare has worked on a ton of software, plenty that's even gotten to a playable point, that was then canceled.

Android phones are designed to largely be plug and play with PCs. Microsoft owns many, many patents related to the dominant PC operating system and filesystem. PC interoperability is critical to android, they can't drop it.

Android likely isn't paying much to apple if anything at all. no one cares about MacOS.

That has nothing to do with it. Smh. It's patents covered under the Nortel patent portfolio that the consortium bought out. It covers 3G and wireless communication. Pretty sure they are also licensed out under FRAND as essential. Last I read estimates (which is likely what te analyst is going by) either MS or the consortium (don't remember which) sees about $10 per android device sold.

 

[NolbertoS]

Its believable. Xbox One could be Xbox Done, if they keep hemorraging money. You can see how investors keep saying to sell the Xbox Division as they're privy to more internal financials than GAF. MS can't keep money hatting forever. Gives you more respect for the Big N that they somehow don't hemorrage money at all, even though they're not the market leader in the videogame industry. Guess we'll see how this next gen pans out in 5-8 years

 

[we.are.the.armada]

Yeah that isn't good - maybe they should just 86 it after this gen I dunno :/

 

[szaromir]

Read the canceled Rare projects thread. Rare has worked on a ton of software, plenty that's even gotten to a playable point, that was then canceled.

You're kidding yourself if you think other studios don't have a ton of cancelled prototypes.

 

[K' Dash]

Shit would be bad if MS jumped out of the console race.

 

[borghe]

You're kidding yourself if you think other studios don't have a ton of cancelled prototypes.

I never said they didn't. The post I responded to said "rare only works on" and I was pointing out that rare has worked on a ton more than that this gen, which was all paid for in salaries, equipment, software, etc. It is highly believable that as a development team rare has been losing money overall.

 

[skc]

Who is claiming this? It's well known that the PS3 was an enormous money sink for Sony.

My point is, if even Microsoft are losing money in this business, what the hell are Sony doing in it?

 

[Manmademan]

That has nothing to do with it. Smh. It's patents covered under the Nortel patent portfolio that the consortium bought out. It covers 3G and wireless communication. Pretty sure they are also licensed out under FRAND as essential. Last I read estimates (which is likely what te analyst is going by) either MS or the consortium (don't remember which) sees about $10 per android device sold.

they were doing that before the nortel patent buy. According to barnes and noble, none of it was related to 3G communication. it was all "OS" and "look and feel" related.

http://www.networkworld.com/community/blog/barnes-noble-blows-lid-microsofts-android-pat

 

[ShinMaruku]

Asking myself that, considering live generates an assload of money I bet

The hole by the orignal xbox is so profound that those gains are NOTHING compared to the hole they must fill to recoup to then make a profit.

 

[Dunlop]

The hole by the orignal xbox is so profound that those gains are NOTHING compared to the hole they must fill to recoup to then make a profit.

Those losses were written off years ago

Using this logic it would be impossible for the ps4 to ever turn a profit after the black hole of debt the ps3 caused

 

[LordBaztion]

Asuming those numbers are correct, and I don't even want to think how Sony's numbers are, this is anothe hint that next gen will be open hardware.

 

[twobear]

That's precisely why Allen wants out of Xbox/WP/consumer and wants to make Windows more suitable for corporate clients again. He, along with many others, believes that MS are risking their enterprise income to chase the consumer market which, while profitable, is not even in the same league as enterprise and B2B income.

I'm not passing judgment on the effectiveness of their strategy, I'm just saying that I think it's absurd to say that PS4 will shift Bravias but that it's impossible for Xbone to shift Surfaces. Especially when you consider that Sony are in pretty much the same position: they make most of their money through the financial arm, meaning that their technology arm is no longer their 'core business'.

I'll go back to the point made by Allen and others, whether or not MS want WP to be a core part of their business is irrelevant because it isn't. Like you said, this is after years of trying having spent billions on doing it, the latest being $7.5bn on buying Nokia's devices division. It is still a pitiful revenue generator and it eats into company development budgets and massively into the marketing pot. And it still isn't a core business.

Skydrive is cross platform, so I don't get what the problem is. I can get Skydrive on Android.

Isn't Nokia doing better in the US that Sony is, now? They seem to be making some ground.

And the storage side of Skydrive is cross-platform, but the settings/account sync stuff isn't, which is the enticing but.

 

[SparkTR]

My point is, if even Microsoft are losing money in this business, what the hell are Sony doing in it?

Sony are losing money right now, looking at the financials. There'll be profit in it eventually, but it'll be razer thin at best most likely. This is fine for Sony, a company that's desperate enough to soak up revenue anywhere due to their other failing divisions, but it's not ideal for Microsoft, whose money may be better spent in more lucrative markets.

 

[KungFucius]

It's about the whole Xbox Division, so both, for the past two years it will essentially be 360 profits - XB1 costs = -2 billion.

Well that is pretty disingenuous then. They developed a new system paid for the marketing and the manufacture of millions of units most of which will be sold in the next 2 quarters and this is how someone reports about these things. Jesus. And I thought the analysts covering the semiconductor industry were ignorant twats. 2 billion per year implies some kind of average and regardless of how this is computed it is misleading when one year is a huge investment that has yet to have a chance to pay off.

Financial analysts as a class of professionals are the lowest form of incompetent scum especially when you consider that the drivel they shit forth on to the internet can have an impact on the value of a company and hence all it's employees and shareholders. Fuck this asshole, I am going to buy 2 Xbones and burn one in his name.

 

[Lynn616]

No they don't. They have a 10 year non-exclusive licence to patents associated to Nokia's devices division. Nokia retailed all of the IP.

They also bought 8500 of Nokias design patents. MS owns those outright.

 

[JayFalcon]

NINTENDO please buy XBOX

 

[iceatcs]

Yeah I can see it can be make sense, especially after the massive android patent royalties and the E&D still low profit.

 

[Ouroboros]

I'd blame the loss more on Windows Phone (and surface?) more so than the actual Xbox division...

 

[Nightengale]

Especially when you consider that Sony are in pretty much the same position: they make most of their money through the financial arm, meaning that their technology arm is no longer their 'core business'.

Sony is profiting more from their financial arm, but technology is still their core business. Big difference.

Isn't Nokia doing better in the US that Sony is, now? They seem to be making some ground.

Sony isn't even trying to compete in the US market at the time being.

Their smartphone strategy right now is focused a lot in Europe and Japan, where they're doing relatively well.

My point is, if even Microsoft are losing money in this business, what the hell are Sony doing in it?

Because Sony has identified the business as a core differentiator in their line-up.

Samsung and LG are easily eating Sony's electronics lunch, but Playstation is something that not anyone can easily replicate as a business.

 

[Interframe]

How?

Seriously how is it the Xbox division hemorrhaging money like that?

Xbox is a hardware product, thus the budget required for R&D is massive, much bigger than a mobile operating system or a simple tablet, where the component costs of a tablet are probably cheaper due to heavy consumer demand of tablets (as opposed to a video game console).

Anyone who says "lolwut it's probably Windows Phone and Surface" maybe needs a reality check. The Xbox is in a niche market compared to Windows Phone and Surface, even if those two products aren't successful, they are in a much bigger and important market than video game consoles, and as it turns out, they are probably cheaper to fund/develop for.

 

[mangochutney]

My point is, if even Microsoft are losing money in this business, what the hell are Sony doing in it?

What do you mean if even MS?

You mean the MS that spends $500m on Kinect advertising, hundreds of millions a go on exclusive deals like NFL or timed-exclusive DLC?

It is easy to see how they can lose so much.

 

[ShinMaruku]

Those losses were written off years ago

Using this logic it would be impossible for the ps4 to ever turn a profit after the black hole of debt the ps3 caused

You will have to provide evidence that the original xbox and initial 360 losses(The red ring thing and others) are all recouped. Not sure if they made enough to get out of that hole. PS4 will need a health profit to dig itself out of the ps3 hole but the ps3 has already whittled it down. It's not impossible for either to claw out of that hole.
Remember revenue is not profit necessarily. Like GTAV making a billion but I bet only 500-600 million went to them in profit.

 

[TouchMyBox]

Holy crap. So if they were to stop harassing Android OEMs they'd be up Shits Creek?

Fixed that for you.

 

[erawsd]

My point is, if even Microsoft are losing money in this business, what the hell are Sony doing in it?

Sony made money on PS1 and PS2, PS3 has been the big misstep.

The problem with the Playstation 3 is that it was carrying the weight of the entire company. Cell was suppose to take the world by storm and be implemented in a very wide range of consumer electronics and appliances -- Sony really wanted it to be what the ARM processor has become. Blu Ray never caught on and the physical media market is shrinking fast thanks to streaming services.

With the PS4 Sony is making an attempt to return to form. They're losing money on each sale, but its the cheapest console they've ever produced and should quickly turn to profit.

 

[TheRagnCajun]

Damn. Is this all RROD then? I heard when MS decided to extend the warranty it would cost them 2 Billion overall. Maybe that was an underestimate.

 

[Alpende]

That's insane.

 

[Alx]

Read the canceled Rare projects thread. Rare has worked on a ton of software, plenty that's even gotten to a playable point, that was then canceled.

None of those projects were kinect games, though. So saying that Rare spent money to produce kinect flops is factually wrong, if anything their kinect game is the only thing that made them earn money.

 

[Sir_Crocodile]

That has nothing to do with it. Smh. It's patents covered under the Nortel patent portfolio that the consortium bought out. It covers 3G and wireless communication. Pretty sure they are also licensed out under FRAND as essential. Last I read estimates (which is likely what te analyst is going by) either MS or the consortium (don't remember which) sees about $10 per android device sold.

Microsoft:"...when Nortel sold their stock to the consortium, that the consortium was ME!"

Google:*Shock* *Ear Tug*

 

[popeutlal]

Random musings from an analyst...so obviously bullshit.

 

[BrokenIcarus]

Android phones are designed to largely be plug and play with PCs. Microsoft owns many, many patents related to the dominant PC operating system and filesystem. PC interoperability is critical to android, they can't drop it.

Android likely isn't paying much to apple if anything at all. no one cares about MacOS.

Ah, that makes a lot more sence now. I was thinking more about iPhone patents than Mac patents, but Desktop windows actually seems legit.

 

[Mandoric]

None of those projects were kinect games, though. So saying that Rare spent money to produce kinect flops is factually wrong, if anything their kinect game is the only thing that made them earn money.

Rare didn't necessarily deliberately burn money -to- produce Kinect games at a loss, but they certainly burned money and turned a loss while producing Kinect games.

If we can agree that titles like RE6 and FF13 were flops at 5 million sold, surely the pattern holds for Rare too?

 

[tranciful]

Some of you guys sound like comments on foxnews.com -- instead of looking at any numbers or trying to find info to contradict it, you just yell "liar!" because it doesn't go along with your preconceived notions.

 

[zebwinz]

Sony are losing money right now, looking at the financials. There'll be profit in it eventually, but it'll be razer thin at best most likely. This is fine for Sony, a company that's desperate enough to soak up revenue anywhere due to their other failing divisions, but it's not ideal for Microsoft, whose money may be better spent in more lucrative markets.

True, Sony's only profitable division is its insurance division in Asia.

 

[funkystudent]

Always thought there was some creative moving of numbers for MS earning reports.

I forget when it was but it was a few years ago and suddenly the entertainment division went from a loss making thing to a hugely profitable thing in like 1 Quarter after they did some merging of divisions on the report sheets.

Its been imposable to tell how profitable xbox is actually doing for them for years.

I am sure this kind of thing is common for these companies though.

 

[skc]

Sony made money on PS1 and PS2, PS3 has been the big misstep.

The problem with the Playstation 3 is that it was carrying the weight of the entire company. Cell was suppose to take the world by storm and be implemented in a very wide range of consumer electronics and appliances -- Sony really wanted it to be what the ARM processor has become. Blu Ray never caught on and the physical media market is shrinking fast thanks to streaming services.

With the PS4 Sony is making an attempt to return to form. They're losing money on each sale, but its the cheapest console they've ever produced and should quickly turn to profit.

Ah hah. So this is where critical thinking come into play. If you believe that Sony selling the PS4 at a loss will quickly lead to a profit, then why are we so quick to believe that Microsoft is racking up huge losses on the 360?

Doesn't make sense.

Either these things make money or they don't. They all have the exact same business model give or take a service or two.

 

[Curufinwe]

Random musings from an analyst...so obviously bullshit.

http://www.businessinsider.com/nomura-note-on-the-future-of-microsoft-2013-11

Nomura analyst Rick Sherlund.

...isn't your average Microsoft analyst. Sherlund was at Goldman when it took Microsoft public, and he acted as a point person. In 2011, Dealbook described him as a "long-time friend" of Bill Gates.

Inside Microsoft, Sherlund is well-respected as one of the few analysts that really understands the company.

 

[Effect]

Gaming as a whole has been extremely costly for Microsoft.They've tried to hide it but you can only move the numbers around so much. All to push the brand and to get into people's living rooms. It makes sense for why some investors want to cut it loose. I would like to know if Microsoft has gained what they wanted as a result of spending so much money.

 

[MutonCommander]

Guys, this isn't some Pachter-tier analyst whose opinion you can simply brush off. This guy knows his stuff and he has intimate knowledge on all things Microsoft. I believe him.

 

[McLovin]

Their online is paid and bombarded with ads, peripherals grossly overpriced, multiplatform games consistently sell better, they charge ridiculous fees for updating games, and they are still losing money? Wtf?

 

[Bungie]

I don't believe it.

 

[Woo-Fu]

I can believe it. When Microsoft decides they want something they spare no expense in their attempts to get it. Also meshes nicely with reports about investors wanting Microsoft to ditch the division.

The way things are looking for the next gen they might get their wish.

 

[McLovin]

Ah hah. So this is where critical thinking come into play. If you believe that Sony selling the PS4 at a loss will quickly lead to a profit, then why are we so quick to believe that Microsoft is racking up huge losses on the 360?

Doesn't make sense.

Either these things make money or they don't. They all have the exact same business model give or take a service or two.

Rrod cost them a shit ton of money. So they aren't exactly the same.

 

[linkboy]

Google was asked to join the group, they didn't.

If Google did, then they would be part of a group suing Android phone makers (Samsung, HTC, etc).

 

[OCDBuzz]

This article never specifically calls the Xbox group a loser, just the division that houses it. It also doesn't even mention the Surface which falls under Entertainment and Devices.

This is basically old news except for the Android royalties part.

 

[Nightengale]

Guys, this isn't some Pachter-tier analyst whose opinion you can simply brush off. This guy knows his stuff and he has intimate knowledge on all things Microsoft. I believe him.

It's funny to see people dismissing a reputable analyst from one of the top securities firm in the world, without even trying to offer a counter-perspective/argument. Not even from MS's financial reports.

 

[Odrion]

I wouldn't mind a console future where Microsoft left. Okay, "Competition is good!" You say. Well, that's a pretty big blanket statement. And I don't know if Microsoft's way of competing is healthy for our hobby.

Maybe Microsoft bowing out would cause Nintendo to take back the "Alternative power console" position. Or hey! Sony vs Nintendo vs Valve. Could always happen.

 

[Cornbread78]

Honest question here...

About how much money does MS spend each year with all their exclusivity deals with
3rd parties?

 

[szaromir]

Rare didn't necessarily deliberately burn money -to- produce Kinect games at a loss, but they certainly burned money and turned a loss while producing Kinect games.

Balance sheets pls.