Ryuu96 said:
LivncA_Dis3 said:
i think they would need to recover and recoup that 7.5 bil before purchasing another mega company, yeah they swimming in cash but they will wait for this 7.5 bil acquisition to be successful 1st before doing it again... buying another 7.5+ bill company without return of investment isnt like a simple walk into Mordor. |
They don't need to recover it anytime soon, they don't give a crap about that in the short term and likely won't take that into consideration at all when acquiring new studios. Zenimax was acquired entirely by cash on hand, cash sitting in a bank doing nothing except accumulating interest, Microsoft's main thinking will be "how can Zenimax benefit Game Pass" and "Will the revenue/profit from Zenimax be more than the interest on $7.5bn in a bank" the answer to that is likely yes. This is the same conversations had with Mojang and everyone questioning how they'd instantly make that money back when that likely wasn't on Microsoft's mind at all, Mojang was acquired at the time with oversees cash which they couldn't bring to America as it would be taxed to shit, it's better to spend money to make even more money. Then there's also inflation that is about to hit and you don't want massive amounts of cash sitting in a bank doing nothing when inflation hits, that is why they've been splashing the cash lately, whether on Zenimax for $7.5bn or Naunce for $20bn or their attempted acquisitions of Discord for $12bn and Pinterest for $51bn. Microsoft ain't got no worry about cash when they make almost $15bn in cold hard profits every 3 months. Linkedin/Github were both loss leading operations for many years and Linkedin cost like triple the amount of Zenimax, not everything is an instant "how will we make this money back?!" |
Thats not how treasuries work LMAO
Apple isn't sitting there worried that there near $200B hoard of cash is going to inflate due to some forum posters inflation fear mongering. Cash isn't held just as USD but through money market funds, through US treasury bills etc etc and they could care less about those assets inflating.
The reason MS is pressured to buy is because they have massive margins and yet investors are not seeing reflected in dividends. No one is similarly pressuring Apple because Apple have a ton of new ventures that they are investing in, from AR web standards, AR glasses, VR headsets, self driving cars, new chips, wearable health, payment solutions etc
MS on the other hand has very few big consumer brands unlike Apple, Facebook, Amazon and Google. They are mostly a B2B company (Windows, Azure, 365), Bing, which has single digit marketshare and gets money from ads, even LinkedIn gets most of its money from recruiters/pubs.
Without Xbox, their next biggest consumer brand is Surface.......the CEO already mentioned this, wanting to buy out communities because MS does not have that consumer band allegiance that even companies like Sony or Playstation has. They tried buying TikTok, failed, they tried buying Discord, failed, they tried buying Pinterest, failed.
MS is not going to let a loss leading business, like Xbox, continue if its clear that it has been pigeonholed to tiny marketshare. Right now they have abandoned the platform business model as Playstation have dominated them. Now they are trying the service Gamepass model. If that fails, who knows what they'll try next.