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Forums - Microsoft - Regardless of what Iwata says, It is Microsoft who can not compete according to Sean Malstrom.

 

Can Microsoft compete ?

Agree 111 46.44%
 
Disagree 128 53.56%
 
Total:239
ethomaz on 15 October 2013

Seece said:

I'm going on common sense Ethomaz, following the division for years it makes no sense something else is bringing in tonnes of profit and Xbox is making losses when we know the hardware is profitable and has been for many years (many many links on that on google)

Dude give it up, there is enough evidence there to support what I'm saying and nothing to support what those articles say. Just intent on thinking worst case scenario.

I'm not in disagree with you... I'm just saying there are somthing weird because the financial news from the good site are saying the same things... can be everything false? Of course but for what? That I can't understand.



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Seece on 15 October 2013
ethomaz said:

Seece said:

I'm going on common sense Ethomaz, following the division for years it makes no sense something else is bringing in tonnes of profit and Xbox is making losses when we know the hardware is profitable and has been for many years (many many links on that on google)

Dude give it up, there is enough evidence there to support what I'm saying and nothing to support what those articles say. Just intent on thinking worst case scenario.

I'm not in disagree with you... I'm just saying there are somthing weird because the financial news from the good site are saying the same things... can be everything false? Of course but for what? That I can't understand.

Did they come up with a detailed explanation on why the E&D is profiting all these hundreds of millions and that there are other products in the division more popular than xbox and xbox is still losing despite being profitable hardware for half a decade? I doubt it. Simple thing is even 'good sites' are dumb sometimes and do no research/twist facts.



 

DanneSandin on 15 October 2013
Puppyroach said:
DanneSandin said:
It's actually pretty important. Let's say they continue this trend of losing money on their Xbox division; it's far more likely that investors will want to close that division then. As I understand it, the Xbox brand as a whole have lost more money than MS has earned (I could be wrong, but that's what I keep hearing) in the long run, and that can not continue.

I think that's why ppl keeps bringing it up; losing money is never a good thing. They're fine today, but how about tomorrow?

What are you talking about? Of course the history is completely irrelevant when looking at the profitability of a brand. It is almost an impossibility to not rack up losses when you start a new business segment. The chalenge for MS was even greater since noone before had been succesful in a three-way race in the console business.

What you need to look at is how this investment has payed of, which shows they have had 6 straight years of profit. If they continue on this path, the E&D department will only add brand awareness and hard cash to MS as a whole. The trend is actually really positive at the moment.

You are contradicting yourself: Of course the history is completely irrelevant when looking at the profitability of a brand

they have had 6 straight years of profit [...] The trend is actually really positive at the moment.

To have a trend you need to have a history - so it ISN'T irrelevent to look at MS's history in console gaming. The history is PART of the trend going forward. Yes, Xbox is making money now, but from what I've seen the brand as a whole has lost more money than its made, and that's something to remember because it's important for the brand to generate money from the get go with the Xbone - MS has said so themselves.

Investors won't be interested in Xbox if it doesn't recover the losses sustained from the past 12 years. True, they're having a positive trend earning tons of cash, but that's also a trend they have to keep alive.



I'm on Twitter @DanneSandin!

Furthermore, I think VGChartz should add a "Like"-button.

DanneSandin on 15 October 2013
Seece said:
DanneSandin said:
Seece said:
Why are people obsessed with MS making a loss on Xbox over 6+ years ago??? It's dumb. Pure and simple. The division has been profiting for the last 6 years. So what's more important? it's a sunk cost and means jack.

It's actually pretty important. Let's say they continue this trend of losing money on their Xbox division; it's far more likely that investors will want to close that division then. As I understand it, the Xbox brand as a whole have lost more money than MS has earned (I could be wrong, but that's what I keep hearing) in the long run, and that can not continue.

I think that's why ppl keeps bringing it up; losing money is never a good thing. They're fine today, but how about tomorrow?

Did you read what I wrote though? MS has been profiting on the xbox for the last 6 years.

I did, and I gave my 2 cents as to why people keep bringing it up. It's a positive trend they need to keep rolling. Just think about this scenario for a while (I'm not saying it's a likely one, but anyways): what if Xbone suffers the same fate as Wii U? Great sales the first 2 months, but then the sales plumbets. MS will be forced to cut the price on Xbox for it to remain competative, and it'll probably be a cut by $100. That means they'll either make A LOT less money, or even start to lose money. If that's the case (and again, I'm NOT saying it will be), then it'll matter a great deal that the xbox brand "only" has been profitable for 6 years.

You don't have to argue with me about this (you and ethomaz have been at it for quite a while now it seems ;)), I'm just trying to explain why people keep bringing it up. I actually don't know. I'm just guessing. The history might be very important for the future.



I'm on Twitter @DanneSandin!

Furthermore, I think VGChartz should add a "Like"-button.

Machiavellian on 15 October 2013
DanneSandin said:
Seece said:
Why are people obsessed with MS making a loss on Xbox over 6+ years ago??? It's dumb. Pure and simple. The division has been profiting for the last 6 years. So what's more important? it's a sunk cost and means jack.

It's actually pretty important. Let's say they continue this trend of losing money on their Xbox division; it's far more likely that investors will want to close that division then. As I understand it, the Xbox brand as a whole have lost more money than MS has earned (I could be wrong, but that's what I keep hearing) in the long run, and that can not continue.

I think that's why ppl keeps bringing it up; losing money is never a good thing. They're fine today, but how about tomorrow?

I believe you are missing the point.  The Xbox division is not losing money and have not lost money for over 6 years.  As far as investors closing any division within MS, people need to check MS history.  MS is a growth company, investors do not rule the company.  Also using cut and slash investors as proof of the direction of the division seems silly.  There are a few investor that are trying to get at least 1% vote so they can bring up crap to make a quick buck.  This has gone on for years and probably will continue for years to come.  If people follow the investors that would want the Xbox division broken up are the ones looking for a quick turn and burn.

The Xbox division is a long term stragety where growth, stability and profit is more important than being the number one console seller.  MS could easily undercut the PS4.  They could drop Kinect and take a lost on the console to gain more marketshare.  The key is their goal is totally different from what fanboys want. 



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Machiavellian on 15 October 2013
ethomaz said:

Seece said:

Yes they're talking about the early losses in the first years which were heavy, they don't plan to repeat that. Second part of your post, not being rude but I can't decipher it.

It is not like you trying to show to us neither like I think... there are something hidden.

MS never had heavly profit with 360, Kinect and Live.

Ethomaz, why do you make these declarative statements when you have no proof how much profit MS has made with the 360, XBL, accessories, Kinect etc.  No one really knows because the Xbox just like the PS for Sony are part of divisions where the OEMs can hide what is happening.

You want to know the measuring stick for how good or bad the 360 division is doing.  You only have to look at the investment MS is willing to make for this gen.  The size of an investment for the next iteration of your hardware is a clear indication of commitment a company has in a product.  Why don't you go pull those numbers and see where it takes you.



drkohler on 15 October 2013
Seece said:

Did they come up with a detailed explanation on why the E&D is profiting all these hundreds of millions and that there are other products in the division more popular than xbox and xbox is still losing despite being profitable hardware for half a decade? I doubt it. Simple thing is even 'good sites' are dumb sometimes and do no research/twist facts.

There is no research into EDD possible, since MS never details which parts inside the division are profitable or not. We can all guess until we are blue in the face and only list some known facts like:

a) Some parts inside the division (like Peripherals, Mac Software) were highly profitable throughout the years, while other parts were not. We have seen one statement by MS (1-3 years ago) saying that "all parts inside the ED division are profitable". Again, we have NO numbers to decide.

b) Ms did shift money around (like the $1b additional loss due to rrod which was NOT charged to EDD. Same with specific, heavy advertising costs which were (partially?) drawn from the corporate expenses coffin. Again, we have NO specific numbers to decide.

c) Here is a bit of thought for you: In Europe, X360 typically sells for around $200-$250 (during XMas season, that price actually INCLUDES Kinect. In GB, X360 only took off when the 99pound bundles started to appear...). At the same time, PS3 typicaly sells for around $329-$349. Now if Sony can bearely make a profit with those prices, what makes you think MS profits on hardware?

d) online X360 charges are the key profit in the ED division



Mnementh on 15 October 2013
pokoko said:
First, I think he misunderstood what Iwata meant. Iwata was talking about not trying to match strengths with Sony and Microsoft but to rather concentrate on their own strengths.

Second, he's somewhat right about how people perceive the Xbox brand, though that really isn't Microsoft's fault. People were getting a little crazy by assuming that the Xbox brand would grow market-share at the same rate as the 360. That was really unlikely from the very start.

In reality, the Xbox brand is still weaker, globally speaking, than the Playstation or the Nintendo brands. It's far easier to grow from zero than from a close third. It took everything lining up perfectly for the 360--the biggest FPS at the time, a year's head start, monumental mistakes from Sony--the odds were against the stars aligning perfectly once more. They're going to have to fight for every inch gained this generation.

I agree with this and JWeinCom.

/thread



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fatslob-:O on 15 October 2013
J_Allard said:
fatslob-:O said:

#1 You do realize that their entertainment divison is mostly composed of xbox ?

#2. So microsoft can keep making more failures and go out of the video game business ? (They can't just keep taking losses after losses y'know.) BTW the GCN was an awful console and the mass market responded accordingly by not buying the console. 

#3. Oh but their absolutely is such as the xbone outpricing themselves in this economy. LOL

Sales are sales and they tell what the mass market wants and the mass market points to nintendo this generation and most most probably playstation for next generation. BTW nintendo kept afloat by monopolizing the handheld market. We all know that sony wasn't good at this generation but will microsoft be better at next generation ? 

#1 Oh really? Please, run down for all of us the exact breakdown oh what products are in this division and how much each and every one of them made/lost during this graph. Since you apparently know that. I will be on pins and needles awaiting your response.

#2 You aren't really getting it, which is strange considering you're the one who posted an article saying Nintendo actually can compete. It's about profit, not being #1 on the leaderboard. If the Xbone is profitable, that's a success. The Xbone could sell less than the 360 and still be more profitable. Again, it's all right there in the article you yourself posted. And your opinion on the quality of the GCN is entirely irrelevant. It was a profit for Nintendo. These companies are in the business of making money, not shooting to the top of VGChartz.

#3 And yet preorders for the console are higher than they were for 360. And the PS3 was even more expensive and yet it turned out ok sales wise.

Sales are nice but profits are what matters. Have you read the article you posted for this thread?

#1 Now windows phone and zune aren't exactly successful, are they ? You tell me what else was successful about their entertainment and devices division other than the xbox. 

#2 Profits matter but microsoft still hasn't broke even yet. So that arguement works against you and BTW my "opinion" about gamecube being a failure is in accordance to the mass market so it doesn't matter whether I call it a failure or not it is recognized as a failure by the general public.

#3 Preorders don't tell the whole story and FYI the PS3 also had another model going for 499 too just like the xbone but this time it's in a worse economy. 

Yeah I have already read so why are you bringing other console manufacturers into this when this is about microsoft being able to compete ?



Machiavellian on 15 October 2013
drkohler said:
Seece said:

Did they come up with a detailed explanation on why the E&D is profiting all these hundreds of millions and that there are other products in the division more popular than xbox and xbox is still losing despite being profitable hardware for half a decade? I doubt it. Simple thing is even 'good sites' are dumb sometimes and do no research/twist facts.

There is no research into EDD possible, since MS never details which parts inside the division are profitable or not. We can all guess until we are blue in the face and only list some known facts like:

a) Some parts inside the division (like Peripherals, Mac Software) were highly profitable throughout the years, while other parts were not. We have seen one statement by MS (1-3 years ago) saying that "all parts inside the ED division are profitable". Again, we have NO numbers to decide.

b) Ms did shift money around (like the $1b additional loss due to rrod which was NOT charged to EDD. Same with specific, heavy advertising costs which were (partially?) drawn from the corporate expenses coffin. Again, we have NO specific numbers to decide.

c) Here is a bit of thought for you: In Europe, X360 typically sells for around $200-$250 (during XMas season, that price actually INCLUDES Kinect. In GB, X360 only took off when the 99pound bundles started to appear...). At the same time, PS3 typicaly sells for around $329-$349. Now if Sony can bearely make a profit with those prices, what makes you think MS profits on hardware?

d) online X360 charges are the key profit in the ED division


@Bolded:  Come on now krkohler, you are making the whole profit thing way to simplistic.  First MS does not sell to all of Europe at Christmas time prices.  Second, other parts of Europe do not get those specials and last, other countries make up the difference.  We all know what a lost leader is and we all understand how MS look to sell you services like XBL, XBLA games and assessories.  There is a hell of a lot more to make a profit then the actual console.  On another point why would anyone think it cost MS to build the 360 the same as it cost Sony to build the PS3.  No one knows how much profit MS is making on the 360 hardware but I am sure since MS has not adjusted the price for over 3 years, its a decent amount.