Okay I assumed you made a typo, couldn't be sure though...I agree with you now then .Typo. I meant to say $50 million. And I'm not making numbers up, if my memory serves me right Patcher is the one who mentioned the 50 million - so that the game doesn't come out on PS4. Which is in-line with what they paid Rockstar for the GTA stuff.
lol
I'm not surprised. They still have a lot of money though, especially with the recent acquisition of Nokia.
It's true (although not exactly 2 billion - the ROI on Xbox is pitiful and NPV negative when you account for the cost of capital)... There are a lot of people concerned inside MSFT that if the next 2 years don't show a lot of momentum the new CEO will clean house for political capital - in particular OEMs are pissed at MSFT right now - Surface, Xbox, and now Nokia along with killing IPTV and other neutral platforms - are huge departures from MSFT's traditional business partnerships
OEMs are running into the arms of Google - and Valve is looking to make a play
The good news is that if Xbox shuts down, the game studios will be around and they will expand - or at least that's what people have been discussing - so they will likely continue to have a large gaming presence - just more focused on supporting mobile/tablet, and PC - platforms that support their core businesses - you will likely see more TV integration with these devices as well
I don't get it.
If the Xbox brand keeps losing money why does Microsoft keep releasing new ones?
It's true (although not exactly 2 billion - the ROI on Xbox is pitiful and NPV negative when you account for the cost of capital)... There are a lot of people concerned inside MSFT that if the next 2 years don't show a lot of momentum the new CEO will clean house for political capital - in particular OEMs are pissed at MSFT right now - Surface, Xbox, and now Nokia along with killing IPTV and other neutral platforms - are huge departures from MSFT's traditional business partnerships
OEMs are running into the arms of Google - and Valve is looking to make a play
The good news is that if Xbox shuts down, the game studios will be around and they will expand - or at least that's what people have been discussing - so they will likely continue to have a large gaming presence - just more focused on supporting mobile/tablet, and PC - platforms that support their core businesses - you will likely see more TV integration with these devices as well
When an analyst has the following credentials:
- top-ranked software industry analyst for 20 years
- 25 year in Goldman Sachs
- point person for MS during his tenure at Goldman Sachs
- long-time friend of Bill Gates
- long-time analyst of MS from IPO till today
This does not mean he's right in absolute values, but he's not some no-name analyst making predictions on when Apple is going to announce their TV.
Saying it's biased implies he's suggesting they make those moves for reasons other than believing they would be in the best interest of MS shareholders.
I fail to believe this simply because it doesn't make sense. It was only recently (maybe two years or a bit longer) that Microsoft started these Android patent deals and they've been doing it one company at a time. So coincidentally the Xbox division started hemorrhaging 2 billion a year around that time?
I don't get it.
If the Xbox brand keeps losing money why does Microsoft keep releasing new ones?
It costs money to establish yourself as a brand in a crowded marketplace, When Xbox debuted it was against Sony, Nintendo and Sega, the install base is growing to a point where it will be profitable, MS have said they can see 1 billion net gen consoles being sold as they think that next gen consoles are going to be must have media boxes to control the living room and they want windows controlling the living room, not android not sony not iOS.
They're in it for the long game and they think it's going to pay off this generation, hence the NFL Deal the snapping the HDMI in and the Kinect, this generation is make or break for Microsofts strategy which was originally:
Gen 1: become a brand
Gen 2: compete
Gen 3: Dominate and expand the market.
We are between Gen 2 and 3 right now and MS have done a great job so far, but iPads stole the market away.
So he is saying that Microsoft is lying. The Xbox 360 is a profitable device. There is zero chance they are losing 2 billion a year with it.
Maybe FY13 when it is trying to establish a foothold in the market with the One.
I find it very hard to believe that the other ventures in EDD only lost $500m. Would like to see some more specific numbers.
Isn't a couple years ago also when Kinect launched, R&D for Xbone seriously kicked in, and we started getting $150 holiday Xbox deals and timed exclusive CoD content to combat a newly-effective Sony?
EDD has always been a business of huge mystery inflows and huge outflows. The only thing we're really debating here is whether Live and aggressive hardware cost-cutting was keeping the division in the black or whether it's patent royalties and Live.
There is a lot of analyst FUD going around right now as institutional investors try and get their say in the future of the company during this CEO transition.
An eyeopener, many people believed including myself that the Xbox division was profitable, but not even in my wildest dreams would I have thought that they were bleeding so much money.
Well, big MS investors don't like the Xbox division because it's high cost & low returns.
Take a look through financial statements.. even when the Xbox is making money, it's a paltry amount compared to the investment made. They spend too much money to make money.
Investors would rather them focus on their core business that turns high profit margins.
Some companies like Sony and Moto have sufficient patent portfolios of their own that no one can really strongarm them into payments. They are probably in a cross-licensing deal. Either that or MS just hasn't got around to them yet.
Sony and Moto have around 30% of the Android market, hence the 70%. MS hasn't gone after them because they have similarly huge patent pools that MS likely infringes on.
Sony haven't gone after MS because, well, why go to bat for your competition when you can realize an extra few bucks per competitively-priced Xperia? Google hasn't because everyone knows exactly who wins in all-out patent war: the firms litigating the case on either side, full stop.
I don't get it.
If the Xbox brand keeps losing money why does Microsoft keep releasing new ones?
It costs money to establish yourself as a brand in a crowded marketplace, When Xbox debuted it was against Sony, Nintendo and Sega, the install base is growing to a point where it will be profitable, MS have said they can see 1 billion net gen consoles being sold as they think that next gen consoles are going to be must have media boxes to control the living room and they want windows controlling the living room, not android not sony not iOS.
They're in it for the long game and they think it's going to pay off this generation, hence the NFL Deal the snapping the HDMI in and the Kinect, this generation is make or break for Microsofts strategy which was originally:
Gen 1: become a brand
Gen 2: compete
Gen 3: Dominate and expand the market.
We are between Gen 2 and 3 right now and MS have done a great job so far, but iPads stole the market away.
They will probably start making it back once xb 1 is out in the open. Starting a new generation is always pretty costly.
I fail to believe this simply because it doesn't make sense. It was only recently (maybe two years or a bit longer) that Microsoft started these Android patent deals and they've been doing it one company at a time. So coincidentally the Xbox division started hemorrhaging 2 billion a year around that time?
So the question is, what happens if this strategy fails? Do the investors finally say "get rid of it [the Xbox division]" or do they try again or what?
What would be the more likely scenario in that case?
The Ead was profitable before Windows phone launched, before android royalties and before skype was purchased. To suggest its now all of a sudden gone from making hundreds of millions profit and propping up the entire division, to losing two bil a year is a fantastically imaginative narrative, but completely implausable. This guy's pushing an agenda, he's not stupid enough to believe the FUD he's coming out with.
So the question is, what happens if this strategy fails? Do the investors finally say "get rid of it [the Xbox division]" or do they try again or what?
What would be the more likely scenario in that case?
What exactly is a cross licensing deal? If MS could get to them I believe they would have already.
But if Moto has such a huge portfolio that it can protect yourself, why isn't google using that to stop MS from getting royalties from other Android OEMs?
Google might have no option but to go after MS because MS' consortium is going after google for the nortel patents, which includes ads that appear on search results.
For all the talk of "nintendo is doomed" we hear... it seems pretty safe to assume that if either the xbox one or ps4 tank - that company is leaving the industry as a hardware maker.
Nintendo, on the other hand, will keep putting along.
For all the talk of "nintendo is doomed" we hear... it seems pretty safe to assume that if either the xbox one or ps4 tank - that company is leaving the industry as a hardware maker.
Nintendo, on the other hand, will keep putting along.
MS yes: they have a leadership change incoming and shareholders are unhappy.For all the talk of "nintendo is doomed" we hear... it seems pretty safe to assume that if either the xbox one or ps4 tank - that company is leaving the industry as a hardware maker.
Nintendo, on the other hand, will keep putting along.
For all the talk of "nintendo is doomed" we hear... it seems pretty safe to assume that if either the xbox one or ps4 tank - that company is leaving the industry as a hardware maker.
Nintendo, on the other hand, will keep putting along.
They can afford it.
They can afford it enough that along with Apple and a few others they just spent 4.5 billion funding a patent troll company to go after Google and other Android manufacturers.
http://www.wired.com/wiredenterprise/2013/11/rockstar-2/
And this is why the sale of vast patent portfolios, and software patents, are a bad thing. Nobody will win but the lawyers, it's such a waste of time.
For all the talk of "nintendo is doomed" we hear... it seems pretty safe to assume that if either the xbox one or ps4 tank - that company is leaving the industry as a hardware maker.
Nintendo, on the other hand, will keep putting along.
The interesting question is if one or the other bow out; who will buy the remnants? Could you imagine if Valve bought up the remnants of the xbox brand and joined the console wars in earnest?
Leaving consoles is possible, although I don't see it, but their handheld division is plush.