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Was anyone else dumbfounded by the idea of selling the Xbox business? That's been one of the only bright points in MSFT's consumer products for the past decade.
by taylorwc 13y ago
Was anyone else dumbfounded by the idea of selling the Xbox business? That's been one of the only bright points in MSFT's consumer products for the past decade.
- dragontamer 13y agoIt also hasn't made Microsoft any money. The majority of the money in the XBox business has been from Android Patents. http://www.businessinsider.com/microsoft-earns-2-billion-per-year-from-android-patent-royalties-2013-11 http://www.businessinsider.com/microsoft-earns-2-billion-per... From a business standpoint, the XBox is one of the worst performers in the entire Microsoft company.
- kunai 13y agoThat statement has never been proven. It's something an analyst spewed out.
- dragontamer 13y agohttp://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years http://www.neowin.net/news/report-microsofts-xbox-division-h... Dude, its a known fact that the XBox division is a dog from an investment perspective.
- CaveTech 13y agoUntil Xbox One, at least.
- dragontamer 13y agohttp://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years http://www.neowin.net/news/report-microsofts-xbox-division-h... Nope. The only reason XBox360 made any money was because of XBox Live subscriptions and Ad Revenue. Neither selling consoles, nor games have made any money for Microsoft.
- CaveTech 13y agoWasn't referring to their earnings at all. XBox is one of the few MSOFT products that has a positive brand image overall.
- taylorwc 13y agoThat's exactly what I was thinking. Even if it was barely breakeven, I'd think that the value of having a consumer product with recurring revenue and [generally] positive customer experience is of greater value than its cash flows.
- dragontamer 13y agoIts easy to have a positive brand image if you're bleeding money. See Youtube, before the advertizements. The real trick is capturing a positive brand image while still making the company money. The XBox One tried to refocus itself as a more profit-oriented machine. Why is it "always online" ??? Because XBox Live subscriptions and Ad-revenue were the #1 source of revenue for XBox. Why is the XBox One weaker than the PS4?? Because XBox never made money off of games. In fact, Microsoft lost money as far as games themselves are concerned. Microsoft made a decision: they decided to attempt to make the next generation XBox One profitable at all. Those decisions have cost the XBox One its reputation... but were probably necessary so that the XBox division actually could make money. When you have a part of your company that is continuously bleeding money, with an inability to actually monetize your brand... you need to spin it off. Its basic business strategy. The other possibility is if they could find a way for XBox One to make money while still keeping a positive brand image. At the end of the day, Microsoft needs to make money, but the XBox isn't doing that for them.
- fidotron 13y agoNot when looked at from a return on investment perspective. The profits, when they've existed, are dangerously close to being totally eclipsed by the truly massive occasional losses/write-offs. MS have a problem in that they don't really have a successful consumer products division. One way around that is to stop worrying about it, which seems to be an increasingly popular point of view.
- panabee 13y agoCan someone provide some analysis and numbers to support this? Creating a gaming hardware console is naturally capital intensive, but has the PlayStation always generated losses for Sony? How about the Wii for Nintendo? What is the breakdown on the Xbox P/L statement? (I realize this doesn't exist in the wild, but someone knowledgeable feel free to hazard a guess, case-study style ...)