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Xbox One lost $400m for Microsoft for FY2013/14
- Thread starter zomgbbqftw
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intheinbetween
Member
iirc it's not being sold at a loss, I think part of that loss comes from R&D for XB1
efyu_lemonardo
May I have a cookie?
Ask yourself this: is Microsoft's investment in gaming still a strategic one? If it is, what big payoff do you see in the future, and how far away/likely is it?
Sony is also in a much much worse position as a company than they were in the 90s. Ironically that may actually mean good things for the PS brand, as it'll be given greater emphasis by the company, but that also means bearing greater responsibility.
The console market is in a bad place, and it has to expand or transform if it wants to survive.
paradise_circus
Member
hopefully, ms can get a catch up and live along the playstation. otherwise consoles seem to have a very hard time.
Daffy Duck
Member
They wont do it the way they did with the Xbox One again.
They will have (hopefully) learned something and do it totally different next time.
Pancakes R Us
Member
It's a shame, IMO. Whatever people think of Xbox, it has done a lot in this industry and brought in some much-needed competition (this is coming from someone that doesn't own or find Xbox appealing at all). I'd like to see them make less stupid decisions and continue to release hardware, don't want to go back to the days of one super-power in gaming, which means less for the consumer in the end.
I don't saw Microsoft saying that Xbox One is sold at a profit.
Bjoern the Smexy
Member
That's four times the loss Nintendo had with Wii U.
Well holy shit, I guess.
Well holy shit, I guess.
Nikodemos
Member
Not entirely true. Some aren't particularly evident, but others are quite visible. Pretty much everyone could tell the Saturn's crazy complicated architecture would be a dud. The PS3's ultra-ambitious nature and sky-high price was another visible mistake. Wii U's branding, price and marketing target was yet another.
Sony made no mistakes with the PS2 and obliterated the competition. Nintendo made no mistakes with the DS2 and ran away with the money. The mistakes they made with the Wii didn't affect their 7th gen performance and they were extremely profitable.
Winning strategies might not be obvious, but some pitfalls are.
UnluckyKate
Member
THat seems a lot but every consoler maker are loosing on the first and usually the second year. Considering the amount of money thrown at in marketing and the problem we know they are facing, it only seems logical to see such loss. Not surprised. But I don't get worried for MS. They've been loosing money on Xbox branch since the begining and they kept at it so I don't see why it would change
I dunno. Competition is great and all but even with one dominating platform (PS2) I still had a great time as a gamer. In fact, the PS2 gen was my favourite.
Is it always fanboyism though?
and that's why it would be ridiculous for Nintendo to wade into the console power war. I could only see them losing and losing significantly. At least by focussing on their own strategy as they are now, they can muddle along relatively happily and be in control of their own destiny.
This is easy to say in hindsight. We're talking here like Sony knew what MS was going to do, saw them fail, and did differently.
Sony's overall strategy isn't same-old, same-old. They have been and are pioneering two of the biggest changes in how games are sold in a long time (games as a subscription, games as a streaming service). And on the console front, PS4's strategy is actually quite different from PS3's. Where PS3 leaned in on the idea of a multi-use all-in-one box, PS4 refocussed on the idea of a game box.
It's not same old same old, it's just a different way of introducing changes that respects the strengths and appeal of the existing models IMO, and that shows lessons learnt from the missteps of PS3. They knew what the market wanted because PS3 forced them to listen up.
All of that said - this loss here is hardly critical, especially for a new gen launch year. I'm sure they expect improvement this year.
mercenar1e
Member
I thought the Xbox division always lost money for Microsoft and the patent royalties hid it from investors?
SomedayTheFire
Member
Can you not say just as well that Sony's profits and lead so far is a reason for Nintendo to go into the "console power war"?
They kept at it because they thought the living room computing market was something that it didn't turn out to be. It's never going to pay off for them the way they expected it too back in 2001, right now the current Microsoft is just stuck with the bad decisions of Balmer's rule.
Because there APU is more complex and bigger so it costs more to produce also they make less of it so it will be more expensive.
There's a lot of reasons possible for the delta between PS4 profits / Xbox One loss:
- PS4 likely costs less to manufacture than XB1 at this point (don't think weaker specs means it must be cheaper to make, XB1 has HMDI in, the ESRAM, etc. and Sony are typically faster than MS at getting manufacturing costs down)
- XB1 could have additonal costs included in the accounting right now - reversing all their policies would cost, given the pace they're trying to catch up on their OS I wouldn't be surprised if MS spent a lot more on network configuration, OS, etc. than Sony
- MS could be spending more on deals (NFL, TitanFall) than Sony - assuming those are included in Division costs
Bear in mind early losses are common - Sony has just really caught the market right with their relatively safe "just a game console but powerful" strategy although I do give them a fair bit of credit for a hardware design that is superior to XB1 yet the same cost or less to produce.
Bundles are either old games for free, or new games where the cost of the game is added in. For example, the PS4 Destiny bundle is $450. Microsoft was offering Xbox One with Titanfall at $500, and there were limited discounts on top of that.
Psycho_Mantis
Banned
Sony only lost $81 million iirc
efyu_lemonardo
May I have a cookie?
I can go into further detail if you like, but the main point is your analysis is based on hindsight and it is also entirely subjective. What you or your social circle approve or disapprove of is not indicative of large scale market trends, no matter how hard you want to believe it.
It's really not difficult to find plenty of mistakes even looking at giants like PS2 and DS. A lot of times success is no more in your control than failure is, and succeeding doesn't mean you automatically have the deep understanding required to replicate it.
Bill Gates said it best: "Success is a lousy teacher, it seduces smart people into thinking they can't lose."
Destiny is only $50? Or is this some sort of bribe?
also, Service and Software wise they could just lean back, listen to Microsoft's offer and the General public's reaction and act accordingly.
the really clever idea was the timing of things.
* Show some lines and edges (meaning the console is "done") but release no Information about game licenses, used game policies, online requirements, whatsoever.
* Wait for Microsoft to announce their policies
* observe the public backlash, act accordingly, gloat a bit.
Before the MS conference, the PS4 might have been an empty Shell, both figuratively as well as literally. the OS pretty much was - and still is - unfinished.
Sony didn't do anything to shine really, they just were clever enough not to offend anyone (by means of policies or pricing)
1970 Chevelle SS
Neo Member
Being weaker does not mean cheaper to produce. That ESRAM and Kinect among other things are catching up to them financially.
Sure. It's a cheap one, but at least it's something to keep the bundle from being pointless.
That's not true. Go back to the NeoGAF threads where people got laughed at for saying that Sony is implementing 8GB of RAM (GDDR5 was not even considered, because that would be too expensive/risky). So most thought it would be 4GB of something. Sony surprised everyone and took a huge risk. Not to mention their online strategies, used game policy, etc. since that was what the publishers wanted. You can be damn sure that EA and everyone else dropped online passes because they thought that MS and Sony will implement some sort of DRM into their consoles.
semiconscious
Member
same. the 'competition for competition sake' argument, as some kinda objective fact, just don't work for me...
Mass_Pincup
Banned
IIRC they already said in February that they won't have any DRM on PS4.
Eight gig shouldn't have been surprising to anyone who know anything about tech. The GDDR5 was still a big surprise though as console makers have a rep for going for the lowest price they can get for parts. The biggest thing though is they didn't let crazy Ken design the console again, but focused on getting a more pc-like experience for devs.
Dee Dah Dave
Member
Hardly surprising with all the bundles they've been throwing together in a bid to shift units.
I don't see it changing much either. Microsoft are going to have to buy market share this generation.
I don't see it changing much either. Microsoft are going to have to buy market share this generation.
Jimmyfenix
Member
Tell me more.
gigantor21
Member
I'm really wondering that too. These numbers would mean that the 360 is the only Xbox to make any money so far AFAIK--and even that was after losing a billion dollars before seeing any profit.
But then even if all of them were profitable, I've never bought into MS's larger strategy with their consoles. I feel like many people's loyalties begin and end with the Xbox brand, and it doesn't do anything to strengthen their interest in the broader MS ecosystem beyond that.
Yeah. Since every game being announced at E3 is Xbone exclusive it'd explain where the $400 million went.
Next E3 will cost Microsoft even more.
Diprosalic
Banned
and the most fun was had on the poorly performing Nintendo console, just like it is now.
Uncle Rupee
Banned
Microsoft continues to simply buy their way into the videogame market... big surprise. This company is a fucking joke and its console wouldn't even exist if it wasn't for the massive amounts of cash Microsoft made while it enjoyed a total monopoly in the OS market for years. Any other company and the Xbox would have been just another 3DO or Jaguar. Yet despite MS losing billions upon billions of dollars on Xbox over the years, it is Nintendo we hear about that is constantly doomed - a company which has survived solely on game hardware and software for more than 30 years running.
shacklesmcgee
Member
DidntKnowJack
Member
Yeah, but isn't this sort of thing fairly common after the launch of new hardware? I don't know about how much companies lose with new launches, maybe that's the differentiating factor here? Is 400 million a much larger amount than is usually the case?
Maximilian Kolbe
Member
The cost of 180?
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