Could Microsoft Purchase Square Enix???

[dallas]

starcraft said:

dallas said:
They could theoretically buy SE just fine. But, why would Microsoft want to commit much greater resourcs than normal on a platform that has been thus far producing horrible financial results? That just doesn't make sense, b/c it is bad financial management. If microsoft actually bought SE it wouldn't have the money that it needs for Windows, dividends, its other ventures, HD-DVD and the 360. Buying SE would handicap Microsoft and it makes little point anyway from a strategic perspective, b/c SE is mostly a company that makes RPGs which means that its products will be big in Japan....but the Japanese don't like the 360. So unless Microsoft is planning on a *huge* price drop in japan as well as this purchase I don't see the point, and even then, that would probably not put them over or even close to nintendo so it would in the end accelerate their losses.

 Last financial year Microsoft's revenue breached $50 billion. Its market capitalisation is $261 billion and its profit last year alone was $12 billion.  Microsoft could purchase SE which is worth $3.3 billion and not even bat an eyelid. It could then go on to purchase Sony, Nintendo and the country New Zealand and still have enought left over for ice-cream and an executives weekend retreat. (ok maybe that last sentence was an exaggeration but Microsoft could purchase SE in its entirety and not experience handicapping of any kind).

1.  When acquisitions happen, it is usually a fact of business that a substantial premium has to be paid on the company being purchased, meaning that if the information that you provided me is correct that SE is in fact worth 3.3billion, then Microsoft might have to pay $6 billion for the purchase. 

2.  Secondly, you do realize that Microsoft has to allocate its earnings among various other things correct?  You completely ignored this point.  Do you have any idea of the expenses that microsoft needs just to keep the Windows division operating?  Do you have any idea of the capital needs to keep HD-DVD afloat?  A company can't just decide to throw away its big moneymaker (windows) and just concentrate on the losing division( 360) and expect for this division to do well by merely making an acquisition.