Those MS figures are for the entertainment and devices division, rather than just the Xbox. We have no idea how much the Xbox brand has lost or made over the years, as its profits have been obscured and its losses exaggerated by products like the Zune, Kin, Windows phone etc. As you say though the division has been profitable since 2007 even with the losses from these products, which suggests the Xbox has been making very healthy profits in recent years. Anyway past losses are irrelevant to the company, they have been long since absorbed into the share price, investors only care about the future outlook.
-
Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.
When do you think Microsoft will react to potentially losing next gen battle?
- Thread starter Tak3n
- Start date
Even if Microsoft made profits with the Xbox brand since 2008, it's very miniscule. 2011 was their best year in that with $1.2 Billion (just about enough to wipe out the $1 Billion from the RROD scandal).
Another graph about that here.
Louis Cyphre
Banned
I guess that explains why Microsoft may be pulling out of gaming. Lol. Now show the graph of the same time frame for Sony and it's gaming division.
Like the above person said, previous years of losses have already been absorbed. It's not like Microsoft needs to sell assets to keep afloat or anything.
Warm Machine
Member
Who is it with then? I've been trying to figure out this whole "living room" thing ever since it was said about the original Xbox. Who are they trying to beat to the living room?
Who's winning the living room now? I'd guess it's the cable providers and as that wains it will be Netflix, Amazon, and the likes. I don't see how Microsoft competes there as they allow Xfinity, Netflix, Amazon Instant on their device rendering the Xbox a really expensive Roku.
What's their end game here?
Ur_momshere
Neo Member
All companies are in business only for the profit.
I think I've already talked about this, originally it was to stop Sony, right now it's likely their best way to control the TV, MS would be happy with you watching lovefilm/netflix/Xfinity, as long as you have the XB1 overlay on it, It's a way to make other companies products viewed through a Microsoft product, this allows for great advertising/marketing potential and allows MS to sell an aggregation service to the consumer where MS provide the portal you view these services on.
At the moment they're competing with a hypothetical Android/iOS viewing box.
EDIT: I don't know who is winning the living room in US, but in UK I'd say Sky are winning it, a lot of people are watching iPlayer/ITV player 4od/ Sky movies on demand (basically NowTV) as well as all of the Live channels through the Sky portal, The only thing thats really missing is Netflix, which is countered by Sky's own on demand service, which in the UK, is definitely comparable to Netflix.
Do you actually think this? They aren't betting their entire platform on one game that is being released less than 6 months from launch. I think they are in it for at least this generation and will do what they need to for the Xbox One to become profitable. They aren't pulling the plug anytime soon with the investment they have made in developing and producing the console.
lastflowers
Banned
Despite the rumors and random comments about xbox being a drag, Microsoft isn't going to get rid of the Xbox anytime soon. It's fantasy-thinking, and merely acts as FUD in this era of stupid fanboys slinging mud against one another.
If it were performing less than the WiiU for a couple of years, then perhaps I could see a radical shift in thinking. As it stands now, the console is doing fine, if not PS4 numbers.
Like I said earlier, the profits that Microsoft made with the Xbox are miniscule in comparison to Windows, Office, & even Servers as shown in that graph. Microsoft wants BIG, big profits, not tiny ones.
Plus I've already posted the other graph in which deals with Nintendo, Sony, & Microsoft in their gaming divisions earlier.
I wouldn't exactly call the Xbox's profits minuscule. For a while, the Xbox division was the only division at Microsoft experiencing significant growth quarter after a quarter, and around the time of the original Kinect's release, the entertainment division pulled in around a $1 billion of profit for the year. Mismanagement of the division is the issue, not the platform's potential for meaningful profit.
Graphics Horse
Member
CadetMahoney
Member
Warm Machine
Member
Look beyond their entertainment and devices and into their tool development like Visual Studio for the real income generated by their investment and focus on gaming. Yes, not all sales of VS result in game applications but a fair number of them do and it makes sense for MS to want those people using their tools to circle back and deliver content for their platforms. It is a big ecosystem and there are tendrils of it everywhere that get monetized.
You're confusing EAD with Xbox. We have no figures on how much Xbox has or hasn't made, which was the entire point of my post.
If the entire Xbox division truly made a profit & is in the black, then why did Microsoft refuse to post the numbers about it, etc.? What are they waiting for?
Right, I didn't mean to imply no one would fill the void. My main point was that we've seen the major shifts in competition in the generational transitions more so than during them. (But not only, of course.) I had to stop writing at some point!
Fantastic post.
Really good post - should be a mandatory read for anybody who brings up the "but competition is good" argument.
I'm bookmarking it.
Dragonborn
Member
Well if January is anything to go by, it is barely selling any units. It did what, 300k WW max? Compared to the PS4 that did roughly 1 million in the same timeframe.
Microsoft will make significant moves later this year for sure. They can't continue down the path they're on right now. Their console is $100 more expensive and word continues to spread about games running worse on Xbox compared to the PS4. The reception to Kinect hasn't outweighed the hardware disadvantage thus far. Also Xbox Live Gold isn't nearly as appealing as it used to be. PS+ offers more value despite being $10 cheaper (though I'm expecting a PS+ price increase this or next year). I expect Microsoft to add much more value to their service in response to PS+
Here's another thing that kind of annoys me about the 'well they're not doing as badly as the Wii U so they don't really have to do anything to 'win''.
Microsoft aren't (or shouldn't) be aiming to just 'make profit', as though getting one cent back than they put in is good enough. They want to make as much profit as possible, and they're not going to do that by merely swanning through the entire generation into a cozy but distant second place with a handful of mid-tier exclusives and worse value than PS4 across the board. They're literally pissing money away by doing that, and it sure as fuck is not going to make me (or, likely, most GAFfers) buy one.
They should be hungry RIGHT NOW, when they're only ~300-500K behind, not basically unconcerned because 'ehhhh, profit', and happy to ride mediocrity for seven years. They should be planning to blow everybody who's ever made a joke about how shit their product is out of the water (and not just be announcing a new fucking Forza game and acting like I should pretend that it's mana from the gods).
There's literally absolutely zero excuse for MS to not be working as hard as they possibly can get to get as many people as possible to buy their console.
Microsoft aren't (or shouldn't) be aiming to just 'make profit', as though getting one cent back than they put in is good enough. They want to make as much profit as possible, and they're not going to do that by merely swanning through the entire generation into a cozy but distant second place with a handful of mid-tier exclusives and worse value than PS4 across the board. They're literally pissing money away by doing that, and it sure as fuck is not going to make me (or, likely, most GAFfers) buy one.
They should be hungry RIGHT NOW, when they're only ~300-500K behind, not basically unconcerned because 'ehhhh, profit', and happy to ride mediocrity for seven years. They should be planning to blow everybody who's ever made a joke about how shit their product is out of the water (and not just be announcing a new fucking Forza game and acting like I should pretend that it's mana from the gods).
There's literally absolutely zero excuse for MS to not be working as hard as they possibly can get to get as many people as possible to buy their console.
It will outsell Infamous for March ('bone + 360 + PC) so that's how it will be trumpeted.
I don't remember them reporting financials publically by product for any division. Why would they make an exception for Xbox?
They'll react next fall just before going into holiday sales. Why worry until then when they are still snatching up those early adopter dollars. Thought if Titanfall doesn't do well it might spoke them enough to do something but nothing drastic enough to say remove the Kinect like I think we will see next fall.
What's the highest attach ratio we can expect for Titanfall Xbox One? 35-40%?
If 4 million Xbox Ones has been sold to customers by end of March then that's 1.6million copies.
We might see a million copies shifted on NPD simply because it's the biggest/most important exclusive on the platform for possibly the remainder of the year.
If 4 million Xbox Ones has been sold to customers by end of March then that's 1.6million copies.
We might see a million copies shifted on NPD simply because it's the biggest/most important exclusive on the platform for possibly the remainder of the year.
Has anyone posted this yet? http://www.washingtonpost.com/blogs...osofts-new-ceo-to-kill-xbox-bing-and-surface/
Good luck trying to hammer home that point. The concept of opportunity cost is lost on many people here (and elsewhere) - the idea that that money could be used in a more efficient manner simply doesn't click with them... "Microsoft has trillions why would they care about a few billions if they are making profit..."
McHuj
Member
It's dated Feb 5.
Note the date. What do you think?
Banjo-Kazooie
Member
An article from 15 days ago that says the same thing every article on this subject does?
KingJ2002
Member
Way too early for this thread.
I honestly expect a lower priced SKU to come in be e3 with Kinect downplayed a bit... which will turn things around.... i think it will be a neck and neck race long term.
It's logical, however his conclusion about Microsoft is wrong.
Microsoft is competing against the hypothetical (and I'd argue real) competition from Apple, Google, and Amazon for all the devices and services in your everyday life, which encompasses work and play. Azure, Office, Outlook.com, OneDrive, Windows, Xbox (games, music, video), Surface, Bing, IE, Windows Phone; Gmail, Google Play, Google Drive, Chrome, Google.com, Google Glass; iOS, iCloud, iTunes, iWork, Safari, iPhone, Apple TV. They're each developing wearable technologies.
Xbox is their entertainment arm, to fight Google Play and iTunes, and arguably to go up against their cloud offerings and digital store fronts with the inevitable shift to completely digital entertainment. It's why Microsoft has been branding the Xbox 360 and One as entertainment devices. It's why they consolidated their TV, movie, music, and games initiatives all under Xbox (think back to Mediacenter, Mediaroom, Zune, Kin, GFWL, etc.). It's why Xbox is not just in the living room, but also available on any Windows 8 device. It's why they now have studios focused on original TV programs (LA Studio), others focused on cross-device games (Lift London), and pretty much all their first party studios with job postings that include cross-device experience (go look up BlackTusk, Rare, Lionhead, and 343).
Anyone suggesting MS will ditch the Xbox division is suggesting they are going to give Apple and Google competitive advantages in the consumer market. You've either got tunnel vision and can't see the landscape each of those companies are fighting on, or you're just naive.
There was already a shift in the mobile market, from dedicated gaming devices to multi-purpose devices (smartphones and tablets). The same thing will happen in the living room, away from dedicated gaming consoles and cable boxes towards multi-purpose devices. It's a matter of when, not if.
That's exactly what I've been saying earlier.
Exactly. There seems to be many posters on here that thinks that Microsoft is invincible just because they have a lot of money. I just don't get that thinking, I really don't...
Dragonborn
Member
It used to be that way in the 90s and early 2000s where if Microsoft went into a market they would dominate it by pouring money into it and buying out or rolling over anyone who stood in their way.
We've seen a long string of failures out of Microsoft for the past decade (Zune, Vista, Windows Phone, OG Windows tablets, Surface RT, Kin...) The reason being when they cannot leverage their Windows monopoly all the money in the world can't do a damn to sell a product if people don't want it.
There's not much MS can do, with 360 they had a year lead, lower price and lots of de facto exclusives due to being first on the market. Sony fucked up PS3's launch so badly that it gave them even more momentum. This gen Sony executed a nearly perfect launch, $100 less than Xbox, more powerful, stronger worldwide brand and demand.
The only market they are in any way competitive in is NA and they're currently being outsold here 2:1. This is going to be a rough gen for the Xbox brand, even with a price drop and dropping Kinect the only market this is going to make any difference in is NA. Sony is going to run away with this gen, the writing is on the wall.
The only market they are in any way competitive in is NA and they're currently being outsold here 2:1. This is going to be a rough gen for the Xbox brand, even with a price drop and dropping Kinect the only market this is going to make any difference in is NA. Sony is going to run away with this gen, the writing is on the wall.
They could at least try.
SwiftDeath
Member
Look I'm fairly critical of XB1 and MS, maybe even more than I should be but this is just a silly statement. MS are rational people, perhaps a bit myopic in some of their ventures but they have intelligent individuals working for them and would have analysts already run the numbers to what the effects from TF might be XB1 sales-wise. Those estimates are going to be realistic. This sort of approach is likely why they decided to buy full exclusivity instead of timed to try and bolster sales over the time until TF 2 comes out.
In essence MS know that TF will not magically save the XB1 as no one game can.
Besides that even if TF bombed harder than DK:TF did in Japan, MS wouldn't pull the plug. One game a failed console does not make. MS have invested a lot of money into the XB1 and the Xbox brand so while people love to argue about whether sunk cost investments matter in the decisions made by corporations, execs are going to feel strongly about the brand and try everything they can to save it. It's MS after all and Xbox ain't the Zune.
A bit off topic but I really feel like the "next" xbox is going to be a service available on windows products but that's just me
Yeah they should at least try to do something. Right now $500 for an XB1 w/ Kinect ain't doing shit for them. It reminds me of Wii U's launch, ~3 million hardcore of the hardcore fans served at launch then demand drops off a cliff. They need to react quickly before all momentum is lost in NA.
Also, the network effect with these consoles is really really strong. People want to buy and play with friends that own the same machine. Letting Sony lead in this market by a large margin for too long will cause a lot of problems for them throughout the gen.
I disagree - I think smartphones and tablets are becoming the multi purpose devices of the living room so in my opinion there is no need for a separate living room "all in one entertainment" device besides the monitor/tv itself.
A tablet is perfectly capable of delivering all your multimedia needs if you choose so. The only field where it falls short is gaming and that's why I think dedicated gaming hw that's capable of delivering "high def" gaming "experiences" (I feel like a marketing person now ^^) still has it's place.
So the first conclusion I draw is that MS is trying to offer something for which there is no demand now and won't be there in the future.
And then look at MS's vision for their "all in one entertainment" device. They are banking on live TV for gods sake. They didn't include a DVR (congratulations on invalidating your "all in one" strategy) and the integration of external DVR is sub-par at best from what I gather. This extremely "coherent" strategy is rounded off by the extreme focus on US needs while ignoring the rest of the world (e.g. 60Hz vs 50Hz).
Therefore the second conclusion I draw is that even if my first assertion were to be wrong Microsoft is not doing a good job at realizing its own vision.
That leaves me with a final conclusion - Microsoft's strategy wasn't sound from the beginning and is failing because of that. I think they are delivering the vision they have for Xbox one 5-10 years late.
Yes, and they will decide to pull the plug.
So what you're saying is you want Microsoft to pull out of the console game so Sony is its own competition? Remember what happened the last time that happened?
We got the overpriced PS3 and a Cell processor.
If anything, Playstation gamers should want Microsoft to succeed enough to keep Sony in check.
The only way MS sells off the Xbox division is if they believe that it's not central to their long term strategy anymore. If they feel that their money and time is better spent elsewhere and this market is too much of a distraction for them.
The truth is, as an organization, MS doesn't give a shit about console gaming. The profits they can get from this market, even at the best of times, is a rounding error to them. The only reason they're in this market is to control the living room and everything you do on a TV. That's what drove the development of the XB1, with it's HDMI in and Kinect focus. If they don't achieve the kind of penetration they need to make this endeavor worth their efforts, I can see them selling the division. If the sales of XB1 is substantially less than Xbox 360 (my prediction is half), that will be a big failure for MS. For people arguing that it's about profit and not sales - it's the exact opposite, MS knows that this isn't a profitable venture, they're in it for household penetration and broadening the reach of their ecosystem (Skype, Onedrive, XBL, etc). That only works when you've got a shitton of consoles sold. They're going to contract HARD this gen and that's going to give investors more ammo to cut off the Xbox brand.
The truth is, as an organization, MS doesn't give a shit about console gaming. The profits they can get from this market, even at the best of times, is a rounding error to them. The only reason they're in this market is to control the living room and everything you do on a TV. That's what drove the development of the XB1, with it's HDMI in and Kinect focus. If they don't achieve the kind of penetration they need to make this endeavor worth their efforts, I can see them selling the division. If the sales of XB1 is substantially less than Xbox 360 (my prediction is half), that will be a big failure for MS. For people arguing that it's about profit and not sales - it's the exact opposite, MS knows that this isn't a profitable venture, they're in it for household penetration and broadening the reach of their ecosystem (Skype, Onedrive, XBL, etc). That only works when you've got a shitton of consoles sold. They're going to contract HARD this gen and that's going to give investors more ammo to cut off the Xbox brand.
Similar threads
- Poll