| Kerotan said: MS are in the business of making money and the xbox brand has lost them a lot of it. XBL is a shining light that has brought in billions. Would Microsoft give up billions in revenue just to sell a few extra XB1s? I doubt it. And I don't blame them either. |
Can't sell Gold on a platform if you let it shrink to irrelevance. XB1 has been losing steam as the gen goes on, not gaining. So why cling to something that is a tiny fraction of their income when there is a better choice?
MS has said about half of XBL subscribers pay for Gold. We may take this as possibly optimistic as a PR statement, but let's just take it at face value. Accepting somewhere between 40-50M XBL users, let's go with the higher number and cut that in half. 25M gold subscribers. Now let's assume EVERY one of those subscribers pays the full $60 instead of heavily discounted as is easy to do in many cases. Result? 1.5B/year revenue. Not pure profit, assuming you believe everyone who likes to say they have to pay for servers/etc. Which is true to some extent, but whatever. MS's revenue last year as a whole? 93 billion. So yeah, maybe 1% of revenue. For which they have to pay for a bunch of content, servers, advertising, R&D, support, etc.
Microsoft would have made more money simply investing in Apple and Google stock than ever starting Xbox. Some wise folks have analyzed Xbox as a whole, and it's virtually certain that in totality, it's still yet to get out of the red when you factor everything from FY '00 to current day.
But as I've noted in previous posts, even the losses don't mean much to MS as a whole. Xbox is tiny to them.
Why not make your customers happier? Besides, MS gets a solid cut out of every peripheral, media purchase, and 3rd party game sold on the platform (to say nothing of huge income from 1st party content). Financially it would probably be a wash either way at the end of it, only this way you end up with more users and higher customer happiness.
