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

[sales2099]

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.