Microsoft Loses $2 Billion Per Year On Xbox, Analyst Says

[theuprising]

So basically this only confirms that Microsoft (along with Sony if we take into account news from the past few months) are in bad financial shape. Wonder what would be the end of the coming generation of consoles? A contest between valve and nintendo is inevitable?

Oh no microsoft is not in bad financial state, while Sony is in TERRIBLE financial state. Sony's PS division could drown the entire company, while the XB division is another one of MS' many unprofitable divisions which doesn't even flinch MS b/c they are swimming in Money!

Though there are voices that say they want to cut out the XB division w/in MS, I wouldn't pay too much attention to them, the XB division is currently the only way MS can reach consumers in the living room, something important to a company seeking to diversify and jumping off the sinking ship that is PC software.

Makes sense, I imagine most of their income comes from selling OS licenses to companies. Still MS just seems to sink money in unprofitable ventures like phones, tablets and now consoles as well.

Like others have stated in this thread, the 360 was profitable for MS over its life cycle, this guy is bunk and accounting for all the money MS is using marketing and creating the XB1 into his figures. The 360 just wasn't VERY profitable for MS compared to their licencing revenue, hence the complaints from the business world and why this new console is designed to break even day 1 rather than sell at a loss like they usually do.

 

[Callate]

I have to say this analyst's numbers don't sync up with what I've heard elsewhere. It's hard- not impossible, but hard- to believe that a company like Microsoft would stick to a losing game for three generations.

 

[Use_Imagination_here]

I must be misunderstanding something fundamental here but if a product is LOSING MONEY then why do they keep selling it?

Excuse my naivety but that seems kind of, well, fucking stupid. I'd get it if it was for some promise of future gain but it's BILLIONS. How are they hoping to make that up?

 

[Roxas1359]

I've always thought that the only company operating under a business model that looks and sound really profitable to me is Nintendo. Hate it all you want but the big N cashes in on the hardware, the games and the licensing on consoles and handhelds. M$ and $ony just seem to be on a battle of attrition to see how long it takes for them to keep pushing for harder to make and more expensive hardware every generation until they are the only ones left on the market.

Well for Sony they made huge profits with the PS1 and the PS2 just fine, it's just that the blunders they made with the PS3, combined with other things, kinda made it go away. Although they've made profits on the PS3 now, but the Vita isn't helping as much.

 

[VoidWanderer]

While I am not a big XBox fan, I would like to point out that analysts are like knee-jerk parents. They see things that don't make sense to them, and come up with some extravagant, complicated reason which may end up as bullshit.

If anything, Microsoft loses money on every other generation of Windows.

 

[Something Amyss]

Oh right, because investors line up down the street to buy a business losing $2billion per year.

I don't know, there's got to be a few rich guys with more money than sense. Maybe Donald Trump?

 

[Evil Smurf]

I have to say this analyst's numbers don't sync up with what I've heard elsewhere. It's hard- not impossible, but hard- to believe that a company like Microsoft would stick to a losing game for three generations.

I must be misunderstanding something fundamental here but if a product is LOSING MONEY then why do they keep selling it?

Excuse my naivety but that seems kind of, well, fucking stupid. I'd get it if it was for some promise of future gain but it's BILLIONS. How are they hoping to make that up?

Well the original plan was that xbox would be the next big thing at microsoft that would dwarf the enterprise division.

That didn't happen. The xbox was a bust.

Then apple came along, then they made the xbox 360 into a "safe bunker" away from apple. A place they couldn't touch.

Steve jobs died, and the money so far has been nothing.

Now the only reason anyone says to keep xbox is to try to survive in a "post PC" world and to stay relevant in consumer's eyes.

The problem with this strategy is that if it makes no money, there is no future. You can't restructure your entire company on a dying brand and say "its not PC so its ok." People say apple might take over the living room with a console, but the fact is apple won't even touch gaming with a ten foot pole because if Sony and Microsoft lost billions on consoles, they sure as hell won't even bother. Not to mention Steve Jobs thought gaming was a fad that would die, and hated it ever since the pippin.

So the living room is safe from apple, because there is no money in it to justify the huge costs of entry. The only reason the xbox is kept going is because Ballmer and friends didn't want to admit they were wrong and that their over reaction cost microsoft billions.

So basically, Ballmer was the only reason it was kept going. It was his pet project to be "hip and cool" that ended up going nowhere. Like all of his plans.

The xbox One has a 500$ cost because its not on a loss leader method. It was a cheapo console, with no actual subsidies to the consumer like the PS4's 400$ price, to try to prove xbox can make money. The xbox one is a last ditch effort to try to prove to the board that it isn't dead and that it can bring profit.

If the PS4 wins this generation, and early reports says it will, the xbox will be axed soon.

You know, it would be nice to see some sources man, otherwise I assume it's just speculation and take what you say with a grain of salt. That said, if Microsoft gets out of the picture and starts making PC games again, I'd be happy.

 

[Dragonbums]

That said, if Microsoft gets out of the picture and starts making PC games again, I'd be happy.

Let's hope it's not that GFWL shit.

 

[Evil Smurf]

That said, if Microsoft gets out of the picture and starts making PC games again, I'd be happy.

Let's hope it's not that GFWL shit.

They've shut it down I'm so happy now, I can play my batman games

 

[Dragonbums]

That said, if Microsoft gets out of the picture and starts making PC games again, I'd be happy.

Let's hope it's not that GFWL shit.

They've shut it down I'm so happy now, I can play my batman games

Does that include games like Viva Pinata? Because it's not like I couldn't play the game, but if it didn't connect to GFWL I couldn't access my save file.

 

[Evil Smurf]

That said, if Microsoft gets out of the picture and starts making PC games again, I'd be happy.

Let's hope it's not that GFWL shit.

They've shut it down I'm so happy now, I can play my batman games

Does that include games like Viva Pinata? Because it's not like I couldn't play the game, but if it didn't connect to GFWL I couldn't access my save file.

As Butch from Pulp Fiction said: "Zed's dead baby, Zed's dead." It's gone, on everything