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[Sify64]

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"?

Not really, if Microsoft can't make similar sales/ profits when their strategies, third party relations and target audience are nearly one to one, that doesn't bode very well for Nintendo's chances.

 

[HORRORSHØW]

There is no brilliance from winning because the other team fell over, it was just luck pure and simple .

serious?

 

[JaggedSac]

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!!!!

We do know revenues and margins, they are in the doc:

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

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

 

[drgambit]

I guess those 18K layoffs make up for the loss...

 

[efyu_lemonardo]

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.

not trying to defend microsoft in the slightest, but why wouldn't they be motivated by greed?

the real truth is this: as long as companies like MS rely on other businesses to offset huge, continuous losses they suffer in gaming, the success of this industry is something of an illusion. There are very few companies actually thriving exclusively on gaming products and services.

 

[Y2Kev]

You guys can't compare sony's operating loss with Microsoft's gross margin.

When you put it in perspective, Xbox really is a pimple on microsoft's ass. Even this huge loss is tiny. The upside potential is just so limited for a company where gross margins are sky high and revenues are in the tens of billions on a quarterly basis. I'll never get it. Whatever.

But zomg, isn't this talking about changes in margin and not absolute margin?

 

[GameAddict411]

They only have but themselves to blame for this, no excuses. They were basically destroying whats left of the brand while everyone was watching last year.

 

[maabus1999]

This is filing is stating the gross margin decreased by 400 million, not that Msft lost 400 million. Big difference.

 

[SerTapTap]

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.

SP3 finally gets almost everything right. In a sane world ms would be working with Valve on Windows steam machines that still have some sort of productivity and non gaming entertainment factor.

 

[Castef]

This is filing is stating the gross margin decreased by 400 million, not that Msft lost 400 million. Big difference.

SSSSHHHH!

Don't spoil the fun, this thread is simply awesome.

 

[monome]

I wouldn't want to be a hardware/UI engineer at MS right now.

 

[Ricky_R]

Cause and effect.

 

[drgambit]

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.

I think the Xbone was supposed to be the 'Microsoft PC', however with all the 180s its back to just being a gaming console.

 

[gaming_noob]

Based on the initial reveal it appeared Microsoft was aiming for a different target market than the 360's...it was very confusing. At the time I know most people just wanted to know how powerful it was going to be compared to the PS4 after months of speculation - at least I was. More expensive, less powerful, harder to develop games, Kinect... Their strategic team is out of the loop.

 

[Marlenus]

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

Mice and Keyboards perhaps?

 

[Y2Kev]

Yeah this thread is misleading. Unless someone wants to calculate the actual margin (which I don't think Microsoft has ever disclosed) I am going to lock it.

 

[JaggedSac]

You guys can't compare sony's operating loss with Microsoft's gross margin.

When you put it in perspective, Xbox really is a pimple on microsoft's ass. Even this huge loss is tiny. The upside potential is just so limited for a company where gross margins are sky high and revenues are in the tens of billions on a quarterly basis. I'll never get it. Whatever.

But zomg, isn't this talking about changes in margin and not absolute margin?

Interestingly enough, just in terms of revenue, the XBox Platform(which is minus 1st party software and XBox Live transactions) generates 10% of MS' revenue as a whole.

XBox Platform-----$8,643
MS--------------------$86,833

 

[zomgbbqftw]

You guys can't compare sony's operating loss with Microsoft's gross margin.

When you put it in perspective, Xbox really is a pimple on microsoft's ass. Even this huge loss is tiny. The upside potential is just so limited for a company where gross margins are sky high and revenues are in the tens of billions on a quarterly basis. I'll never get it. Whatever.

But zomg, isn't this talking about changes in margin and not absolute margin?

Yes, it is changes in margin, but in both cases they specifically say Xbox One is the major factor for the changes in Xbox revenue. Overall the changes contributed to a $400m erosion in the gross margin.

 

[watership]

SSSSHHHH!

Don't spoil the fun, this thread is simply awesome.

I don't see what's so awesome in letting misunderstanding and inaccurate perceptions fester on GAF, just for 'LOL's. It makes the site look foolish.

 

[Banjo-Kazooie]

There's been lots of speculation that Satya Nadella isn't interested in doubling down on unprofitable hardware anymore like previous CEO's were.

I doubt they are going to drop the price even further like a lot of people are expecting them to.

Yet keeps pushing Surface which lost 1.7billion so far.

I won't believe that until Surface and Bing go bye-bye

 

[CouldBeWorse]

Yes, it is changes in margin, but in both cases they specifically say Xbox One is the major factor for the changes in Xbox revenue. Overall the changes contributed to a $400m erosion in the gross margin.

Erosion from WHAT?

 

[Y2Kev]

as I mentioned, if you want an "erosion of gross margin" thread you can do that. Otherwise I think this is not accurate.