Deep cuts at Xbox Europe as Nadella swings axe

[Machiavellian]

BillyBong said:

Machiavellian said:

Just making a guess but not sure if anyone really cares about MS android patents.  Its not game related and its not like MS is hard up for money.  Anyway, couldn't you just have created another thread for that info.

not game related?  well.. if i recall.. these patents possibly play an important part in xbox finances..

"According to Nomura analyst Rick Sherlund, however, Microsoft isn't quite over that hump just yet. It is, in fact, bleeding money at an alarming rate, but nobody's noticed because the losses are masked by Android licensing revenues.

"If we start with the overall traditional [Entertainment and Devices Division] business that actually loses money before corporate allocations and back out the nearly $2 billion 95 percent gross margin Android phone royalties, we conclude that Xbox platform plus Windows phone and Skype lose about $2.5 billion per year, and we estimate that the Xbox platform may account for roughly $2 billion of this," Sherlund said.

That staggering loss, he added, "is concealed by the hugely profitable Android royalties" that come out of licensing deals Microsoft has with makers of Android devices, which were forced by Google's infringement on various Microsoft patents during the development of the Android OS. Xbox is a "cool" product and successful consumer franchise, Sherlund said, "but it also loses a lot of money and we think is a distraction to the more enterprise strengths of Microsoft."

http://www.escapistmagazine.com/news/view/129463-Microsoft-Loses-2-Billion-Per-Year-On-Xbox-Analyst-Says

and i didn't want to start another thread for the fact that there already are too many doom and gloom MS threads..

oh well..

The fact that Skype, Windows Phone, Bing, Surface,  and a host of other stuff are within the same Entertainment/Devices unit, there is no way for anyone to know if the xbox division is losing money.  Just the fact that XBL is a revenue maker alone and the 360 is also very profitable, where exactly is MS losing money from the Xbox division.  The X1 hardware is also profitable or pretty close as was shone by many different breakdowns of the hardware.  

One of the main reasons why some investors want MS to spin off the Xbox division is not that its losing money but instead it makes money.  They want MS to only concentrate on their core and Spin off the Xbox division for a brief revenue gain and increase in the stock price. There are plenty of graphs out there that suggest that the Xbox is the only division that makes money within the EDD group.

Also in your link you forget to mention that Sherlund is an opinion piece not fact.  Sherlund does not know the make up of profit and losses between all the business units that make up  Entertainment and Devices than anyone else outside of MS.  

Again, why don't you spin this off in its own separate thread where it can really be discussed.  This is my last reply on the subject here.