Former MS executive: Microsoft doesn't make very much on videogames

[DirtyP2002]

TheSource said:

He's right - the EDD department profits like $500m - $1b a year now. Off the top of my head we know just from Xbox stuff it has this much revenue in good years now:

15m * $200 for consoles after retailers get their cut - $3b in revenue

20m * $40 for Microsoft games after discounts and retailers get their cut - $800m

Accessories (Kinect, Controllers) - $300m?

130m * $8 - Royalties on non-Microsoft games - $1.04b / $1040m

Live revenue / XBLA royatlies / DLC Royalties / game advertisements - $500m

I'm being generous on some of this stuff - hw & sw is way down from these levels now - but it comes out to $5.6b in Xbox revenue in a good year, with typically less than $1b in profit. It's a lot of work for a small of amount of money to Microsoft.

Where did you include the 1 billion USD / year from XBL fees?

Anyway, MS just posted a 600 million USD profit for the EDD in the past 3 months. Their profits vary from 800 million to 1 billion over the past 3 years.... How do you come to the conclusion, it is not worth it?

1 billion in profit is too much work for small amount of money... Heck, that is like 8 times the profit Nintendo made in the past 9 months. Not talking about other products benefit from Xbox / Live / Kinect.

And this guy left MS 10 years ago. XBL just started back then and looked like this.

 

Just to give you an idea, how the situation was when he left.