By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Microsoft Discussion - Xbox Platform decreases Microsoft's gross margin by $400m for FY2013/14

Taken from their 10K filing;

 

"Computing and Gaming Hardware revenue increased $3.2 billion or 49%, primarily due to higher revenue from the Xbox Platform and Surface. Xbox Platform revenue increased $1.7 billion or 34%, due mainly to sales of Xbox One, which was released in November 2013, offset in part by a decrease in sales of Xbox 360. We sold 11.7 million Xbox consoles during fiscal year 2014 compared with 9.8 million Xbox consoles during fiscal year 2013. Surface revenue increased $1.3 billion or 157%, due mainly to a higher number of devices and accessories sold.

 

Computing and Gaming Hardware gross margin decreased slightly, due to a $3.2 billion or 59% increase in cost of revenue, offset in part by higher revenue. Xbox Platform cost of revenue increased $2.1 billion or 72%, due mainly to higher volumes of consoles sold and higher costs associated with Xbox One. Surface cost of revenue increased $970 million or 51%, due mainly to a higher number of devices and accessories sold, offset in part by a charge for Surface RT inventory adjustments of approximately $900 million in fiscal year 2013."

 

This is on a gross margin basis as well so the operating loss is probably much higher.

 

Taken from here:

http://www.shareholder.com/visitors/activeedgardoc.cfm?f=rtf&companyid=MSFT&id=10123079 (link opens a Word doc).



Around the Network

So,what does that all basically mean?



oldschoolfool said:
So,what does that all basically mean?

Xbox makes no monies.



No troll is too much for me to handle. I rehabilitate trolls, I train people. I am the Troll Whisperer.

oldschoolfool said:
So,what does that all basically mean?


It means MS spent $2.1 billion to make $1.7 billion in revenue from Xbox, meaning that they lost $400 million last FY13/14 from the Xbox platform (XB1 and X360). Now given that X360 would be profitable during that period, the loss must come from the XB1, so in essense the loss due to XB1 is $400 million plus whatever profit X360 brought in during that period.



So, Sony is doomed, Nintendo is more doomed, and Xbox is even more doomed?



Around the Network
czecherychestnut said:
oldschoolfool said:
So,what does that all basically mean?


It means MS spent $2.1 billion to make $1.7 billion in revenue from Xbox, meaning that they lost $400 million last FY13/14 from the Xbox platform (XB1 and X360). Now given that X360 would be profitable during that period, the loss must come from the XB1, so in essense the loss due to XB1 is $400 million plus whatever profit X360 brought in during that period.

Exactly, basically unhappy shareholders are still unhappy with Xbox. Although, that hasn't changed since the original Xbox launched. 



Taken from Gaf, you mean.



kowenicki said:
maverick40 said:
czecherychestnut said:
oldschoolfool said:
So,what does that all basically mean?


It means MS spent $2.1 billion to make $1.7 billion in revenue from Xbox, meaning that they lost $400 million last FY13/14 from the Xbox platform (XB1 and X360). Now given that X360 would be profitable during that period, the loss must come from the XB1, so in essense the loss due to XB1 is $400 million plus whatever profit X360 brought in during that period.

Exactly, basically unhappy shareholders are still unhappy with Xbox. Although, that hasn't changed since the original Xbox launched. 


I'm a shareholder.  I'm not unhappy.

you?

If you can find an unhappy MS shareholder, I'll show you a moron.

a 1 year return of up 35% and long time record highs?  lol

compared to... oh.... I dunno.  Im sure we can find some worhty examples.

 

Makes perfect sense. 

Shareholders are happy with the company as a whole obviously but there are parts of the company to be worried about. 

We had a closed ama with the president of my employer and they had awful things to say about MS as a whole. Internally they are a mess and are bringing down their customers with them. 

You would know all this though because you deal with them on a day to day basis right?



talks of MS selling off the Xbox brand are back now too, the new CEO is not invested in the xbox brand and that was decently evident when Satya Nadella, wrote a 3,100 word memo on the future of the company in which he only spent one paragraph talking about the Xbox brand.

Nearly everything the Xbone was supposed to be MS has done a 180 on, and they have been and still are in PR mode even with the price drop when the xbox still got outsold by Sony in June, they went and said that sales doubled, well thats all good and fine but it still got outsold by what some report 36%.



kowenicki said:
maverick40 said:
czecherychestnut said:
oldschoolfool said:
So,what does that all basically mean?


It means MS spent $2.1 billion to make $1.7 billion in revenue from Xbox, meaning that they lost $400 million last FY13/14 from the Xbox platform (XB1 and X360). Now given that X360 would be profitable during that period, the loss must come from the XB1, so in essense the loss due to XB1 is $400 million plus whatever profit X360 brought in during that period.

Exactly, basically unhappy shareholders are still unhappy with Xbox. Although, that hasn't changed since the original Xbox launched. 


I'm a shareholder.  I'm not unhappy.

you?

If you can find an unhappy MS shareholder, I'll show you a moron.

a 1 year return of up 35% and long time record highs?  lol

compared to... oh.... I dunno.  Im sure we can find some worhty examples.

 

But what has the Xbox platform contributed to the bolded? It doesn't matter that MS is going well, the question for most shareholders would be 'what does the Xbox platform contribute, and what would my return be if MS wasn't losing money the Xbox platform?".  For one the dividends would be higher if MS hadn't lost $400 million in the Xbox platform last year, as a shareholder I'd care about that.