Norris2k said:
It's not just about having a lot of money. For Sony, the Playstation was one of the most profitable business, and after quite a fail on the PS3 launch and product, they had to take the loss to save the PS3 and continue this business. They don't have so many profitable divisions, and they can't really quickly drop the unprofitable divisions. Their PS strategy make sense, and the PS4 proves it to be somewhat successful. For Microsoft, they are getting a lot of money from a lot of divisions, they are very profitable, and there is this one single dark little division, the XBox division, that made them loose 5 billions $. After 14 years dealing with it, it happens any hope they had for a very profitable xbox one swimming in its blue ocean are lost. And you can tell how much they wanted a solid profit on it just by watching the expensive launch price : 500$. And again, their strategy makes sense. You don't build a successful and profitable company like Microsoft just by thinking "our pocket are deep, let's bleed money forever on some division". They have a very tight profit management, and they can drop any division very quickly. So, MS is a very profitable company, but it doesn't mean they give any division access to eat a part of this large profit. They could, but they should not, and they are not : tight cost management (xbox memory, number of exclusive, number of internal studio), and high launch price (again, 500$). If you were in charge, perhaps you would say something like "we are MS, we have so much money, let's loose 2 billions $ to make the launch price 400$ and have 5 more AAA games at launch". But that's not how it works. |
Thanks for the explanation and not being a total jerk like the last guy. I see your point but in my opinion they need to get this put in check ASAP or they lose this division. Your right they have lost 5 billion in video games. But the last 7 years they have been very successful. The first 7 years they knew they were going to lose out just to get a foot in the door. If they invest to make xbox one work it might put them in the red for a year or too but they can be back into the black again. There not just going to say "well last 7 years we did good in the black but that initial investment we haven't paid off yet and not doing good this year lets just let it go under and not try". Look at Nintendo they didn't say we just lost our ads this year, let's give up. Instead they made money the following year.
Microsoft will invest in xbox one even if it cost them a bit this year and they may make it back. It's up to the investors and knowing them they will not give up. Look at Playstation in 2006-2010 they lost about 6 billion. They didn't say " O were bleeding money shut down" no they invested and now Playstation is doing fine (Sony as whole differnt story)
