jimbobsmells
Member
Hmm not sure what you're trying to say here. You think that they only look at their results at the macro level? Even those 25 cents will need to accounted for. Someone will have to answer to the CFO why their numbers are down.
-
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.
Microsoft FY2015 Q3: 1.6M 360+XBO Shipped
- Thread starter ZhugeEX
- Start date
Hmm not sure what you're trying to say here. You think that they only look at their results at the macro level? Even those 25 cents will need to accounted for. Someone will have to answer to the CFO why their numbers are down.
Hans.Gruber
Banned
There are many non monetary benefits to keeping a console alive, as long as it doesn't get to expensive.
jimbobsmells
Member
Ok yes I agree on that. It's a brand problem, not a PR one though.
Chobel
Member
Wat? You actually think they made more profits than last year?
NoPiece
Member
Right but there are non-monetary costs to supporting a console division. There may be potential upside if the best and brightest minds in the Xbox division were improving the Windows gaming experience, improving their Smartphone offerings, and improving Surface. You have to invest your money and your human resources into what you think will support the goals of the company. I just think the living room was last decades battle.
GHG
Gold Member
You do know that brands can transition to mean different things (while offering different products) and still be successful right?
Ask someone what Apple stands for 20 years ago and you would get a very different answer to the one you get today.
Microsoft will look to leverage the brand and transition it into something that they feel will enable them to reach even more users and become more profitable. It's only logical. The biggest challenge is how not to alienate the current user base during that transition, and they already found that out the hard way during the aftermath of the xbox one launch event.
Oh and since you asked:
http://channel9.msdn.com/Events/GDC/GDC-2015/The-Future-of-Gaming-Across-the-Microsoft-Ecosystem
http://www.eurogamer.net/articles/2015-03-13-microsofts-new-vision-for-the-xbox-one
Not going to happen. The ps4 is not get to 50 million by the end of the year. More like 32-35 million.
Are you dumb on purpose or something? In the link you provided 170m profit is NOT made by Xbox, it's the profit coming from Xbox + Surface + Windows Phone divisions combined: and if they merged the numbers together, you know they did it for a reason. Just like they are giving out "Xbox family" shipped numbers for quite some time now, they have to hide something, and perhaps every quarter at least one of those three divisions is bleeding money.
Hans.Gruber
Banned
Hans.Gruber
Banned
These are the closest real numbers out there and illustrates perfectly how unimportant xbox is the the companies bottom line.
BrokenIcarus
Member
It's a weird assumption though, considering them dropping the price hard, which in turn means smaller margins and therefore less profit.
I'd estimate the profit is even more down than 24% from last year, but as you said, we have no way to find out.
GHG
Gold Member
But it does indicate that there is a decline in your products demand in the market. But yet you are the one who accused me of spinning?
What has that got to do with anything in the context of this discussion?
Hans.Gruber
Banned
Really late in replying to this I know but essentially yes. Hopefully the next consoles will remain x86 but rather than DDR4 or DDR5 they will likely use HBM, that will be the high bandwidth memory of choice by then. I do not think MS will need ESRAM or similar for backwards compatibility, it is possible they could portion off a segment of ram to act as ESRAM when playing Xbox One titles if necesary.
NoPiece
Member
Microsoft breaks out gross margin for the Computing and Gaming Hardware division. That's the closest you'll get to profit. It dropped from $460m in Q2 to $414m in Q3.
Swass
Member
In retail there is something called the power of 9's, having the PS4 drop to $349.99 will have an impact, but $299.99 would be huge. You remove the perception of spending $300 even though it is only priced 0.01 cent lower where the $349.99 number doesn't do a whole lot to change that stigma. Plus Sony has a history of knocking $100 off on their first drop. I believe it's going to be $299.99 this holiday.
jimbobsmells
Member
But it's much, much harder to lower your expense challenges. They would have to anticipate the loss in revenue.
GHG
Gold Member
To be honest I could have said 7 years and the answer would remain the same.
http://www.comscore.com/Insights/Blog/5-Years-Later-A-Look-Back-at-the-Rise-of-the-iPhone
If the xbox one is the last dedicated console but they replace it with a different "device" that takes the market by storm how would that be a bad thing for them? Especially considering, as you put it, the xbox division is unimportant to the company's bottom line.
That is the exact reason why they might try to take it into a slightly different direction, especially considering how powerful the brand is at the moment.
michaelius
Banned
I'm glad surface is improving. They only need to fix one error in skus they have - entry level i3 pro needs to have more than 64 of ssd space.
Hesemonni
Banned
Wait, where exactly?
Swass
Member
Did Unity really help Microsoft? That game released a mess and to a storm of bad PR. If anything I think Sony has got to be glad to not have been associated with it.
Hans.Gruber
Banned
Yes, a thin-client device is the future. But online infrastucture in homes isn't ready for it (yet). The PS4 success indicates that people at the moment want an old-school console where you can pop discs in. Xbox's brand isn't strong enough to dictate major changes in how people use their devices. A "back to the 360 roots" approach with a low pricepoint and barebones featues would be a much better bet IMO.
NoPiece
Member
It's easy to forget how much of the 360 success was driven by the very inexpensive Arcade sku. They could do worse than to try an even more stripped down, super cheap Xbox One.
Coulomb_Barrier
Member
You have to be crazy to think the Xbox One is seriously underperforming looking at the bigger picture. And I'm not talking about the MS tablets, Windows Phone, Xbox 360, or whatever else MS hides the Xbone's figures behind.
Conventional wisdom dictates that having an astronomical marketing budget for a product that you only ship out 1.2-1.4m units in an entire quarter is terrible. Conventional wisdom also dictates that you are not going to be making much money on a console that is being sold for less than $350 with games when we know its BoM is close to that.
Beautiful Ninja
Member
How much can you actually strip though. The hard drive is now mandatory since everything installs to the disk drive. Developers have presumed that the HDD will be present for all games and removing that and having to offer a fallback to disc streaming is highly unlikely, if not even technologically feasible with how large games are now compared to the relative speed of a disc read.
You probably can't cut the disc drive either, most games are still sold at retail on top of its use for media functionality. I can't imagine there is that much of a market for an XB1 that is purely reliant on networking for its functionality.
Kinect's already been cut.
There's not much else to cut outside of that stuff.
Interesting to see people calling these numbers bad. They're more positive than I thought (admittedly I'm pretty pessimistic on Xbone, think it will end more closely to OG xbox than 360).
Assuming 360 sales are dropping off, especially because it's shipping and I can't see many shops wanting new shipments, what's a realistic Xbone shipping number? 1.3 M? That's 430k per month. From NPD we know that they're selling about 250k per month in the US, so that means that the rest of the world is almost equal to the US, or perhaps equal given that there's likely some channel stuffing (few deals in the EU).
Hey that's a lot better than completely dead.
Assuming 360 sales are dropping off, especially because it's shipping and I can't see many shops wanting new shipments, what's a realistic Xbone shipping number? 1.3 M? That's 430k per month. From NPD we know that they're selling about 250k per month in the US, so that means that the rest of the world is almost equal to the US, or perhaps equal given that there's likely some channel stuffing (few deals in the EU).
Hey that's a lot better than completely dead.
Hans.Gruber
Banned
I really don't get how MS thought that two tiered system was bad. Imagine a 499 X1 as we know it, along with a 299-349 X1 arcade (no kinect, no TV pass thru and only 250 GB) in 2013.
Would have been a different story IMO. The "how can I play FIFA and CoD as cheap as possible?" market was totally irrelevant to MS at that time I guess.
wapplew
Member
As long as Xbox keep getting third party support, it will be fine.
Maintaining the gap between market leader by only 2:1 is some achievement, and I don't see the gap get wider in the future.
I'm confused by the numbers, in the last 9 months (this Fiscal year) MS have sold 10.7 Xbox consoles (ONE+360), during the previous 9 months (previous Fiscal year) they have sold 10.6 Xbox consoles, so overall they have sold in the last 18 months 21.36 Xbox consoles, out of that number you think they only shipped 13M Xb1? Doesn't make much sense that the 360 sold so much.
What am I missing?
What am I missing?
MS makes money on licenses, not on consoles, and they make more money on licensing if it's sold through their digital store than in bricks and mortar shops. Small HDDs hurt their market, maybe more than the smaller pricepoint of the console. I think Nintendo is hurting from their decision too.
LiquidSolid
Member
I think you're trying to say that you think the ratio will stay the same. Because there's no chance whatsoever the gap is going to stay the same, it's going to continue to get wider and wider.
Beautiful Ninja
Member
Places like South America and China that still overwhelmingly prefer Xbox 360 to Xbox One. New gen consoles and their games are still extremely expensive for territories like those.
So you are telling me that the 360 sold in the last 18 months 7 M consoles? That's insane, Is there any other late gen console that sold so many? I think even PS2 didn't sell like this in its late years.
Those are not actual numbers, this is a third party estimate. And considering that we had something like this:
http://www.destructoid.com/analyst-microsoft-losing-2-billion-on-xbox-annually-265273.phtml
2 years ago, I wouldn't take this serious at all. MS doesn't want the public to know how much profit Xbox is making, you can guess for yourself why that is.
Katana_Strikes
Member
Flat or potentially down on last year despite many more markets (yes even though all of them are small for MS) at a much cheaper price and also cheaper than the competition in the U.S./UK (it's 2 strongest markets) and sales haven't improved but revenue has fallen, is hardly grounds for positive. If it's doing 250k in the U.S. and adding in the Canada and UK, then that's going to be a big chunk of the sales, leaving 40 other countries where it's shipping only 100-150k? a month. Which is poor.
I don't think anyone's calling it dead, but in comparison to the competition and with all of the above factors in place, it should be doing better.
Hans.Gruber
Banned
So getting ppl on your system is pretty important (if I interpret your thoughts correctly).
The small HDD is a non issue on X1 though, since you can expand via cheap external drives (that feature would have to be properly communicated). 499 was the biggest mistake IMO.
Hans.Gruber
Banned
Trefis accumulates numbers from companies earnings reports. Thrid party estimates are what you are linking to. A 2013 estimate.
And yes I know why they are hiding the X1 numbers, they don't want to point out that they are losing this gen badly to PS4. Nobody is disputing that.
wapplew
Member
Since we don't know the actual sold through numbers of Xbox one, we can't really say it's 2:1.
We know PS4 sold 20.2m, unless Xbox one only sold 10.1m, its not actually 2:1 right? It will be lower than that.
It really depends on the chipset shrink, AMD have already designed the Xbox One chipset shrink, now can they manufacture it on mass this year and will MS make a slim console to make bigger profit. As Sony is so similar and an even simpler design they won't be far behind, maybe even first. I don't think you can compare what happened in previous generations, these consoles are a lot more straightforward and cost effective quicker. About two years on market would be very quick but savings to be made and for Xbox, a relaunch of sorts would be silly to resist.
TechMaster360
Banned
Interesting figures that most people choose to ignore, reading some of the comments on here you would think MS doomed and going to have to shut down Xbox.
boredandlazy
Member
And reading some of the other ones you'd think Microsoft should be all sunshine and rainbows.
It's easy to paint any picture by being selective with the comments you choose.
Well how about you try and find the operating income of unique segments in MS's earnings reports?
Especially from earnings reports that haven't happened yet.
LiquidSolid
Member
If they have sold over 10 million, it won't be by much, so I think it's close enough that it doesn't really matter.
Hans.Gruber
Banned
You can download these spreadsheets from MS's investors site.
justsomeguy
Member
Trust me, there will be a scorecard which is red if a division of any size misses its targets. That red will roll upwards and they will be held accountable for it.
Swass
Member
Crazy to think that last years Q3 lead to the removal of Kinect, and this is 25% below that.. Going to be very interesting to see if/how Microsoft reacts to this news.
Then link 'em, I am on their IR page and I can sure as hell not find any spreadsheets that give operating income on a segment level.
Also you seem to completely ignore that that trefis page you linked starts at 2015 (which is not yet over and their last update was at the end of january) and goes up to 2021, those are estimates.
1st Course
Member
No such thing
https://view.officeapps.live.com/op...wnloads/FY15/Q3/FinancialStatementFY15Q3.xlsx
Microsoft stopped reporting operating income on divisional level years ago. They just report revenue + gross margin now.
justsomeguy
Member
Pretty astute analysis IMO. IMO it's even bigger than that: it's about the consumer business as a whole.
The really difficult question is "How does Microsoft recover the cool factor with consumers?". I don't know the split of revenue between consumer and corporate, but it's utterly certain that consumer behaviour influences corporate behaviour too - just look at customers who are giving their employees iPads for task-related work, for example, or iPhones for their work phones. It's in part because the people making those purchasing decisions have one at home so they just know the technology so the CIO or CTO will come in and say "I want to give everyone iPads to do job X".
Xbox and gaming is part of the consumer presence and, with the 360, was certainly "cool". MS desperately needs to gain that cool factor back and gaming is one way to do that.
Steam did a brilliant job in taking the desktop gaming market, so Xbox is the vanguard in this area for Microsoft. So I think an Xbox Console is still important for this generation at least. What does that look like next gen or the gen after? Who knows - not me - maybe "console" goes away and you're left with streaming-only, or xbox-branded PCs (bearing in mind the universal app experience on windows 10).
Interesting times.
Oh... and in terms of cool factor, HoloLens will be another way for that to come back - but I can't see that being focussed on gaming, even though that's a great way to demonstrate the technology and a great use-case for it. Certainly looking forward to whatever they reveal at //Build next week, expecting a lot of HoloLens content.