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Forums - Gaming Discussion - How long before Xbox Division is no longer integral to MS long term vision?

DirtyP2002 on 14 May 2014
nitekrawler1285 said:
DirtyP2002 said:
nitekrawler1285 said:
DirtyP2002 said:

you did not get the article you are quoting.

  implying the company could likely see costs exceed revenue in the near term. 

How do you interpret this?    


I had to explain this before.

http://gamrconnect.vgchartz.com/post.php?id=6002645

 

This is in German and I am too lazy to translate it again. I posted a much shorter version in english somewhere in this thread. try and find it.

So even the increase in cost of goods rises above the increased revenue  they are making money?  That doesn't sound right.  I thought they meant launch  mode as in spending heavily to get marketshare.  

Edit: After running that post through google translate I get it. Shrunk profits would lead me to believe even at the 500 mark they are selling the console at a low margin though sales of the other products namely the 360 helped.  I will ammend my Post. 

yeah, something like that.

In a word:

Xbox 360 highly profitable, Xbox One makes a small profit.
Due to the shift from 360 towards Xbox One, the cost of goods increases.

With the "launch activities" (getting SDKs out there, signing contracts with publishers / developers, increased marketing, getting distributors involved, etc.) it might happen that the results will be affected negatively over the next quarters. This is an investment for the whole generation though.

As we have seen this Q, the consumer devices division or whatever it is called still posted a profit.

The Xbox One is still profitable though. well at least it used to be at $499. It is probably breaking even right now or it will be sold with a tiny loss - just like the PS4.

 

The Xbox One is still sold at a profit though.



Imagine not having GamePass on your console...

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jnemesh on 17 July 2014
Proclus said:
Mr Puggsly said:

I think Xbox is integral to MS because its one of few things they have that appeals to younger consumers.

It can also be used as a vehicle to push other products. Such as Skype, MS's streaming music service, MS's TV programs, etc.

100% agree, it's very silly to say Xbox is any less integral to Microsoft than Playstation would be for Sony.

The only one of the big 3 that actually can't live without it's gaming segment is off course Nintendo, for Microsoft and Sony they're just integral to selling their other services/appealing to more markets.


No, it's not "silly" to say that Xbox is not integral to Microsoft!  ESPECIALLY after the comments Nadella just made YESTERDAY stating that "you shouldn't mistake Xbox as a core business"!

Sony, on the other hand, has repeatedly stated this year that Playstation IS not only profitable, but making more money than most of the rest of their company at the moment.  So Playstation IS essential to Sony.

If Microsoft dropped Xbox RIGHT NOW, the only thing the company as a whole would notice is more money in their bank accounts.  If Sony dropped PS right now, they would be hurting.

Your comments are in direct conflict with actual facts here, bub.



Puppyroach on 17 July 2014

Games have always been a big part of MS and the XBox brand is used for games across X1's, tablets, PC and smartphone so yeah, Xbox will be around for a looooong time.



jnemesh on 17 July 2014
Puppyroach said:
Games have always been a big part of MS and the XBox brand is used for games across X1's, tablets, PC and smartphone so yeah, Xbox will be around for a looooong time.


Unless you mean "Flight Simulator" or "Solitaire", games have NOT been a historically significant part of Microsoft's core EVER.  I don't know where you get that they are or have been?



torok on 17 July 2014
DirtyP2002 said:

The Xbox One is still profitable though. well at least it used to be at $499. It is probably breaking even right now or it will be sold with a tiny loss - just like the PS4.

 

The Xbox One is still sold at a profit though.


I don't think it's profitable anymore, but the loss is small. It was being sold at US$ 500 costing US$ 471 to make. Kinect was arount 75 bucks, so cost is down to US$ 396. Adding transport costs it isn't at profit alone, but a game and Live signature or two games are probably enough to get things even. PS4 is around US$ 15 cheaper to manufacture than X1, so things are similar here.



Bet with jetforcejiminy: PS4 will pass the Wii lifetime numbers.

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Puppyroach on 17 July 2014

Anyone doubting MS's commitment to gaming, might want to read this: http://en.m.wikipedia.org/wiki/List_of_microsoft_games

Games will never be part of their core in terms of revenue but they are a software company, and games are a way to tie consumers to software, and Xbox is their main gaming brand nowadays.



jnemesh on 17 July 2014
Puppyroach said:
Anyone doubting MS's commitment to gaming, might want to read this: http://en.m.wikipedia.org/wiki/List_of_microsoft_games

Games will never be part of their core in terms of revenue but they are a software company, and games are a way to tie consumers to software, and Xbox is their main gaming brand nowadays.


What???  So somehow, Halo customers will become Office customers?  That makes ZERO sense.

Also, your cute little list mentions games like "Minecraft" and "Spelunky", which last time I checked, weren't made or published by Microsoft!  (nor are they even exclusive to Microsoft platforms!)



Machiavellian on 17 July 2014
nitekrawler1285 said:

They can present the machine that way all they like.  The Xbox market see themselves as gamers.  That will be the use case for it.  There is even some argument to be made that trying to make it an entertainment console is to blame for it's current sales.  

I understand their goal. I think their execution is flawed.  If they think a 4-500 dollar entertainment box is gonna win the enterainment console connect to tv then I think they are even crazier than I thought.  Especially with so many competitors like Apple/Google/Amazon in the 35-100 range.  

I think the strategy you mentioned for the future makes sense. Their current one.... not so much.

The thing people have to understand is that usually a business like MS have 5 to 10 year plans for products.  The first iteration is not what will be the end result of such a product.  Yes, the X1 is 4 to 500 bones but the end result will be something totally different with a different price point.  The build of the X1 OS shows a forward thinking in design.  With everything running from a VM, it will be much easier for MS to upgrade the hardware and still keep compatibility even if they change to a different infrastructure.  This would also work in a cloud type of system like Playstation Now as MS could spin up those VMs easily over Azure.

I personally do not know MS gameplan but I can definitely say that they have one even if they had to scrap their first one and redo it.  The end result is not going to be what we see today and the X1 will be a totally different product in 2 years.



DogRemag on 17 July 2014

It never was.MS never took gaming serious.It was just an experiment used to feed their hungry ego as they thought being them would mean industry dominance.Even with the success of the 360 they never brought anything but Halo.The death of the DC is what gave them room anyway.



Machiavellian on 17 July 2014
jnemesh said:
Puppyroach said:
Games have always been a big part of MS and the XBox brand is used for games across X1's, tablets, PC and smartphone so yeah, Xbox will be around for a looooong time.


Unless you mean "Flight Simulator" or "Solitaire", games have NOT been a historically significant part of Microsoft's core EVER.  I don't know where you get that they are or have been?

You show your ignorance here.  MS gaming studio is older than Sony and they did make more games than just Flight Simulator.  Could you do a little more research before knee jerking a response.