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[Sho_Nuff82]

wat is dis

I think it's an offhand joke about MS' strongest markets.

This question is like asking why does Google bother with biotech and self-driving cars, or why does MS make Surface or mobile phones. The answer is that diversification is expected and necessary for any tech company to remain at the forefront of consumer trends and customer mindshare. The Xbox division is questionably profitable (honestly, they've been obfuscating the entertainment division for years since they folded Zune into it), but it gives MS a foothold and a storefront in a massive market, one that they've grossly mishandled to date on the PC front.

The respective hardware troubles of the 3 generations of Xbox all boil down to a lack of clear vision of where they actually wanted the division to go. I think since they cleared house in 2013, it seems like they're much more cognizant of what consumers demand in order to even consider their box over the very competent alternatives.

 

[13ruce]

Bill Gates.

 

[Herodotus]

OG xbox bombed
Xbox 360 RROD
Xbox One ..................

Not really a history of success.

What an amazing post.

 

[Trago]

It's still alive because it's a successful brand.

 

[ronaldthump]

How is the PlayStation brand still alive?

its doing pretty good.


Considering how little 1st/2nd party output MS is producing and exclusives are no longer really to the platform (Win10). This is actually quite a good question. Just buy a PS4 and PC. or Switch and PC if you lean that that way.

 

[filly]

Because once they regain their footing, release Scorpio and make a dedicated gaming mode for windows 10, they will hold a very large market.

My console where I buy the most games only ever came down to two things, third party graphical superiority and exclusives. The PS4/pro are the best consoles to play third parties on. More games sold equal more willingness to invest in first party studio efforts. Furthering their market dominance.

The Xbox one made Microsoft lose momentum. But I believe that when everything is said and done it was the lack of graphical power when compared to PlayStation that managed to turn the tide. Just like when the Xbox 360 beat out PS3 for the majority of their life cycles. Third parties ran better on that console.

 

[etta]

Fuck, I just ran out of popcorn last night!
Damn, you Ray Donovan!!

 

[Ricky Ricardo]

I'm just relaying information I heard from the one e-friend I have thats British. I don't even know what a chav is to be honest but he told me they like Xbox.

So you lacked the common sense to do some basic research and find out what a chav is?

Thus confirming you simply rushed in here to ejaculate your hot take

 

[Theonik]

Not when you cherry-pick like that. Seriously the only thing your gonna mention about the 360 is RROD?

For what it's worth, MS had to spend $2-3bn on the RROD fiasco. Overall the 360 broke even iirc.
But they also lost a good 2-3bn on the original Xbox between RND, Marketing and selling it at a loss due to not being able to outprice Sony and Nintendo.

 

[AmyS]

North America.

People will buy Xbox Project Scorpio in 2017-2018, and say, a next gen Xbox "Project Gemini", or whatever, in 2020-2021.

 

[Gator86]

Americans and UK chavs who wish they were American

This is hilarious

 

[rakkadakka]

How do threads like this get made?

 

[Ashtar]

In 2012 they had made 56 billion dollars at retail since 2005
https://blogs.technet.microsoft.com/microsoft_blog/2012/05/29/xbox-beyond-the-box/
Edit woops at retail not profit

 

[michaelius]

Microsoft is extremely stubborn when it comes to admitting defeat

Look at Windows Phone or Bing which are still kept alive.

 

[The Albatross]

Eh, I think the Xbox division is profitable, and it still serves as a "loss leader" minus the loss, so simply a 'leader' for Microsoft. The Surface brand was absolutely not profitable for the first years of its existence, but it served as an example for what Windows-based computing devices would be. Microsoft will certainly take a loss on the Surface Studio (despite the relatively lackluster specs vs. price) but the device will provide a reach goal for other manufacturers who will bundle those systems with Windows and the Microsoft ecosystem.

Xbox as a loss leader for Microsoft serves other interests. First, it's important for them to have a hardware and manufacturing division. Second, the Xbox ecosystem sinews into the Microsoft ecosystem. Plus, more and more, tech leaders are becoming advertising companies, and Xbox Live is one of the largest single systems of complex, quality user data that exists beyond maybe LinkedIn, Facebook, and Gmail.

Remember: Amazon doesn't turn a profit and it's one of the most valuable brands in the world.

 

[Bits N Pieces]

I'm just relaying information I heard from the one e-friend I have thats British. I don't even know what a chav is to be honest but he told me they like Xbox.

Fuck, I thought your first comment was just a joke, lol.

And for the record, I would be a Ned not a chav.

 

[jizzlobber]

Not profitable?
I assumed they would be doing fine with all the live subscriptions and all that.

 

[Lee]

49 million monthly Xbox Live users as of the end of November, according to Microsoft.

 

[FZW]

Because if the Playstation brand can survive the PS3, then Xbox can survive a bad generation.

This.

There was a time when I honestly thought Sony wouldn't make it through this gen with the massive amount of losses they endured last gen. But things turned around for them cause they stuck it out. MS is even more financially equipped to do so than Sony ever was.

 

[Version 3.0]

In 2012 they had made 56 billion dollars of profit since 2005
https://blogs.technet.microsoft.com/microsoft_blog/2012/05/29/xbox-beyond-the-box/

That says $56 billion of retail revenue. Not profit.

Anyway, the Xbox is a very strong brand name in the market Microsoft cares most about: the U.S. Even if they're not turning a profit (a dubious claim), there's certainly money to be made. If they are not happy with the financials, they'll re-tool in some way, not abandon such a strong brand.

 

[Dee Dah Dave]

Simple. It's basically a break even business for them, and being rich means it doesn't hurt to keep it around. With the advantage that it may one day lead to significant profitability. And if they hadn't completely goofed this generation the business would also be far stronger than it is right now.

 

[Bessy67]

I feel like Xbox as a brand will be around for the long haul. Xbox as a console I'm not so sure about. It wouldn't surprise me at all to see MS stop manufacturing consoles and start letting other companies manufacture Xbox branded PCs that could be easily connected to a TV and used like a console, similar to Alienware Alpha.

 

[The Omega Man]

Because once they regain their footing, release Scorpio and make a dedicated gaming mode for windows 10, they will hold a very large market.

My console where I buy the most games only ever came down to two things, third party graphical superiority and exclusives. The PS4/pro are the best consoles to play third parties on. More games sold equal more willingness to invest in first party studio efforts. Furthering their market dominance.

The Xbox one made Microsoft lose momentum. But I believe that when everything is said and done it was the lack of graphical power when compared to PlayStation that managed to turn the tide. Just like when the Xbox 360 beat out PS3 for the majority of their life cycles. Third parties ran better on that console.

No they won't, they will continue to be largely irrelevant worldwide, heck they will need a miracle to end number 1 in USA this generation.

 

[m23]

In 2012 they had made 56 billion dollars of profit since 2005
https://blogs.technet.microsoft.com/microsoft_blog/2012/05/29/xbox-beyond-the-box/

That's revenue.

 

[Knuckle Sandwich]

It probably makes a lot of money.

Also I don't think it's going anywhere. Xbox and Playstation will still be around for a long time.

Kinda crazy the amount MS spent on minecraft. Like, they could probably kill Sony with 2.5 billion in just exclusives alone. They could make 25 triple AAA games.

How many of those would bomb? A lot probably. Minecraft is a beast that will continue to make buttloads of money for a long time.

 

[Stabby McSter]

OG xbox bombed
Xbox 360 RROD
Xbox One ..................

Not really a history of success.

 

[intheinbetween]

woa, after reading some replies this thread gets better and better, keep on trolling!

 

[RedRum]

This.

There was a time when I honestly thought Sony wouldn't make it through this gen with the massive amount of losses they endured last gen. But things turned around for them cause they stuck it out. MS is even more financially equipped to do so than Sony ever was.

I give a stern nod to this post.

Imagine if some of these companies, with some of the losses they took, just up and quit?

 

[RoKKeR]

49 million monthly Xbox Live users as of the end of November, according to Microsoft.

Also this.

 

[LiquidSolid]

We dont know how profitable Xbox is because its merged with another division.

But the Xbox One is outpacing the Xbox 360, the Xbox brand is very strong in NA, which is by far the biggest gaming market. They have strong XBLG memberships, and they are very competitive with online games in NPD despite the install base being smaller.

They have spent so much money building the Xbox brand they may as well keep it going, Xbox isnt going anywhere anytime soon. It's also very possible that pride is playing a factor here, Xbox is a very good product, its something they can brag about.

I don't think that's been the case for a while.

As for the OPs question, Xbox is alive because Microsoft wants it to be alive for one reason or another (the current reason is probably to turn it into a Windows 10 machine) and Microsoft has a lot of money. They barely report any figures to their shareholders any more though, so it's unlikely it's doing that well.

 

[Curufinwe]

Microsoft is extremely stubborn when it comes to admitting defeat

Look at Windows Phone or Bing which are still kept alive.

And they pay me $5 a month to use Bing 5 minutes a day.

 

[Crayon]

Okay now what's a ned?

 

[PackAPunchedMick]

Not when you cherry-pick like that. Seriously the only thing your gonna mention about the 360 is RROD?

The original xbox failed to make any sort of impact outside the US.
The cost of the rrod fuck up was astronomical.
The xbox one is non existent outside the US and UK.

Nothing incorrect about what i said.

 

[xabbott]

When it comes to tech companies "losing money" doesn't mean something is failing. Bing lost them money for years and is now vital to the ai in Cortana and 3rd party voice ai. I believe at one time even Siri was using Bing data. It did eventually make them money on it's own too.

Amazon was the same way they lost money for years and even now margins are thin. But when you look at the larger picture and see Echo, cloud services, recommendations, ad platforms, etc. The company is more than just the sales at its store.

To bring it back to Xbox. Xbox gives them a lot of people using Microsoft accounts and possibly other services like Skype, Bing, Edge, and Groove. It makes the Windows/UWP platform more attractive since they can count xbox users. It allows another opportunity to have credit cards on MS accounts via the Xbox's store.

If Microsoft wants to chase the ecosystems that Apple, Google, and Amazon have been winning the xbox is more likely to help them over time vs PCs since they missed out big on mobile.

 

[Ambient80]

Hope the title isn't inflammatory. Don't get me wrong I love the brand (360 was my favourite console last gen), but isn't Microsoft's Xbox division losing a lot of money? I only recall it being profitable for a year. I know Microsoft has a lot of money to burn, but why are they still not able to make a profit? Isn't it about time the brand became profitable?

M'hmm, yeah it'd be a shame if that happened, what with your disclaimer.

...

 

[Kayant]

There isn't much information to determine whether or not Xbox has been profitable for MS because they don't release that info so this question is a bit...

I would guess the reason MS still makes an effort with Xbox even though is a bit at odds with the overall ecosystem is for one it's helped them with some branding i.e Cortana, iirc stuff learned there has been fueled into other divisions so as a "side-line" project it has it's uses I guess. Also now with trying to make their store relevant gaming is one thing that can help with that.

Americans and UK chavs who wish they were American

😂 😂 😂 😂 😂

Spoiler

Come on bruh

 

[Jotaka]

In 2012 they had made 56 billion dollars of profit since 2005
https://blogs.technet.microsoft.com/microsoft_blog/2012/05/29/xbox-beyond-the-box/

That is not profit....

 

[Broken Joystick]

Americans and UK chavs who wish they were American

not any more

 

[Hawk269]

Well it is strong enough that the powers that be at MS gave the green light to not only developing, marketing and releasing the Xbox One S, but also giving Phil and his team the Green light to develop Scorpio. Generally a company that has a struggling division, won't be making that massive amount of investment. Don't worry OP, Xbox is here to stay.

 

[The Antitype]

It's essentially the ONLY part of the Microsoft brand that extends from the office to the living room.

They aren't willing to just forfeit non-business markets to Sony and Apple. They need a presence there of some kind, so they're willing to take a loss on it for now.

Though frankly, if NIntendo wanted to just buy the Xbox brand straight up, pair their 1st party output and Japanese foothold with the online infrastructure, 3rd party relationships and Xbox brand games, I can't think of many people on either side of the fence that would have much objection to such a scenario...

 

[Archpath1]

Halo veterans are getting old, not much longer

Love my xbox though

 

[Kayant]

When it comes to tech companies "losing money" doesn't mean something is failing. Bing lost them money for years and is now vital to the ai in Cortana and 3rd party voice ai. I believe at one time even Siri was using Bing data. It did eventually make them money on it's own too.

Amazon was the same way they lost money for years and even now margins are thin. But when you look at the larger picture and see Echo, cloud services, recommendations, ad platforms, etc. The company is more than just the sales at its store.

To bring it back to Xbox. Xbox gives them a lot of people using Microsoft accounts and possibly other services like Skype, Bing, Edge, and Groove. It makes the Windows/UWP platform more attractive since they can count xbox users. It allows another opportunity to have credit cards on MS accounts via the Xbox's store.

If Microsoft wants to chase the ecosystems that Apple, Google, and Amazon have been winning the xbox is more likely to help them over time vs PCs since they missed out big on mobile.

This basically. Great post 👍

 

[RedRum]

I don't think that's been the case for a while.

As for the OPs question, Xbox is alive because Microsoft wants it to be alive for one reason or another (the current reason is probably to turn it into a Windows 10 machine) and Microsoft has a lot of money. They barely report any figures to their shareholders any more though, so it's unlikely it's doing that well.

?

https://www.microsoft.com/en-us/Investor/earnings/FY-2016-Q4/press-release-webcast

Or did you mean more of a breakdown??

 

[The Giant]

I find it crazy that the Xbox division has been in the red since day 1. They have spend so much money over the last 15 years. Even when they make profit, they are still in the red.

 

[blakep267]

The original xbox failed to make any sort of impact outside the US.
The cost of the rrod fuck up was astronomical.
The xbox one is non existent outside the US and UK.

Nothing incorrect about what i said.

Where it sells has no bearing on how successful a product is. What matters is user engagement, software sales and live users. They can still be profitable and not beat Sony you know.

Also while the cost of RROd may have been a lot, they were bringing in tons annually with gold subs which would've easily offset it

 

[Ambient80]

The original xbox failed to make any sort of impact outside the US.
The cost of the rrod fuck up was astronomical.
The xbox one is non existent outside the US and UK.

Nothing incorrect about what i said.

You're not entirely wrong, but what you're saying is so grossly oversimplified that it becomes a collection of meaningless statements.

 

[cyba89]

I expected the OP to have a bit more data and stuff.

 

[AstroNut325]

Um... I don't think it's profitable. They rolled all Xbox stuff in to More Personal Computing. So it's hard to see if it's truly profitable. If it was, they would be breaking out on their financials.

 

[Kyrios]

Fuck, I just ran out of popcorn last night!
Damn, you Ray Donovan!!

Shame, I still had some left

But seriously, MS must be satisfied with the returns and it's a steady form of revenue I would assume.

 

[MetroidPrimeRib]

I think I understand what you are getting at, but I'm not sure if the thread will produce the answers you want.

The Xbox brand is valuable in that its interchangeable with a game console to most people, I would think.