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Forums - Microsoft Discussion - Yahoo: "Microsoft can no longer afford to keep investing in the Xbox"

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Adinnieken on 04 December 2012
007BondAgent said:

Well i think the article is a load of BS also, but they do bring up a valid point, anyways i guess this is why microsoft is pushing kinect so hard, and trying to change the xbox into a media hub.

The Xbox was always intended to be a media hub.  Since before the original Xbox was released Microsoft had eyes on the living room. 

You have to remember, this is the company that bought up WebTV.  Not because WebTV did anything remarkable on the back end, but because they were in living rooms.



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richardhutnik on 04 December 2012
007BondAgent said:

http://finance.yahoo.com/news/steve-ballmer-s-nightmare-is-coming-true-181558610.html

9. The Xbox was never going to make up the slack, and Microsoft can no longer afford to keep investing in it.
In a year of relative gloom, Microsoft's Xbox has become a big bright spot for the company. Kinect is great technology, people are still buying the console, and it's been a great entry point for Microsoft to take over the living room. But, for a company like Microsoft, Xbox isn't enough. Microsoft had $21 billion in operating income last year. The Entertainment and Devices division, which is home to the Xbox had $364 million in operating income. So, as nice as Xbox is, it's not going to be enough to boost Microsoft if the rest of the business collapses.

 

The article isn't saying that the XBox platform isn't viable.  What it is saying is that it alone isn't enough to stop the other trends.  This then becomes a nightmare for Microsoft, because they end up in a similar boat as Sony, in that their videogame division has to stand on its own, without being run at a loss.  This totally changes the game.

Pretty much it is that everything that can go wrong with Microsoft does.



J_Allard on 04 December 2012
kowenicki said:
Akvod said:
Proclus said:
What kind of a failed article is this?

A: $67 billion in cash reserves say hi.

B: Despite massive R&D expenses during the last 3 Q's the division is still profiting.

C: The rest of the business collapsing? lol.

Kinda suprised anyone bothered to post this failure of an "article".

http://en.wikipedia.org/wiki/Cost_of_capital

http://en.wikipedia.org/wiki/Opportunity_cost

Just making a profit isn't enough. The money they make has to be greater than the money they (investors) could have made by investing in something else.

For investors... yeah thats right, I agree. 

Stock YTD:

Google v Nintendo v Sony v Dow v Microsoft.

 

 

So its pretty much in line with Google and the Dow.  Not much opportunity cost there given the correct diversification and volatility required in an effective portfolio.   This of course doesn't factor in the dividends payable.  

Poor Sony stock :(

Stupid article is stupid. "well clearly the division xbox is in is making money but its not making trillions so they might need to stop investing!"



sales2099 on 04 December 2012
richardhutnik said:
007BondAgent said:

http://finance.yahoo.com/news/steve-ballmer-s-nightmare-is-coming-true-181558610.html

9. The Xbox was never going to make up the slack, and Microsoft can no longer afford to keep investing in it.
In a year of relative gloom, Microsoft's Xbox has become a big bright spot for the company. Kinect is great technology, people are still buying the console, and it's been a great entry point for Microsoft to take over the living room. But, for a company like Microsoft, Xbox isn't enough. Microsoft had $21 billion in operating income last year. The Entertainment and Devices division, which is home to the Xbox had $364 million in operating income. So, as nice as Xbox is, it's not going to be enough to boost Microsoft if the rest of the business collapses.

 

The article isn't saying that the XBox platform isn't viable.  What it is saying is that it alone isn't enough to stop the other trends.  This then becomes a nightmare for Microsoft, because they end up in a similar boat as Sony, in that their videogame division has to stand on its own, without being run at a loss.  This totally changes the game.

Pretty much it is that everything that can go wrong with Microsoft does.

MS has made great strides since 2008 to keep Xbox profitable, and thats what matters. And as long as they continue to have their OS and MS Office sales, they can allocate funds to whatever division they like.

Sony doesn't have a lucrative OS and Office software to fall back on. There is no similar boat whatsoever.



Xbox: Best hardware, Game Pass best value, best BC, more 1st party genres and multiplayer titles. 

 

Ssenkahdavic on 04 December 2012

Investors are the key and we know that the investors had at one time talked about dropping Xbox.



 

  

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TheLastStarFighter on 04 December 2012

Some things aren't up for debate:

-XBox is making money right now.
-XBox lifetime has cost far more than it has made, even the XBox 360 probably is not a financially winning project in and of itself.

Now, the question is really will Microsoft continue this investment going forward. I think the answer is definitely yes. XBox has always been about pushing tech so that people buy new Windows-based PC's, and about combating Sony, Apple and others from creeping into their office territory through the living room. XBox 3 will sell at a loss. It will have high-end tech to push people's computing expectations. Those people will buy new PC's. XBox division will lose money. Windows will make money. Microsoft will be happy.



dallas on 04 December 2012

Gaming journalism sucks

/thread



man-bear-pig on 04 December 2012

Worst thread ever?



My prediction threads:

Wii U will sell under 40m units (made on 14th September 2012)

PS Vita will sell under 20m units (made on 30th September 2012)

Wii U will sell under 7m in 2013 - I was right

Halo 4 first 9 weeks sales prediction

PS4 to be down YOY in 2015

Ucell on 04 December 2012

Xbox is huge...I see it well worth the investment made by MS.



dsgrue3 on 04 December 2012
Proclus said:
Dah, a smart guy who's trying to be funny, that's so cute.

(Not you above post).

I find no amusement in willfull ignorance. A simple google search would have sufficed in quickly informing you of such a serious miscalculation. Get a clue.

J_Allard said:
kowenicki said:

For investors... yeah thats right, I agree. 

Stock YTD:

Google v Nintendo v Sony v Dow v Microsoft.

 

 

So its pretty much in line with Google and the Dow.  Not much opportunity cost there given the correct diversification and volatility required in an effective portfolio.   This of course doesn't factor in the dividends payable.  

Poor Sony stock :(

Stupid article is stupid. "well clearly the division xbox is in is making money but its not making trillions so they might need to stop investing!"

This.