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Is 7.5 billion too much and MS overpaid?

Sony and Nintendo NEED their consoles and games to sell or they go under. Microsoft only needs the Xbox division to break-even or make a small profit as they are nothing more than a source of supplemental income for the huge conglomerate. Microsoft as a whole couldn't care less if the Xbox stays in third place for the next 25 years, the Xbox is just a way for them to dip their toes in the gaming market, nothing more. On the other hand, if Playstation or Nintendo have one bad generation, talks of bankruptcy quickly begin. Just look at how bad Sony's financial position got after the North Korea hack of 2014, needing to sell off entire hardware divisions like VAIO just to stay afloat.
 
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MonarchJT

Banned
...it will be the same as their other games. On PC and the smallest console platform this gen. Phones and tablets, yeah good luck with that if you're expecting that to massively increase their profits.

And a lot of people don't understand the difference between revenue and profit. Xbox revenue in 2019 was $10.3bn, profit hidden because Microsoft apparently too ashamed to share it. Would love to know how Zenimax will pay itself off inside four years ffs.
..PC + console (also assuming that the xsx + xss will only sell as much as the One) alone reach a number of users that is almost impossible to reach for a single company in the world of consoles (yes there is cap in the number of consoles that can be built, distributed and sold in a given amount of time).
Steam alone add from day one something crazy as 120 millions (constantly growing) of monthly users to your reach and when 5g starts to take hold, the Cloud will add huge amounts of reachable users to that add the usual 50 (the worst case ) to 80 millions (the best ihmo) of consoles and maybe u start to get it. Good look to reach those users trying to sell just a console at 499 dollars. Many people won't understand the difference between revenue and profit but even you seem like you have no idea how acquisitions works. Ms had 7.5 billion in the bank from overseas cash When in bank it grow interests .. if the acquisition profit exceeds the profits given by the monthly interest they have won. For a company which has more than 120 billions on hands to spend it doesn't matter how long it take to get the money back ... as long as it is a reasonable time (also more than the whole generation).
For this reason, if not in this gen .. in the next all console builders will be forced to expand the action range and for this sony for example has already announced that they will publish much more on pc
 
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phil_t98

#SonyToo
Sony and Nintendo NEED their consoles and games to sell or they go under. Microsoft only needs the Xbox division to break-even or make a small profit as they are nothing more than a source of supplemental income for the huge conglomerate. Microsoft as a whole couldn't care less if the Xbox stays in third place for the next 25 years, the Xbox is just a way for them to dip their toes in the gaming market, nothing more. On the other hand, if Playstation or Nintendo have one bad generation, talks of bankruptcy quickly begin. Just look at how bad Sony's financial position got after the North Korea hack of 2014, needing to sell off entire hardware divisions like VAIO just to stay afloat.
You don’t spend 7.5 to stay we’re you are, they spent it to grow
 

Hestar69

Member
I won't say it was awful, but definitely not enough quantity and variety. Relied a bit too heavy on their big three IMO.
Sadly the big 3 were all kinda meh besides the forza games IMO.Gears 4 was meh gears was was alright and halo 5 was a huge dissapointment as a halo fan.I have a feeling the next halo will be great though and I can't wait for it.
 
Sony and Nintendo NEED their consoles and games to sell or they go under. Microsoft only needs the Xbox division to break-even or make a small profit as they are nothing more than a source of supplemental income for the huge conglomerate. Microsoft as a whole couldn't care less if the Xbox stays in third place for the next 25 years, the Xbox is just a way for them to dip their toes in the gaming market, nothing more. On the other hand, if Playstation or Nintendo have one bad generation, talks of bankruptcy quickly begin. Just look at how bad Sony's financial position got after the North Korea hack of 2014, needing to sell off entire hardware divisions like VAIO just to stay afloat.
They have a strategic plan and goals for the Xbox, hence the 7.5bil investment. It is certainly not just to dip their toes in the gaming market.

But yes, the PS division is much more significant to Sony than Xbox is to MS.
 

RJMacready73

Simps for Amouranth
Microsoft needed them, Sony doesnt but its a purchase you can bet will start to pay dividends when the next Elder Scrolls & Fallout come out exclusively on Xbax/PC, heck if they somehow manage to knock it out of the park with a Skyrim in Space aka Starfield, you could see primarily Sony fans like me possibly purchasing a 2nd console just to play those games
 
Microsoft needed them, Sony doesnt but its a purchase you can bet will start to pay dividends when the next Elder Scrolls & Fallout come out exclusively on Xbax/PC, heck if they somehow manage to knock it out of the park with a Skyrim in Space aka Starfield, you could see primarily Sony fans like me possibly purchasing a 2nd console just to play those games
Exactly. Buying a console or PC - makes no difference. People will subscribe to Gamepass to play these games and that's what Microsoft wants.

Edit (timestampted):



:messenger_grinning_sweat:
 
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DaGwaphics

Member
Exactly. Buying a console or PC - makes no difference. People will subscribe to Gamepass to play these games and that's what Microsoft wants.

Edit (timestampted):



:messenger_grinning_sweat:


That is just 2 + 2 = 4. The expected thing, the conventional smart wisdom, is that everything going forward is exclusive other than F2P/MMO. Could MS do something different, sure, but that would be the unexpected, less rational conclusion.
 

Hezekiah

Banned
So one of the richest company’s in the world has made a mega investment and your questioning it?

do they have to share their profits with you ?

while Sony are successful with the console side of the business we all know other areas have struggled and is being propped up by the console sales.

now you bring up 2019 as a year where they massively invested in studios and new hardware development, so
Yeah figures may not be great

I never understand all the concern over sales and profits of these mega rich company’s
You're really missing the point, and frankly EDMIX and Wizz-art just come across triggered putting LOLs everywhere.

Also you seem to think that a major corporation can't be questioned in any way - even though bad investments are made all the time (Microsoft have made plenty, remember Nokia for example).

Microsoft hides the profits of the Xbox division because it's not doing aswell as they would like like, plus they're not doing aswell as their rivals (check the figures for every year this gen). I would have thought this was pretty obvious.

I'm not 'concerned', that's just defensive nonsense people use when they don't have a reasonable argument to make. I'm just pointing out the reality - this isn't an investment they are going to make back inside four years, that is absurd. A small group of you come across as upset that Microsoft is being questioned in any way. But that's what analysis is, otherwise you just end up with a bunch of nodding dogs 😬.
 
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That is just 2 + 2 = 4. The expected thing, the conventional smart wisdom, is that everything going forward is exclusive other than F2P/MMO. Could MS do something different, sure, but that would be the unexpected, less rational conclusion.
Yeah, tell that to the people in this and other threads that are still in denial and think they will be able to play next Fallout or next The Elder Scrolls on PlayStation.

I tried but I got 2 warnings so I won't even touch that subject. :messenger_hushed:
 

Kerotan

Member
Sony and Nintendo NEED their consoles and games to sell or they go under. Microsoft only needs the Xbox division to break-even or make a small profit as they are nothing more than a source of supplemental income for the huge conglomerate. Microsoft as a whole couldn't care less if the Xbox stays in third place for the next 25 years, the Xbox is just a way for them to dip their toes in the gaming market, nothing more. On the other hand, if Playstation or Nintendo have one bad generation, talks of bankruptcy quickly begin. Just look at how bad Sony's financial position got after the North Korea hack of 2014, needing to sell off entire hardware divisions like VAIO just to stay afloat.
Or in xboxs case they have spent billions more then they've taken back so even huge losses are enough to keep it going. There's a reason MS haven't given xbox only results in their financials. Bundling them in with other sectors.
 

Kerotan

Member
Yeah, tell that to the people in this and other threads that are still in denial and think they will be able to play next Fallout or next The Elder Scrolls on PlayStation.

I tried but I got 2 warnings so I won't even touch that subject. :messenger_hushed:
The reality is nobody knows if you will or not.
 

phil_t98

#SonyToo
You're really missing the point, and frankly EDMIX and Wizz-art just come across triggered putting LOLs everywhere.

Also you seem to think that a major corporation can't be questioned in any way - even though bad investments are made all the time (Microsoft have made plenty, remember Nokia for example).

Microsoft hides the profits of the Xbox division because it's not doing aswell as they would like like, plus they're not doing aswell as their rivals (check the figures for every year this gen). I would have thought this was pretty obvious.

I'm not 'concerned', that's just defensive nonsense people use when they don't have a reasonable argument to make. I'm just pointing out the reality - this isn't an investment they are going to make back inside four years, that is absurd. A small group of you come across as upset that Microsoft is being questioned in any way. But that's what analysis is, otherwise you just end up with a bunch of nodding dogs 😬.
I think your missing the point that Microsoft see's that their gaming division earning then enough money to warrant an investment of 7.5 billion and it will bring them a lot of money in the long run.

again why are you personally concerned about knowing profits of a company?
 

The Fuzz damn you!

Gold Member
Microsoft only needs the Xbox division to break-even or make a small profit as they are nothing more than a source of supplemental income for the huge conglomerate. Microsoft as a whole couldn't care less if the Xbox stays in third place for the next 25 years, the Xbox is just a way for them to dip their toes in the gaming market, nothing more.
Xbox is a lot more to MS than that. MS want to own your login. If you’re doing something online, they want it to be through a Microsoft connected account. They have succeeded in the enterprise market, but have zero presence in the social market. Right now, Google and Facebook have that market locked down, with Apple making a strong push for those accounts. GamePass is MS’s back door into that market. Games for Windows Luve didn’t do so well, but connect GamePass to Live and Hello, and you might just get enough users to warrant a “Login with your Microsoft account” strategy — if they can figure out what a “Microsoft account” actually looks like and convince everyone else to agree. Having an account you actually use on mobile is key to that, which IMO is at least part of why MS is so keen to stream games and why Google and Apple haven’t really wanted to play ball.
 

Hezekiah

Banned
I think your missing the point that Microsoft see's that their gaming division earning then enough money to warrant an investment of 7.5 billion and it will bring them a lot of money in the long run.

again why are you personally concerned about knowing profits of a company?
So I see you've moved the goalposts now. Yesterday you were saying that the investment would pay itself off within four years - this from a company estimated to have an annual revenue of ~$500m before buyout 😁. You're all over the place.

Also you keep stupidly using the work 'concerned' because you're so defensive about the issue. Why are you so concerned about what I think about the Zenimax deal. GAF Thought Police reporting for duty 💩.
 

S0ULZB0URNE

Member
Yes...The fallout and the elder scrolls games will sell millions on pc/xbox alone and having those franchises not on your competitors system when people love them is a big gain for Microsoft.Then throw in the other games/IPS and microsoft might have a good first party gen unlike last gen which was AWFUL IMO
Do you have a link saying those games won't be on PlayStation?
 

JLB

Banned
They purchased it for $7b sold it for $350m
Yet people here still think everything they touch turns to gold.

That was a desperate attempt at breaking in the home consumer market... Same as buying up game studios.. Xbox is their last hope.

I think you really believe that a multinational corporation valued in nearly 2T acts out of desperation.
I mean, if Microsoft wanted they could buy Sony, rebranded it as BrandOfCucksBeforeAcquisition Inc. and yet it wouldnt affect MS economics.
 

S0ULZB0URNE

Member
Do you have a link saying they will be?
I got you.



"Speaking at the Jefferies Interactive Entertainment conference, thanks Seeking Alpha, the Xbox CFO explained that whatever content they don’t decide to keep as exclusives for the Xbox platform will either be “first or best” on Microsoft’s ecosystem.

“What we’ll do in the long run is we don’t have intentions of just pulling all of Bethesda content out of Sony or Nintendo or otherwise,” the Xbox CFO explained at the conference.

“But what we want is we want that content, in the long run, to be either first or better or best or pick your differentiated experience, on our platforms. We will want Bethesda content to show up the best as — on our platforms.”

“Yes. That’s not a point about being exclusive. That’s not a point about we’re being — adjusting timing or content or road map. But if you think about something like Game Pass, if it shows up best in Game Pass, that’s what we want to see, and we want to drive our Game Pass subscriber base through that Bethesda pipeline.”

"Xbox boss Phil Spencer has revealed that Bethesda games will only be exclusive to Xbox hardware on a case-by-case basis. Whether those games will ever be fully exclusive or not is not confirmed. If not, Microsoft has stated that they will be able to recoup their $7.5 billion investment without bringing games to PS5."
 

S0ULZB0URNE

Member
I think you really believe that a multinational corporation valued in nearly 2T acts out of desperation.
I mean, if Microsoft wanted they could buy Sony, rebranded it as BrandOfCucksBeforeAcquisition Inc. and yet it wouldnt affect MS economics.
They couldn't buy Nintendo or Sony gtfoh with that dumb talk.
 

devilNprada

Member
I think you really believe that a multinational corporation valued in nearly 2T acts out of desperation.
I mean, if Microsoft wanted they could buy Sony, rebranded it as BrandOfCucksBeforeAcquisition Inc. and yet it wouldnt affect MS economics.

Microsoft no doubt dominates my office life and has the best products out there... How many lives do they dominate for home consumers?

You seem to be confusing the two markets.

LOL on MS being so rich they can buy the world... We would all be stuck with Web TV.
 

JLB

Banned
Microsoft no doubt dominates my office life and has the best products out there... How many lives do they dominate for home consumers?

You seem to be confusing the two markets.

LOL on MS being so rich they can buy the world... We would all be stuck with Web TV.

They can buy this world and 52% of the rest of the galaxy.
And they still would have enough money to buy Nintendo and/or Sony with the exchange.
 
I think you really believe that a multinational corporation valued in nearly 2T acts out of desperation.
I mean, if Microsoft wanted they could buy Sony, rebranded it as BrandOfCucksBeforeAcquisition Inc. and yet it wouldnt affect MS economics.
Didn’t Nintendo basically laugh them out of the office when they wanted to purchase them though?
 
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The Alien

Banned
Came here to say this.

Microsoft wipes their ass with $7.5bn. It's why they don't give a damn if Xbox takes some losses.

The name/brand recognition/having it in their portfolio is enough for them.
Yeah...lets take it to the next level...

That "fuck you money" was paid in CASH. They looked under their couch cushions and found enough to buy Bethesda.

CASH......Barely a blip on their quarterlies. Crazy.
 

phil_t98

#SonyToo
So I see you've moved the goalposts now. Yesterday you were saying that the investment would pay itself off within four years - this from a company estimated to have an annual revenue of ~$500m before buyout 😁. You're all over the place.

Also you keep stupidly using the work 'concerned' because you're so defensive about the issue. Why are you so concerned about what I think about the Zenimax deal. GAF Thought Police reporting for duty 💩.

So these game will b available on game pass day one, that will likely add more subscribers per month both on Xbox and pc.

you will also be able to buy these games as well which many people will do.

so just out of curiosity do you know the rumoured number of game pass subscribers currently?

mans for the concerned bit your the one that keeps bringing up about profits? Not me
 
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Rounding error for Microsoft
Lmao Lol GIF


Fucked up part is its true lol
 

Chukhopops

Member
Didn’t Nintendo basically laugh them out of the office when they wanted to purchase them though?
You can’t buy what’s not for sale or has enough purchaseable shares to do a hostile takeover, but since Nintendo has a 50bn USD market cap according to Forbes MS could technically afford it if they really wanted - that’s only twice what they paid for LinkedIn lol.
 

FrankWza

Member
That "fuck you money" was paid in CASH. They looked under their couch cushions and found enough to buy Bethesda.

CASH......Barely a blip on their quarterlies. Crazy.
Came here to say this.

Microsoft wipes their ass with $7.5bn. It's why they don't give a damn if Xbox takes some losses.

The name/brand recognition/having it in their portfolio is enough for them.
I think you really believe that a multinational corporation valued in nearly 2T acts out of desperation.
I mean, if Microsoft wanted they could buy Sony, rebranded it as BrandOfCucksBeforeAcquisition Inc. and yet it wouldnt affect MS economics.

damn. It’s all so simple. Series x for $249.99 and series s for $99.99. Everyone gets gamepass for .03 cents a month for 3 years. Put everyone out of business and then raise the prices back to $499 and $299 and gamepass goes back to whatever price it is. When is this going to happen? Do you get a bottle of champagne to pop and a bunch of singles to make it rain on your console with each purchase?
 

JLB

Banned
damn. It’s all so simple. Series x for $249.99 and series s for $99.99. Everyone gets gamepass for .03 cents a month for 3 years. Put everyone out of business and then raise the prices back to $499 and $299 and gamepass goes back to whatever price it is. When is this going to happen? Do you get a bottle of champagne to pop and a bunch of singles to make it rain on your console with each purchase?

What you dont get is that Microsoft is a benevolent corporation that no longer embraces savage neoliberal capitalism. That was Microsoft in the 90s. Now it makes some smaller companies like Sony or Nintendo to "compete" though its only to not hurt their feelings. Get IT!
 

EDMIX

Member
you seem to think that a major corporation can't be questioned in any way

Look seriously stop making these assumptions to argue... None of us are saying this company cannot be questioned as this entire thread is speculation on whether or not we believe they overpaid.

A small group of you come across as upset that Microsoft is being questioned in any way

I'm not even sure how the fuck that could possibly apply to some of us as I'm a person that has not owned an Xbox since the original Xbox.... By no means would I be considered some Microsoft fanboy or Xbox fanboy or anything like that to seriously try to argue that my viewpoint is based on not wanting Microsoft to be questioned....

Stop trying to figure out if the comment has to do with some sort of favorism towards one company or the other and simply respect that the answer were giving you is simply how we truly feel about the situation instead of making it sound like it's some secret conspiracy or something.

I'm not on Microsoft's payroll lol

I simply believe that this purchase makes complete sense for the company and they very well might be able to make lots of their money back and the next couple years if you truly factor in everything that's going to be coming out. You're talking about a company that is going to own Doom, Fallout the next Elder Scrolls, licensing Indiana Jones IP and Starfield on top of all the media that is going to span from them especially with Fallout becoming a show on Amazon and the rumor of Elder Scrolls becoming a show for Netflix.

Microsoft is not simply looking at the next year or so they're looking at the next 10 to 15 years of what they're going to do with those properties and with how they're treating gamepass I very much believe them going the Netflix for gaming approach can truly make them a forced to be reckoned with and the deal makes complete sense when you look at it completely.

Other than that simply have a respectful discussion with the users instead of continuously going off topic as if everyone has some conspiracy on why they have a view one way or the other lol

My God the majority of your post is simply arguing about other users....

believe what you want, and maybe you're right. But that 30% cut, which represents more than 70% of the revenue both Sony and MS generate from gaming, is more important than you think.
Their goal of being on every device is more important. That 30% cut is better then not having the extra revenue and install base sir. I don't really think MS cares about a 30% cut when they just spent almost 8 billion. They are thinking about the long game. That is like fucking saying EA really cares about some 30% cut or something. They care about making as much money as they can on as many platforms as they can. I don't see a company like MS spending 8 billion to then pretend they don't want to make more money as if 30% is suppose to scare them from making more money. That 30% cut is their gateway to even more install bases. So EA may have tried Origin, but they never fucking made it while ignoring other install bases, they still released titles on many platforms.
They purchased it for $7b sold it for $350m
Yet people here still think everything they touch turns to gold.

That Nokia deal is irrelevant to this. Things like that happen in business, Doom, Elder Scrolls, Fallout etc all proven IP will continue to make them money generations from now in gaming, film, shows, merchandise etc. This deal makes more sense for MS long term with what they are trying to do with Gamepass.
 
No its not too much for Microsoft as they can easily afford it and this will even itself out in the long term as these are great IP's they have now to bolster Gamepass.
People need to look long term at these investments.
 

DaGwaphics

Member
Their goal of being on every device is more important. That 30% cut is better then not having the extra revenue and install base sir. I don't really think MS cares about a 30% cut when they just spent almost 8 billion. They are thinking about the long game. That is like fucking saying EA really cares about some 30% cut or something. They care about making as much money as they can on as many platforms as they can. I don't see a company like MS spending 8 billion to then pretend they don't want to make more money as if 30% is suppose to scare them from making more money. That 30% cut is their gateway to even more install bases. So EA may have tried Origin, but they never fucking made it while ignoring other install bases, they still released titles on many platforms.

I think you're thinking of the wrong 30% cut. LOL

The most important 30% of all is the cut you get as a platform holder on every piece of software or digital sale that occurs on your platform. When you look at the operating profits of even the largest third-parties it pales in comparison to what can be earned by a major platform holder (Nintendo, Sony, MS, Steam, Epic Store, etc.). Platform holders become third-parties only out of extreme necessity (bankruptcy - here's looking at you Sega), even the smallest of the big three platforms has a much bigger earning potential.

I would think the goal for MS is to spread GP to PC, Console, and devices where they can continue to exist as the primary platform holder (iOS via browser and android) and TV. If streaming starts to click, I'm sure they'll expand beyond just the GP library and allow users to purchase any games available on the Xbox store, thus giving them more earning potential as a platform.

We'll see how it goes. I think they have their eye on a bigger prize. It's already been stated that Zenimax's annual revenue (not profit) has only been $500m, that's including PS, that's it. This is the revenue that you think MS is going to trade their platform in for (a platform that generates billions annually already). Seems like it would be smarter to use the purchase to grow the platform that actually generates the most revenue, but that's just me.
 
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EDMIX

Member
I think you're thinking of the wrong 30% cut. LOL

The most important 30% of all is the cut you get as a platform holder on every piece of software or digital sale that occurs on your platform.

ohhhhh I better understand what you mean, but I never stated MS would want to lose that as in no longer have a platform with XB or PC.

I would think the goal for MS is to spread GP to PC, Console, and devices where they can continue to exist as the primary platform holder (iOS via browser and android) and TV. If streaming starts to click, I'm sure they'll expand beyond just the GP library and allow users to purchase any games available on the Xbox store, thus giving them more earning potential as a platform.

We'll see how it goes. I think they have their eye on a bigger prize.
I think the goal for MS is to have GP on all devices regardless.

They ultimately get money either way.
 

Hezekiah

Banned
So these game will b available on game pass day one, that will likely add more subscribers per month both on Xbox and pc.

you will also be able to buy these games as well which many people will do.

so just out of curiosity do you know the rumoured number of game pass subscribers currently?

mans for the concerned bit your the one that keeps bringing up about profits? Not me
I spoke about GamePass two days ago ffs. The number of subscribers is one of the few things we do know about it in terms of information from Microsoft.

I repeat. You said you think the deal will pay for itself within four years...but now you don't want to talk about profits 🤡.
 
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