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

[nightsurge]

VGKing said:

Mr Puggsly said:

VGKing said:
Nothing really new but it should open some of these people's eyes. The Xbox business isn't this immensely profitable division for Microsoft like some make it out to be.

Well even early on it seemed like MS was primarily looking to diversify. Its clear MS didn't step in expecting big profits and continued on even after huge losses on the original Xbox. It was probably the biggest financial disaster in the industry... until PS3 rolled around.

I think most of us knew Sony before the Playstation, but putting out a game console gave them a cult following. MS accomplished the same thing with gamers via the Xbox.

Either way, it looks like the Xbox brand really has become a financially worthwhile endeavor. I presume the most profitable aspect of Xbox is those Live memberships. I've heard guesstimates as high as 20 million Gold members. If that's true, that's a nice chunk of change.

Those Xbox lIve Gold subs are extremely optimistic. I believe the last actual number we had was like 12million, and that doesn't mean these people are paying $60 a year, they could be finding sales for these, they could be paying for the 3month Gold subs. It's end-gen and I expect Gold subs to be no more than 15m.(being a bit optimistic)

The 12 million figure was almost 2 years ago.

Also, I find 15 million figure to be a lowball considering at least 14 million people have played Modern Warfare 3 online. Granted, there could be duplicates or canceled/created accounts. At least MS doesn't include those numbers to inflate their picture like Sony does lol... all MS's figures are "Active" users not total accounts ever created, duplicated, abandoned, forums, psp, ps3, PC, etc... haha

And really, the EDD (the division that houses Xbox, Zune, Windows Phone, and a few other devices) has been posting great profits for the last few years. The only device in that list that is profitable is the Xbox brand. All those other devices have been incurring losses like mad, and yet the EDD still shows ~1billion profit a year?!?! Compare that to the other 2 main gaming companies out there and see how that stacks up in recent years.

The Xbox itself is a mad money maker and if it had it's own division we would likely see profits double or more compared to the EDD division!