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

[J_Allard]

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!"