Microsoft Joined Console Race to "Stop Sony", Says Former Exec

[BrotherRool]

And what a company like MICROSOFT considers a small profit margin

"Shit, we only got a billion in profit off xbox royalties."
"Fuck man, why do we even bother with those gamer plebes?"

Know what I mean? heh

Then again, I havent taken any serious look at MS's books so I have no idea how their profit margins look.

So true =D Oh no we only have a third of the console marketshare over the entire world, what shall we do

 

[AzrealMaximillion]

A distant second with the Xbox and now 3rd place with the 360 in this gen. So much for "stopping" anything.

 

[jon_sf]

Then again, I havent taken any serious look at MS's books so I have no idea how their profit margins look.

http://www.businessinsider.com/chart-of-the-day-microsoft-income-by-segment-2012-10

In that chart, the light blue area near the bottom is the Entertainment division, which includes Xbox. Some months it's slightly positive, other months it's in the red. It's pretty tiny compared to the other areas of the company.

In Q4 2012 their revenue was $73 billion ($1.78B from entertainment & devices), and based on that they made a total of $21.6B of income ($263M from entertainment & devices.) So it's approximately 1% of their profit. (source: http://betanews.com/2012/07/19/microsoft-q4-2012-by-the-numbers-6-2b-charge-saps-record-quarter)

I think one reason they keep investing in the Xbox is they consider it their best bet for having a presence in a room of your house other than your study. PC sales are declining, and people are using a greater variety of devices. Having a PC/Xbox/Surface/Windows Phone ecosystem all working together is an attractive idea, in theory. In practice, I don't see much excitement for their smartphones or tablets.

 

[Steve the Pocket]

Sounds about right. Microsoft have always seemed to me like a company with no real vision or long-term goals, just jealousy for every other company in the electronics and computer industries. So they try to play me-to with everyone. From DOS (CP/M, UNIX) to Windows (Macintosh) to the Xbox (Sony) to Zune (iPod) to Bing (Google), it seems the only thing they've ever been capable of is latching on to someone else's market for its own sake. Granted, they usually do it pretty darn well (Windows, in particular), but they're still only doing it because someone else thought of it first. That it sometimes isn't even about the money doesn't really surprise me at all.

 

[TheLastFeeder]

The Grimm Reaper of Software Companies has spoken!!!

 

[weirdee]

i'm tempted to go back in time and screw everybody over by stopping the playstation from ever existing

 

[FalloutJack]

Ironically Sony broke into the gaming market out of spite because Nintendo had them make a CD what not for the nes.
Then Nintendo screwed their pooch by canceling the project.
If I'm remembering correctly

Trueness. I had originally heard that during the collaboration, Sony ran all the way to the bank behind Nintendo's back, but a friend corrected me by pointing out that Nintendo lost faith and has probably been kicking themselves ever since.

Incidentally, I deny any and all success the X-Box can be attributed. Not because of any quality of the thing. Oh no, it's quite good...as the Playstation's American counterpart. It's a copy of the work pioneered elsewhere. And while that is a normal business practice in a competitive market...X-Box owes any kudos it ever had to Sony.

 

[KiKiweaky]

Not a big money making machine?

24+ million sales of the original and triple that for the Xbox 360, bullshit hahahahaha

And yet the Xbox decision of Microsoft consistently puts in loss reports.

Profit margin, not turnover, is what ultimately matters. It's a lesson a surprisingly large number of American businesses fail to learn - look at GM.

If they cant make a decent profit margin then they should gtfo and leave the industry to someone else who knows what they are doing