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[GodofWine]

I dont think you can do that "math" based on those sentences. They arent saying the revenue and cost of sales were X and Y, just that they increased by X or Y. Its a look at trends but not definitive numbers.

If you took the mirroring statement telling you what the Surface revenue and costs were, you would infer it made a profit and I thought I just read that its lost them a billion dollar so far.

 

[ChiefofCitadelSecurity]

Agreed.

Sony essentially created the most standard "sequel" for 360 and PS3 owners. All Microsoft had to do was make something like the 360 but more powerful.

Yep, stick with the status quo and maintain multiplatform dominance. They needed that one badly.

 

[JaggedSac]

I think it does

Looks like the reporting has changed a little since I looked last. It doesn't include transactions from Xbox Live marketplace.

D&C Other , comprising: Resale, including Windows Store, Xbox Live transactions, and Windows Phone Store; search advertising; display advertising; Office 365 Consumer, comprising Office 365 Home and Office 365 Personal; Studios, comprising first-party video games; our retail stores; and certain other consumer products and services not included in the categories above.

 

[KoopaTheCasual]

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.

I agree with this. I'm someone who thinks console sales won't fall off a ledge anytime soon (the market with the exception of the Wii audience has hovered around 200 million for decades). However, that means the size of the market is pretty damn stagnant. With rising dev costs (for AAA games) it's not sustainable to keep making bigger and better games with bigger a better engines, when the pool of the market isn't growing with it.

It's why we're seeing greater emphasis on DLC and microtransactions. The faithful gamers haven't gone anywhere, and will keep buying, but it's just not enough in today's market, and publishers are trying to get 'creative' to keep things going.

I really wonder what the endgame will be? Will the industry experience a rapid AAA contraction? Or will engine efficiency become the next golden goose? Or will streaming and subscription services be a way out?

 

[Derpcrawler]

This kind of fanboyism needs to be killed.

Why? Xbox One is my prime console, I also have PS4. I think that buyer ultimately vote with their wallet. In this case MSFT will think twice when bloating gaming console price with non-gaming features that end up hurting core market - gamers. I mean they released underpowered overpriced console compared to competition. They deserve every last bit of that loss. Next time they will think twice before piggy backing their other divisions on the back of Xbox.

Everyone wanted to put their shit on Xbox, including Skype, SkyDrive, Entertainment (TV TV TV SPORTS TV), Xbox Music (Zune), Windows 8 division, etc. Console ended up jack of all trades, master of none, even more, the core function, gaming, ended up sub-par compared to cheaper PS4. At least graphics wise (also UI/OS bullshit when console just launched).

 

[gogogow]

So Nintendo lost a few hundred million dollars, MS lost 400 million and Sony made 30 million profit?

Sounds like a healthy industry to me for sure.

Sony? A profit? They'd wish. They (gaming division) lost $78 million.

 

[JimiNutz]

I can't imagine there being a successor to the XB1. A dedicated gaming console
from MS seems outlandish in the long-term. They'll probably shift focus to PC
development.

Maybe MS should actually build PCs?
Surface is pretty amazing hardware. They could release different power options (like a basic, an elite and a pro for hardcore gamers). Kind of like Steam machines but with full versions of Windows installed. I'd buy one.

 

[QaaQer]

I thought the Xbox division always lost money for Microsoft and the patent royalties hid it from investors?

Is this the first time they've broke it down?

 

[shacklesmcgee]

Looks like the reporting has changed a little since I looked last. It doesn't include transactions from Xbox Live marketplace.

Yeah its super weird how it's set up. It looks to have consoles, accessories, 2nd and 3rd party game sales And Xbox live subscriptions, but not Xbox live purchases, digital games or 1st party games.

 

[digoutyoursoul]

It's not great is it ?

I still can't believe how they fucked up it's reveal especially when it's a successor to a superb system like 360 was/is.

I hope they can turn the platforms future around anyway, always liked Xbox.

 

[KoopaTheCasual]

Sony? A profit? They'd wish. They (gaming division) lost $78 million.

The guy you quoted accidently used Q1 2015 figures, not the Fiscal 2014 figure.

 

[Occam]

You reap what you sow.

 

[Principate]

Sony? A profit? They'd wish. They (gaming division) lost $78 million.

Yeah... sometimes I do wonder why so these companies bother with this industry I mean it's great but it's the poster boy of opportunity cost unless you deal in mobile/handhelds (even handhelds is now questionable..

 

[Muchi Muchi Pink]

Time to go third party.





j/k

 

[efyu_lemonardo]

You reap what you sow.

I find the consumer base to be one aspect that makes the gaming industry more difficult than other forms of digital entertainment/consumer electronics.

Yep, stick with the status quo and maintain multiplatform dominance. They needed that one badly.

The smartest decision Sony made with PS4 was using parts that will go down in price quickly. The importance of that cannot be understated. And even they had to suffer enormous losses on PS3 to re-learn that lesson.

 

[JaggedSac]

Yeah its super weird how it's set up. It looks to have consoles, accessories, 2nd and 3rd party game sales And Xbox live subscriptions, but not Xbox live purchases, digital games or 1st party games.

Yep, just noticed 1st party is in D&C Other as well.

We also are getting revenue for the last 3 years for what they are now calling D&C Hardware & Gaming division:

------------------------2014------2013-----2012
Xbox Platform-----8,643-----7,100-----8,045

 

[Solaire of Astora]

So... a Brundle...?

 

[AusRoachman]

If anyone can afford a loss it's Microsoft, they just have to raise the price of office slightly and bam they make it back in an instant.

It would be a lot drastic if it was sony losing 400 million. I hope both survive because without competition you wouldn't have hard drives, top notch networking, free games .

So I hope they both turn in a healthy profit in the long run and keep trying to one up each other.also not including office and live revenue means it probably turns a profit overall.

 

[intheinbetween]

I don't saw Microsoft saying that Xbox One is sold at a profit.

http://venturebeat.com/2013/11/29/t...sts-381-and-why-this-matters-in-the-long-run/

But thanks to market research firm IHS, we know what each machine costs to manufacture, and that tells us a lot about how this console competition will unfold in years to come. The cost analysis tells us a lot about the choices that the console designers on each side made, and how those will affect the competition for years to come.

xbox one ifixit teardownMicrosoft’s Xbox One costs bout $471 to make, compared to $381 for the PS4. This naturally explains why Microsoft is selling the Xbox One for $500, while Sony is selling the PS4 for $400.

 

[Zalman]

I was expected them to lose money, but not THAT much. That's kind of scary.

 

[Uncle Rupee]

I was expected them to lose money, but not THAT much. That's kind of scary.

They lost a billion dollars four years in a row during the og Xbox's life cycle. This is chump change.

 

[Sandfox]

I'm curious to see what changes are made over the next year.

 

[SparkTR]

Maybe MS should actually build PCs?
Surface is pretty amazing hardware. They could release different power options (like a basic, an elite and a pro for hardcore gamers). Kind of like Steam machines but with full versions of Windows installed. I'd buy one.

You're on the right track, but Microsoft shouldn't build them, they're best as a software company not a hardware company. The Xbox project should have been a living room focused branch of Windows that OEMs and other hardware partners could have utilized.

I understand closed hardware could yield them greater software revenue and subscriptions, but where's all that buried under these hardware losses?

 

[Taurus]

Nah, I don't think that's the correct lesson. My view is that hardware fuck-ups (Nintendo: expensive, underpowered; MS: more expensive and less-powerful than its direct rival) and crappy strategy (Nintendo: failed hook/USP, relatively primitive services; MS: terrible publicity campaign, poor potential market analysis) have a much higher impact on a company's bottom line than before.

Oh, and Sony's profit is quarterly. The others posted fiscal year results.

Oh, I see. So if we account Sony's last full fiscal year results, they lost money too? GG

Sony? A profit? They'd wish. They (gaming division) lost $78 million.

Yup.

 

[Fafalada]

Sony made no mistakes with the PS2 and obliterated the competition.

PS2 had a few missteps (eg. first year shortages were a result of manufacturing miscalculations, not because of unprecedented demand, and that even got repeated when PS2 Slim was released).
And several PS3 missteps (outside of the price) mirrored the PS2 (glut of unused features/ports that got removed in later hw-revisions, manufacturing problems etc.).

 

[erawsd]

Agreed.

Sony essentially created the most standard "sequel" for 360 and PS3 owners. All Microsoft had to do was make something like the 360 but more powerful.

There is brilliance in choosing simplicity and knowing when/where to take risks. Sony's decision to take a step away from "the ultimate media box" and build a narrative around the PS4 as a system for gamers was a very smart move.

 

[efyu_lemonardo]

They lost a billion dollars four years in a row during the og Xbox's life cycle. This is chump change.

I think the situation has changed a lot since the original XBOX. Back then console gaming was seen as a strategic investment, today I'm not sure people believe that anymore.

PS2 had a few missteps (eg. first year shortages were a result of manufacturing miscalculations, not because of unprecedented demand, and that even got repeated when PS2 Slim was released).
And several PS3 missteps (outside of the price) mirrored the PS2 (glut of unused features/ports that got removed in later hw-revisions, manufacturing problems etc.).

Didn't we have a thread a week or so ago praising the PS2 for being one of the first cheapy available DVD players? A lot of people (including analysts) agree that was a very big factor in determining the platform's early success. And since console sales are highly influenced by momentum, you can be damn sure that early success was crucial to success throughout the generation.

The point is, Sony was smart to take advantage of the arrival of DVD, but economic waves like that don't come along very often, and when they come or what form they take is usually not something even a global company can control.

 

[allan-bh]

http://venturebeat.com/2013/11/29/t...sts-381-and-why-this-matters-in-the-long-run/

$500 is retail price, stores buy for less.

And this $471 cost is estimated, we don't know how accurate is.

 

[Principate]

They lost a billion dollars four years in a row during the og Xbox's life cycle. This is chump change.

That was because of the belief of better days. These are those better days (they're still pretty shitty).

 

[SamVonSam]

I dont think you can do that "math" based on those sentences. They arent saying the revenue and cost of sales were X and Y, just that they increased by X or Y. Its a look at trends but not definitive numbers.

If you took the mirroring statement telling you what the Surface revenue and costs were, you would infer it made a profit and I thought I just read that its lost them a billion dollar so far.

Quoting because this can't be pointed out enough. The statement says revenue grew this much and costs increased that much. That doesn't give you an accurate assessment of how much the Xbox division lost.

 

[JaggedSac]

I was expected them to lose money, but not THAT much. That's kind of scary.

Well, the XBox as a whole did not lose that much money. He just took the increased revenue and increased cost of revenue and associated it with the XBox One. Which, seems to be true since they do say they were both mainly due to XBox One. But it doesn't actually give the gross margin for the platform a whole.

 

[nynt9]

Time to go third party.





j/k

This is amusing, because if this were a Nintendo thread with the exact same numbers, more than half the posts would be saying this.

 

[The Inventor]

Well deserved!

Wait. What? Are you happy?

 

[intheinbetween]

$500 is retail price, stores buy for less.

as they always did

And this $471 cost is estimated, we don't know how accurate is.

as accurate as the 381$ cost for PS4.

both consoles are being sold to break-even, not being sold at a loss. both companies stated that, they couldn't afford sold them at a loss

 

[Castef]

I dont think you can do that "math" based on those sentences. They arent saying the revenue and cost of sales were X and Y, just that they increased by X or Y. Its a look at trends but not definitive numbers.

If you took the mirroring statement telling you what the Surface revenue and costs were, you would infer it made a profit and I thought I just read that its lost them a billion dollar so far.

Four pages of thread before someone highlights this.

Nice.

 

[R3TRODYCE]

Intense.

 

[Occam]

I find the consumer base to be one aspect that makes the gaming industry more difficult than other forms of digital entertainment/consumer electronics.

Motivated by shortsighted greed while completely overestimating their market power, Microsoft certainly worked long and hard to drive away consumers. If that was the plan, it worked out brilliantly.

 

[AusRoachman]

There is brilliance in choosing simplicity and knowing when/where to take risks. Sony's decision to take a step away from "the ultimate media box" and build a narrative around the PS4 as a system for gamers was a very smart move.

There is no brilliance from winning because the other team fell over, it was just luck pure and simple . Same reason 360 was winning early , sony falling over on price and availability.

 

[Uncle Rupee]

Wait. What? Are you happy?

He explained himself on that very page. MS fucked up big time with the Xbone. Do they deserve to be making money on it given everything they've done wrong?

 

[NemesisPrime]

I was expected them to lose money, but not THAT much. That's kind of scary.

First of all OT calculations are a bit weird.

Second... this is not really a lot of money for MS.

 

[JaggedSac]

Revenue
Computing and Gaming Hardware------------9,628

Gross Margin
Computing and Gaming Hardware------------893

 

[GodofWine]

I was expected them to lose money, but not THAT much. That's kind of scary.

Im just gonna repeat myself till I gain traction or someone tells me Im wrong...but..

Those highlighted sentences only talk about CHANGES in revenue, not ACTUAL revenue, you cant calculate profits or loss based on the info quoted in OP, unless you know what the revenues and cost were BEFORE these changes.

Edit : Yay Castef!!!!

 

[sublimit]

That's just pocket change for MS.

 

[SerTapTap]

Pretty sure the X1 is sold at a larger loss than the PS4, and now with the kinect being taken out, that didn't help

What? They were bragging about Xbox ones selling at a profit day one even before launch. This isn't an issue if selling individual units at a loss it's ask the research + probable under performance

 

[Phediuk]

It blows my mind that 13 years in, the Xbox brand is still a huge sinkhole for Microsoft.

 

[JimiNutz]

You're on the right track, but Microsoft shouldn't build them, they're best as a software company not a hardware company. The Xbox project should have been a living room focused branch of Windows that OEMs and other hardware partners could have utilized.

I understand closed hardware could yield them greater software revenue and subscriptions, but where's all that buried under these hardware losses?

Yeah your way makes way more sense, I'm just one of those people that likes MS hardware. I think that, despite being a software company, they make good hardware and I'd like to see them build PCs that are optimised for the latest version of Windows.
As a console gamer it would be a lot easier for me to buy like a MS Pro PC (or whatever it'd be called) and know that it will run all the latest games for the next however many years.
I appreciate that I'm probably in the minority though and that your plan would make more sense for MS.

 

[Percy]

Pocket change down the back of Bill Gates' couch cushions.

It blows my mind that 13 years in, the Xbox brand is still a huge sinkhole for Microsoft.

MS just needs to hand a few more blank cheques to the Xbox division and the situation will turn itself around any day now.

 

[Occam]

Don't read too much into it.

 

[Uncle Rupee]

What? They were bragging about Xbox ones selling at a profit day one even before launch. This isn't an issue if selling individual units at a loss it's ask the research + probable under performance

Yeah, before launch. How quickly did they start selling them with $50 vouchers and pack-ins like Titanfall? And now the price drop... we don't know if they're still making a profit or not.

 

[nynt9]

It blows my mind that 13 years in, the Xbox brand is still a huge sinkhole for Microsoft.

What Microsoft hardware brand has ever been a massive success overall?