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. |
This is not wrong but definitely I oversimplified and not a financial investor stand point but more of an economic analyst one... Which often diverge in conclusion... For a find investor long term equity, brand equity, all sorts of various assets, sometimes dividend, potential branching etc are really big factors at play.. Cold hard revenue vs profit balance is way to generic in finance..
to all, I also strong believe PC gaming is not a solution, the PC industry has been under heavy fire left and right for a while now, I also believe console gaming as we know it is going the same direction... And I strongly feel like MS for once is anticipating this and Sony is betting on their mage to last longer but will fall behind eventually... The key question here is what will control our living rooms in the future and more precisely what will be our Mai entertainment go to devices.. Cloud computing, Onecore win10, continuum are all solution that enables MS to be ultra versatile across devices and will help them adapt on the go... XBox will be their entertainment output for the mass market whatever this will be and probably a cross all devices they can be on...
