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Washington post: Investors want MS to kill Xbox
- Thread starter tipoo
- Start date
I'm not sure it would tbh. Industry was doing perfectly fine when Sony and Nintendo were going at it. I think the prospect of Microsoft staying in this industry is far more dangerous and detrimental. Watch them popularise microtransactions in console gaming and also attempt to divert back to DRM heavy, online only, used games capping policies in future.
We probably wouldn't be paying for online play on the PS4 either if it wasn't for Microsoft getting away with, and making a killing charging for it with the 360.
At the same time, Xbox brand has cost them 2.9 Billion in losses from 2003-2012, and is probably going to see short term losses again now that there's a generation shift.
A world without competition is not a good thing. I hope Microsoft finds a way to salvage the brand against internal pressure.
The safest roller-coaster to ride is usually the one that's just been fixed after killing somebody.
Microsoft won't be quick to go back to those policies or ideas after the spanking they took for attempting them.
Plinko
Wildcard berths that can't beat teams without a winning record should have homefield advantage
Yeah, screw all those casuals who bought the original Kinect and made Kinect Sports and Dance Central colossal sellers. That'll get the money rolling in!
Stumpokapow
listen to the mad man
First, those costs are already spent. You don't abandon a product because it cost you money to develop it--you abandon a product because it's costing you money NOW, which the Xbox One isn't. If R&D is the issue, the to exit the industry is before you develop a console, not after.
Second, at no point while they were spending that money on R&D was the division ever a money-loser. Xbox 360 gains made up for Xbox One R&D losses.
Xbox isn't a problem like Bing or Surface, which are actively pissing away cash. Xbox is a distraction. Investors who are critical of MS aren't arguing that Xbox is a money pit, they're arguing that Xbox is taking away focus and tying up capital that could be use on more lucrative projects and programs. Basically, when you're a company that has multiple ten+ billion dollar profit market segments, why play around with 1 billion dollar market profit segments?
It's legally obfuscated away in their Entertainment and Devices Division, which is enormous. In other words - nobody outside Microsoft knows and Microsoft ain't saying.
Come the fuck on.
SolidSnakeUS
Member
You have to think, if Xbox is gone, will we sit at the Sony/Nintendo world? Or would we have a 3rd company again? Also, if it was a business with only two companies, I would say that Nintendo would have to step up their shit by a lot, mainly because Sony would take the majority of the Xbox community.
many places
Member
The Xbox brand is huge. They would be insane to kill it off. Also i would be quite sad to see Bing die. I love Bing Rewards.
Or Steam makes its way to console gaming and adds a whole new meaning to value proposition in the digital realm.
Steam box to the rescue.
What makes sense is make the Xbox into a micro console using Windows 8 and sell it for $100. Make it one ecosystem but leverage the xbox brand. Gets the box at a low price and under the tv for the masses. For Microsoft Sony isnt the competition it's Apple Google and possibly Amazon. Don't want this to happen though!
SwiftDeath
Member
Sega's next console will clearly dominate. Just you wait!
Sony are on life support, Nintendo is run by bumbling fools with zero agility to cope with tech and Amazon want to push andriod gaming. There isnt anyone i can see stepping up. Guys over at Oculus dont have the billions needed to complete, i believe they'll always remain niche.
SolidSnakeUS
Member
That's true. But I still think it's in its own category. It's a bridge of consoles and PC. Might as well call it a PC that is meant for the living room, not a full on console.
This certainly would be the ideal paradigm shift for the industry. Not sure what it would mean for physical media. Probably would go away.
WhiskeyKnight
Member
The Xbox division is one of their few divisions that has seen growth over the past decade. It would be crazy to abandon it after it picked up so much momentum last generation.
I think some of these investors mentally lump Xbox together with the company's otherwise shit devices -- surface, zune, etc.
That's too bad because the Xbox is the one piece of hardware that Microsoft has gotten (mostly) right.
I think some of these investors mentally lump Xbox together with the company's otherwise shit devices -- surface, zune, etc.
That's too bad because the Xbox is the one piece of hardware that Microsoft has gotten (mostly) right.
Those are sunk costs. They shouldn't have an effect on the decision for the future strategy.
No, it's not making a profit, It continues to eat billions. They've burned an astonishing amount of money on it, and almost managed to become the new Yahoo. Congrats to bing.
cpp_is_king
Member
Free money? Seriously? Doesn't anyone understand about the difference between profit and revenue anymore? Their revenue from Xbox can be 1 trillion dollars, if the operating expenses are 1.1 trillion dollars, it's not worth keeping around.
Even if it *is* profitable (which so far indications are that it's not, or at the very least hardly profitable), that money could still better be used somewhere else. If it's taking them, say, 1200 employees to make 50 million dollars worth of profit, how do you know they can't make more than 50 million dollars worth of profit by putting those 1200 employees somewhere else.
So many armchair CEOs in here.
Oppo
Member
Yeah. I am typically a two-console guy just to have the range of software available that I like, but I am waiting on that second console, as X1 has some questionable TV ties that are uninteresting to me... and that second box might easily be a Steam Machine or Amazon Whatever.
Interesting times. No way will MS axe the X1 so soon but let's see if they "lose interest" after the initial foray, as that's sort of what happened with the 360.
If they were gonna keep one device, I think Surface would win vs Xbox though. Just because tablets are going nowhere but up, and I could see people arguing that set top boxes are an older mode of thinking. I wouldn't agree with that, but I could see it.
digoutyoursoul
Member
I'm talking about going forward for the next system should they do so. If it's making that much money why do investors want Xbox gone ? After the last entry in Dance Central the support has been abysmal
Nightengale
Member
Gaming is doomed. /s
Sub_Level
wants to fuck an Asian grill.
gaming_noob
Member
Can't they just study and copy Sony's strategy and make money off of the gaming business?
http://www.escapistmagazine.com/new...Loses-2-Billion-Per-Year-On-Xbox-Analyst-Says
http://bgr.com/2013/11/26/xbox-one-profit-estimate/
http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years
They are actually. Many are speculating that the XBox division has managed losses in the billions and growing. But as stated above, the actual figures are obfuscated and Microsoft has chosen to not comment.
It may be the next evolution in consoles. Especially since PC sales are declining greatly in homes, except for game use.
I don't believe that. The rumours of this blu ray drive omitting console just further highlight that. The fact that pretty much all the Xbox One launch exclusives had a heavy emphasis on microtransactions is also extremely worrying and detestable.
down 2 orth
Member
I'm also curious about whether or not Amazon could or would buy the Xbox devision. It should be pointed out that Washington Post, the source of the article, is owned by the head of Amazon, Jeff Bezos, so there might be some conflict of interest involved.
schwabdizzle
Banned
They will sell it before they kill it.
Remember when Intel and MS worked off each other, each requiring the latest of the other to keep the market moving? Remember when Apple figured out that if they controlled hardware and software they could shorten the cycle and make money on both ends? Remember when Apple was the most moneyed company on Earth?
No kidding, Google and MS want that too?
I doubt MS would quit now, but I don't know who holds shares....
No kidding, Google and MS want that too?
I doubt MS would quit now, but I don't know who holds shares....
Killing off Xbox now feels like a bit of a dumb move.
They just spent the upfront R&D on the system, now they are going to be able to see revenue from that expenditure on console and software sales (console sales may not be profitable, but they generate revenue off expenses that are already booked).
Unless they think they can get a buyer to offset that it makes no sense.
Now, if you want to wind down R&D and start selling off software studios in about 4 years time, there might be some logic there if you want to exit the business, but I don't see shareholder value in cutting and running now.
They just spent the upfront R&D on the system, now they are going to be able to see revenue from that expenditure on console and software sales (console sales may not be profitable, but they generate revenue off expenses that are already booked).
Unless they think they can get a buyer to offset that it makes no sense.
Now, if you want to wind down R&D and start selling off software studios in about 4 years time, there might be some logic there if you want to exit the business, but I don't see shareholder value in cutting and running now.
Didn't MS covered the losses from xbox divison with the android patents income??
No, it's to get people integrated into their ecosystem. People don't realize the xbox division is nothing but a Trojan horse. Microsoft is playing long game but investors are only looking at short term profit.
Thread title is completely misleading (though that's really only because the article's title is completely misleading). Some investors want Microsoft to spin off or sell some portions of the company so that they can focus solely on Windows and Office. Xbox, Surface, and Bing WOULD NOT be "killed." They'd just no longer be owned by Microsoft.
digoutyoursoul
Member
Crying over consoles, can you imagine it ?
statham
Member
Bill Gates is doing a IAMA on Reddit, starts any second. Someone may want to ask him his views on this.
http://www.reddit.com/r/IAmA/comments/1xj56q/hello_reddit_im_bill_gates_cochair_of_the_bill/
http://www.reddit.com/r/IAmA/comments/1xj56q/hello_reddit_im_bill_gates_cochair_of_the_bill/
Steverulez
Member
They closed down 3/4 studios then opened new ones that have taken their time to get going with releases, moved development to Kinect titles whilst retaining the big sequels they wanted and also published lots of titles on XBLA.
I don't think they lost interest, looking at a list of what MS released on 360, its clear they moved to Kinect games then focused on Xbox One titles for which we're seeing quite a lot come out in the first year already
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