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[rexux-Corocotta]

Which is a dead giveaway it is not profitable.

MS does not report earnings for any of its divisions.

 

[DForce]

I’ve literally posted three examples coming from lawsuits / testimony data. The most damning one, which is constantly ignored is from the Epic vs Apple trial, where MS is listed to have made over 1B in gaming profit in 2019. This is straight from a trial document and has never been disproved ever.

Where is the evidence that MS gaming division is losing money?

The tweet thread explains what I'm talking about.

In short, Microsoft made 1.6b - 2.6b worth of profit via game sales and subscription services.

However, that doesn't take into account loss in hardware and other factors. The tweets I shared before explain how there are many answers as to how Microsoft calculates their operating costs which are likely excluded from their "profits."

Here is ZhugeEX explaining the profit from the Apple documents.


Looking at the steep discounts this holiday season due to poor video game sales, Microsoft is likely taking a massive loss just to increase the install base.

 

[T4keD0wN]

1. IDK, first party sony games seem profitable as hell despite not needing to be profitable by themselves at all.

2. You dont need your first party games to be profitable at all since its easily offset by 3rd party games costing 0$ to develop, but you can still collect 30% from them.

3. Dont look at sales as end all be all in a vacuum, Fortnite sold like zero copies, look how much it makes from mtx and microsoft games like forza, halo, gears or msfs have a lot of mtx.

 

[Victor Omega]

"Wait til e3" - Xbox fans in 2018

 

[Flutta]

aka they make actual games and not movies walking sims.

Hellblade ?

 

[Aguero9320]

The Microsoft fixation from Sony fans on here is borderline unhealthy… And I’m being kind there - it’s actually fucking nuts.

 

[Team Andromeda]

lol, so you’re full of shit. Gotcha.

Show where the XBox division made an overall loss. Otherwise, spare us the insults

 

[Team Andromeda]

What results?

Edit: If you are talking about financial reporting, Microsoft has never stated profitability for the Xbox division.

Well if want to try and be clever like that, show us factual data where MS has started operating losses for the XBox division not in the 360 or XBox era.
Rather than NeoGAF hearsay

 

[Chukhopops]

The tweet thread explains what I'm talking about.

In short, Microsoft made 1.6b - 2.6b worth of profit via game sales and subscription services.

However, that doesn't take into account loss in hardware and other factors. The tweets I shared before explain how there are many answers as to how Microsoft calculates their operating costs which are likely excluded from their "profits."

Here is ZhugeEX explaining the profit from the Apple documents.


Looking at the steep discounts this holiday season due to poor video game sales, Microsoft is likely taking a massive loss just to increase the install base.

Do you honestly think MS made a 2.2bn USD loss on hardware in 2019? Wouldn’t that be around 22M units sold in one year at a 100USD loss per unit at the tail end of the gen?

In the end the debate is between published data on one end and speculation tainted with bias on the other end.

The best argument has always been the FTC and CMA trials. Both agencies had access to MS financials and would easily be able to show it if MS was running a loss-leading strategy, absorbing Xbox losses with their other BUs. This argument would in turn be really strong in an antitrust / anticompetitive behavior case.

And yet… in none of the cases by none of the agencies was the loss-leading argument used. Ever. Almost as if it doesn’t apply.

 

[ManaByte]

I thought Sony had the rights? Google AI says they do.

Google AI is an idiot. Sony owns the film rights and TV rights for live action longer than 45 minutes. Disney owns everything else, including the video games. That’s why Spider-Man was in Midnight Suns, even on Xbox.

The merchandise rights, which Disney owns, is more valuable than the film rights as around 2018 they were making $1.8B a year on Spider-Man merch licensing a year, when Sony is lucky to get $1B on a movie every 4 years.

Like with Wolverine and X-Men, Sony is giving Disney a huge cut of the Spider-Man sales.

 

[Topher]

Well if want to try and be clever like that, show us factual data where MS has started operating losses for the XBox division not in the 360 or XBox era.
Rather than NeoGAF hearsay

Except you are the one engaging in "hearsay". You said Xbox has been profitable since Xbox One, but you don't have any proof. You point to "results", but Microsoft financial reports don't tell us Xbox division profitability so that doesn't work. If Xbox has been reporting profitability since Xbox One then then this wouldn't even be up for speculation. Folks would just bring up the income statement that would be that. But no one can do that, including you.

 

[MAX PAYMENT]

Ah yes. Another NEOGAF circle jerk about hating Microsoft. If only it were as exhausting for you all to participate as it is to read just a few posts of.

 

[Godot25]

Well
Microsoft's biggest games are usually tied to IP's they own (with exception to Indiana Jones and Blade). So they don't have to pay 100+ million dollars from profit because of license
Plenty of their popular games like Forza Horizon/Age of Empires (on PC) are developed in way shorter timeframe and with less devs, which means that they cost less to produce
Microsoft have quite a fine number pretty successful live service games that can offset work on big budget games (like BGS has Fallout 76, Rare Sea of Thieves, 343 Halo Infinite, ZeniMax Online TES Online etc.)
Game Pass revenue can offset quiet periods when they are not releasing any games

And currently they have huge live service cashcows like World of Warcraft, Overwatch, Diablo and Call of Duty

They are more then fine.

 

[wolffy66]

Idk that looking at 1st party games like this really makes total sense. Both companies make money in various ways. The games are there to get people into those revenue makers. Game sales, controllers, ads, 3rd party games, subs, dlc, and game stores all add value. There's no doubt that spider man and halo or whatever games you wanna pick, do that.

 

[Topher]

Which is a dead giveaway it is not profitable.

Could be, but we just don't know either way.

 

[kazuyamishima]

The Microsoft fixation from Sony fans on here is borderline unhealthy… And I’m being kind there - it’s actually fucking nuts.

Ah yes. Another NEOGAF circle jerk about hating Microsoft. If only it were as exhausting for you all to participate as it is to read just a few posts of.

MS is the only console manufacturer not reporting profits or losses, without that info, assumptions are usually made.

There was the assumption that Sony 1st games didn’t made any profit, even respectable insiders/analysts said this. But with simple math and now with the Insomniac leak, it’s clear 1st party Sony games make profits and some more.

Again, without data from MS, only engagement numbers, plus the affirmation from Spencer that they are losing between $100-200 per Xbox console, assumptions are made.

Until they start being clear like the other two, we’ll never know if they make profit from Xbox division or not.

 

[cireza]

Looking at Spiderman the only thing I wonder about is how can it be so expensive to make such a game. I would expect the issue to be here to begin with.

 

[Panajev2001a]

Ever wonder why the majority of Xbox games don't look and animate etc to the level of a Sony title...same for the majority of the industry and third parties?

Because Sony created these type of games and are the only ones who can financially take the risk.

Says the company that spent $80+ Billions on two publishers that were already bringing games to their platforms… and boasts about being able to outspend Sony out of business… come on mate…

 

[daninthemix]

More Sony fanboy insecurity manifesting itself. This forum is riddled with it.

 

[DForce]

Do you honestly think MS made a 2.2bn USD loss on hardware in 2019? Wouldn’t that be around 22M units sold in one year at a 100USD loss per unit at the tail end of the gen?

In the end the debate is between published data on one end and speculation tainted with bias on the other end.

The best argument has always been the FTC and CMA trials. Both agencies had access to MS financials and would easily be able to show it if MS was running a loss-leading strategy, absorbing Xbox losses with their other BUs. This argument would in turn be really strong in an antitrust / anticompetitive behavior case.

And yet… in none of the cases by none of the agencies was the loss-leading argument used. Ever. Almost as if it doesn’t apply.

It's not speculation to say Microsoft takes a loss from hardware because they said it themselves. I also said "other factors" because it takes more than software and subscription services to run the division.

The tweet also explains the ftc portion and how MS reports their profit margins.

If there are other factors unaccounted for is MS' report ( even during ftc testimony) then we can see the 2.6b in profit shouldn't be taken at face value.

I'm not saying they're not making any profit.. but there are some concerns within the XBox division and everything isn't just "fine."

 

[Horseganador]

You don't have to look at any Spiderman 2 budget to know that Xbox is a huge drain on money, but it doesn't matter because MS pays for it.

 

[Team Andromeda]

I

Except you are the one engaging in "hearsay". You said Xbox has been profitable since Xbox One, but you don't have any proof. You point to "results", but Microsoft financial reports don't tell us Xbox division profitability so that doesn't work. If Xbox has been reporting profitability since Xbox One then then this wouldn't even be up for speculation. Folks would just bring up the income statement that would be that. But no one can do that, including you.

And I stand by that unless you can prove otherwise. I remember it took until Halo 3 for the Xbox division to report its 1st ever profit.
I've never read any factual data that the XBox division since the XBox One has made an actual loss for the year.

 

[Topher]

I

And I stand by that unless you can prove otherwise. I remember it took until Halo 3 for the Xbox division to report its 1st ever profit.
I've never read any factual data that the XBox division since the XBox One has made an actual loss for the year.

Then why are you pointing to "results" if you've never read anything factual about Xbox profitability since Xbox One? Absence of data is not proof of anything.

 

[owandeseis]

And how much money are games like Grounded making when it's out of the top 50 on most Xbox games played and only 5k concurrent players on Steam? The same goes for AoE and Flight Simulator.

Seems like a lot of Xbox fans overvalue a lot of Xbox games.

AFAIK Grounded isn't a GaaS, it took 4 years to develop with a team of 10ish developers, it's price is 40€, and 25-30€ when discounted.

On Steam only it's at around 2 million sales, adding sales from Gamepass app (for the 10% discount), Xbox and other PC marketplaces it should be at 4m+, that's over 100 million in the worst of cases, not even adding people who paid for Gamepass just to try this game (and others).

For a game with a 5-10m? budget it doesn't look that bad imo.

But yea MS has some advantages over Sony on this.

- Selling their games on 2 platforms on day 1

- No money spent at all on marketing compared to Sony, except for cases like FH5, i guess they spent some on Halo or Starfield on USA, maybe in UK too, definitely not in the rest of Europe.

- The ratio of digital games sold must be at 90+% for their first party games overall, while Sony's at around 50%?, you get more money per digital sale obviously.

- Smaller budgets overall, "AAA"'s announced for Xbox in 2024 like Hellblade 2 had a developer count of under 100 for most part of it's development if not all, Avowed has been at 80-130 too, which means these don't need to sell a shitton of copies to be profitable, still, a game like Hellblade 2 is going to need a miracle to be profitable.

- Multiplayer and microtransactions on many games translates in longer legs, Halo Infinite, Sea of Thieves, AoE, Grounded, Forza Horizon etc appear on the Steam best selling games every year since their release, and should continue to appear this year too

- Nobody likes this, but MS charging 100+$ versions for their games or 30-40$ without even adding the game for early access and DLC was a master move, one i am absolutely sure Sony will copy very soon, it's so much free money even before the official release, AFAIK games like FH5 or Starfield managed to sell 1-2m of these each.

 

[ManaByte]

AFAIK Grounded isn't a GaaS

It's as much a GaaS as Minecraft is.

 

[midnightAI]

I’ve literally posted three examples coming from lawsuits / testimony data. The most damning one, which is constantly ignored is from the Epic vs Apple trial, where MS is listed to have made over 1B in gaming profit in 2019. This is straight from a trial document and has never been disproved ever.

Where is the evidence that MS gaming division is losing money?

Multiple billions spent on purchasing publishers.

 

[jroc74]

Well, they did pivot so hard into Game Pass last gen so.....

Its all about the engagement now.

 

[DForce]

AFAIK Grounded isn't a GaaS, it took 4 years to develop with a team of 10ish developers, it's price is 40€, and 25-30€ when discounted.

On Steam only it's at around 2 million sales, adding sales from Gamepass app (for the 10% discount), Xbox and other PC marketplaces it should be at 4m+, that's over 100 million in the worst of cases, not even adding people who paid for Gamepass just to try this game (and others).

For a game with a 5-10m? budget it doesn't look that bad imo.

But yea MS has some advantages over Sony on this.

- Selling their games on 2 platforms on day 1

- No money spent at all on marketing compared to Sony, except for cases like FH5, i guess they spent some on Halo or Starfield on USA, maybe in UK too, definitely not in the rest of Europe.

- The ratio of digital games sold must be at 90+% for their first party games overall, while Sony's at around 50%?, you get more money per digital sale obviously.

- Smaller budgets overall, "AAA"'s announced for Xbox in 2024 like Hellblade 2 had a developer count of under 100 for most part of it's development if not all, Avowed has been at 80-130 too, which means these don't need to sell a shitton of copies to be profitable, still, a game like Hellblade 2 is going to need a miracle to be profitable.

- Multiplayer and microtransactions on many games translates in longer legs, Halo Infinite, Sea of Thieves, AoE, Grounded, Forza Horizon etc appear on the Steam best selling games every year since their release, and should continue to appear this year too

- Nobody likes this, but MS charging 100+$ versions for their games or 30-40$ without even adding the game for early access and DLC was a master move, one i am absolutely sure Sony will copy very soon, it's so much free money even before the official release, AFAIK games like FH5 or Starfield managed to sell 1-2m of these each.

My issue is that he added games to the list and said, "Sony can only dream of the recurring revenue these games provide."

So does Grounded have a lot of "recurring revenue" when the player count is low? Or what about Age of Empires? How much profit did Halo Infinite make after the disastrous launch and are they making enough while they make more content for the game?

His statement that Sony can only dream about having recurring revenue is disingenuous for most of the games listed. We know MLB the Show is on multiple platforms that generate revenue and it's a yearly title. We know Gran Turismo 7 is also a GaaS.

 

[HeWhoWalks]

More Sony fanboy insecurity manifesting itself. This forum is riddled with it.

Instead of a blanketed statement like this, what exactly are they insecure about? Who in here has displayed this? What is the Xbox division doing that would/should put people in this predicament?

 

[Gavon West]

Xbox was always a money pit.

So I'm guessing you guys didn't hear that the ABK acquisition literally makes the Xbox division sustainable?

 

[Gavon West]

Instead of blanketed statement like this, what exactly are they insecure about? Who in here has displayed this? What is the Xbox division doing that would/should put people in this predicament?

The existence of this thread for starters? Literally made because Insomniacs budget for Spiderman 2 and how many they have to sell just to break even.

Like, what does that have to do with Xbox?

 

[Banjo64]

Microsoft likely has a ton of money coming in from the GaaS games they have:


Halo Infinite

 

[Banjo64]

So I'm guessing you guys didn't hear that the ABK acquisition literally makes the Xbox division sustainable?

Spend $70b that you didn’t make, claim sustainability.

 

[Banjo64]

I too could be a self made billionaire with a small gift of £1b.

 

[Gavon West]

Their own published games and gamepass has yet to make a profit. It's being upheld by microsoft money

Seriously, how can this be true when Nadella wanted to actually shutter the Xbox division when he came aboard, now he's ALL IN on gaming these days? If Xbox was not profitable, no way would the CEO literally go from "let's maybe look at other options" to "Okay! Let's spend $100 billion on two of the biggest publishers in the business!" And actually go to court to make it happen. Like, WTF?

GaF is literally saying one of the richest companies in the world are just burning money for......reasons??

Make it make sense, broski!

 

[Gavon West]

Spend $70b that you didn’t make, claim sustainability.

Did you add salt to the equation? Cause there's a ton of it in your post. I mean, did you add this much salt when Sony purchased Sony? Sheesh, my guy!

 

[Team Andromeda]

Then why are you pointing to "results" if you've never read anything factual about Xbox profitability since Xbox One? Absence of data is not proof of anything.

So that's code you can't show me any factual data showing where XBox made a loss for the year from the XBox One era?

Also, since the likes of NeoGAF delights in telling the world how little AAA XBox studios release in a single year If you use Insomanica games studios' game costs and account for 3 AAA In-House XBox games a year that's less than a billion out of over $10 to $13 billion in revenue.
I give you another $2 billion for Hardware losses that's still over $5 billion a year in profit unless you can show and prove otherwise...

 

[Heisenberg007]

If only your Xbox bashing posts were half as creative. XBox Group has been profitable since the XBox One.
You don't need to be number one in sales or have the biggest sales to generate profit.

It looked like a mistake to me to have your big games on day one on Gamepass for both the console and PC, but in the end, it worked out rather decent.

What's your source for that? Can you please share it?

 

[Banjo64]

Did you add salt to the equation? Cause there's a ton of it in your post. I mean, did you add this much salt when Sony purchased Sony? Sheesh, my guy!

I’m not salty, I’m just not stupid.

 

[Topher]

So that's code you can't show me any factual data showing where XBox made a loss for the year from the XBox One era?

I'm not the one making the assertion that "results" show anything at all. That's you. It is up to you to back up your own argument. Clearly, these "results" you pointed to were entirely made up.

And what part of "Microsoft financial reports don't tell us Xbox division profitability" are you not understanding?

 

[HeWhoWalks]

The existence of this thread for starters? Literally made because Insomniacs budget for Spiderman 2 and how many they have to sell just to break even.

Like, what does that have to do with Xbox?

Take that up with the OP. The fact that you participated in this thread (going as far as to call someone salty) means the insecurities may just lie with you and him.

Now, unless you have the answers, I'd prefer to hear what he has to say.

 

[Zathalus]

Even a game at Halo Infinites level brings in a very steady income due to microtransactions. Hence why most publishers are attempting to board the GaaS train.

Probably shouldn't have mentioned it, as most people would rather have a laugh about it rather then actually acknowledge the point.

 

[K' Dash]

How do I turn bad news for Sony into even worse news for Microsoft?

The mental gymnastics….

 

[Gavon West]

Take that up with the OP. The fact that you participated in this thread (specifically to call someone salty) means the insecurities may just lie with you and him.

Now, unless you have the answers, I'd prefer to hear what he has to say.

YOU can take it up with the OP. Lol. I'm just wondering what Insomniac has to do with Xbox? I'm not seeing the correlation here.

IDGAF what you want to hear from the thread. That's your business my guy...no offense

 

[Ar¢tos]

Spend $70b that you didn’t make, claim sustainability.

And at the rate of 5bn profit/year it will take 14 years for Xbox just to pay daddy MS for it, after that maybe we can say ATK makes Xbox profitable (if Xbox still exists as a platform by then).

 

[Gavon West]

How do I turn bad news for Sony into even worse news for Microsoft?

The mental gymnastics….

It's text book deflecting. Wild....

 

[HeWhoWalks]

YOU can take it up with the OP. Lol. I'm just wondering what Insomniac has to do with Xbox? I'm not seeing the correlation here.

IDGAF what you want to hear from the thread. That's your business my guy...no offense

No, I can't, because I'm not the one bitchin' about the thread.

I asked a series of questions to someone not named Gavon West, and because it's causing your brain trouble, you continue to insert yourself. And you clearly "give a fuck" because you keep quoting me.

 

[DenchDeckard]

Says the company that spent $80+ Billions on two publishers that were already bringing games to their platforms… and boasts about being able to outspend Sony out of business… come on mate…

I don't get what this has to do with budgets of video games?

 

[Heisenberg007]

If only your Xbox bashing posts were half as creative. XBox Group has been profitable since the XBox One.
You don't need to be number one in sales or have the biggest sales to generate profit.

It looked like a mistake to me to have your big games on day one on Gamepass for both the console and PC, but in the end, it worked out rather decent.

Xbox has posted loss several times - even during their most successful period, Xbox 360.

Then Microsoft just stopped sharing Xbox financial data and started hiding it. If they were profitable, they would be sharing everything transparently.

If you say they are profitable, you'll have to show their numbers. Otherwise, it is only logical to assume that they are hiding their loss.

Also, when asked about the current state of the Xbox business, this is what Phil Spencer had to say:





Not to mention that Phil was having "hard discussions about Xbox P&L" with Satya Nadella and Amy Hood.

 

[Topher]

More Sony fanboy insecurity manifesting itself. This forum is riddled with it.

Actually posts like these are the ones that seem insecure because they come across as being threatened by the existence of the discussion at all.