theprof00 said:
Actually, in terms of stock health, if you make 200 billion in revenue (sales to distributors) but it costs you 199,999,999,999 (only a dollar profit). Your company will not be worth very much. See, in terms of wall street, corporate health is calculated as profit divided by revenue. The better your profit margins (difference between sales and cost) the better your company will do. In the market, a company that sells 10m consoles and only makes a dollar on each is worth less than a company that only sells 1,000 consoles, but makes 1k on each. to be completely clear, even if ms made the exact same amount of money with a "steam box" even if it sold less, if they make a higher profit margin, their stock will go up, which means their value goes up. |
Thing is, higher revenue goes hand in hand with higher profits... They aren't selling the Xbox One at a loss (they probably had a loss when they unplugged the Kinect) and there is little reason for this revenue not to represent profit, especially with stuff like XBL around (not only is it profitable, but their costs are covered by the Cloud division, so it's revenue only for them)...
