Xbox boss: Microsoft won't sell us off

#51Cosmic_DiabeticPosted 4/12/2014 2:36:02 PM
SuperSuikoden posted...
"Xbox is maybe the most relevant brand that Microsoft has with consumers today," Spencer told Edge Magazine, adding that the Xbox division is "an asset that's extremely valuable, and since our future ambition is to grow our consumer relevance, Xbox has to be at the center of that."


so is he just pretending Windows doesn't exist?
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#52SabramPosted 4/12/2014 3:09:00 PM
Sin_Angelus_ posted...
Sabram posted...
The PS4 was profitable from the get go, but the margin was pretty small, like $17 or something. The Xbone initially had a larger profit margin with its higher price, but with the cut and the free game now, it's a large loss on each console for MS.


http://qz.com/148360/record-sales-will-not-be-enough-for-sonys-ps4/

"Estimates are that the PS4, priced at $399, sells at a $60 loss per unit."


Alright, i was mistaken (possibly) on that. Not sure where i got the $17 profit per unit number.

Even if that's true though, right now MS has cut their profit-per-unit by about $110 by dropping the price $50 and including Titanfall. I know MS doesnt get all the money from each copy of Titanfall, but I imagine they get a good portion of it. They would have had to pay EA for each copy bundled, which would include Respawn's cut as well, so they would basically be paying the full amount per game.

In any case, my point I suppose is that MS STARTED more profitable than Sony on their 8th gen console, but they sure as hell arent now. After MS has dropped about $2 billion on exclusives and advertising for the Xbone, they're now losing about $100 per system as well, so with current sales (post deal) they've already lost another good chunk of money.

Add that into the huge losses the original Xbox had, as well as large losses from thr 360, and the Xbox division is still majorly in the red.
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#53TiredofhearinguPosted 4/12/2014 4:00:12 PM
Ok... not trying to be a dick with this but.... This is exactly how boss's talk before massive lays offs... This is how mine talked before the lay offs where I used to work. The tone, the careful wording.. all of it.. This is a case of no news would be better news... Because this guy just made it obvious that badness is coming to xbox employees...
#54TheGam3925Posted 4/12/2014 4:05:43 PM
Cosmic_Diabetic posted...
SuperSuikoden posted...
"Xbox is maybe the most relevant brand that Microsoft has with consumers today," Spencer told Edge Magazine, adding that the Xbox division is "an asset that's extremely valuable, and since our future ambition is to grow our consumer relevance, Xbox has to be at the center of that."


so is he just pretending Windows doesn't exist?


Probably a good idea. I have to use Windows at work, it's terrible.
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#55teh1337gosuPosted 4/12/2014 4:06:53 PM
Tiredofhearingu posted...
Ok... not trying to be a dick with this but.... This is exactly how boss's talk before massive lays offs... This is how mine talked before the lay offs where I used to work. The tone, the careful wording.. all of it.. This is a case of no news would be better news... Because this guy just made it obvious that badness is coming to xbox employees...


I worked for a large company and you are EXACTLY right, this type of tone is what they spin before mass layoffs. Still I'm sure Xbox isn't losing them money in the end.
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#56Shinobi120Posted 4/12/2014 4:32:48 PM(edited)
teh1337gosu posted...
Tiredofhearingu posted...
Ok... not trying to be a dick with this but.... This is exactly how boss's talk before massive lays offs... This is how mine talked before the lay offs where I used to work. The tone, the careful wording.. all of it.. This is a case of no news would be better news... Because this guy just made it obvious that badness is coming to xbox employees...


I worked for a large company and you are EXACTLY right, this type of tone is what they spin before mass layoffs. Still I'm sure Xbox isn't losing them money in the end.


These. Of course Microsoft's not gonna flat out announce layoffs, or shutting down divisions, etc. People need to learn what PR speak is.
#57Sin_Angelus_Posted 4/12/2014 8:55:02 PM(edited)
Sabram posted...
Add that into the huge losses the original Xbox had, as well as large losses from thr 360, and the Xbox division is still majorly in the red.


I don't think so. First of all, X1 started off making a profit off it's consoles, as you stated. Secondly, Titanfall doesn't cost $60 to make, more like $27 after marketing costs and all. So they're really only losing about $17 as far as the game goes. Lastly, as I said before, MS is making record profit this year:

http://www.extremetech.com/computing/175350-microsoft-delivers-record-revenue-profits-due-to-strong-xbox-windows-phone-and-commercial-sales

... partly due to them starting to make a profit on 360s and the solid launch of X1. So they can afford to sell X1 at a loss now in order to try to gain some market shares back from Sony, and since the X1 has a great attach rate for games, where they make most of their gaming division money anyway. I think they'll be fine, and I hope Sony continues to do well too, since that competition will only benefit us consumers.
#58SabramPosted 4/12/2014 11:05:53 PM
Sin_Angelus_ posted...
Sabram posted...
Add that into the huge losses the original Xbox had, as well as large losses from thr 360, and the Xbox division is still majorly in the red.


I don't think so. First of all, X1 started off making a profit off it's consoles, as you stated. Secondly, Titanfall doesn't cost $60 to make, more like $27 after marketing costs and all. So they're really only losing about $17 as far as the game goes. Lastly, as I said before, MS is making record profit this year:

http://www.extremetech.com/computing/175350-microsoft-delivers-record-revenue-profits-due-to-strong-xbox-windows-phone-and-commercial-sales

... partly due to them starting to make a profit on 360s and the solid launch of X1. So they can afford to sell X1 at a loss now in order to try to gain some market shares back from Sony, and since the X1 has a great attach rate for games, where they make most of their gaming division money anyway. I think they'll be fine, and I hope Sony continues to do well too, since that competition will only benefit us consumers.


On the consumer side of things, Microsoft continues to weaken. While the Xbox One and Xbox 360 sold 3.9 million and 3.5 million units respectively, gross margins for the Devices & Consumer Hardware division were down 46% to $0.4 billion. Total Surface revenue doubled to $0.89 billion (probably selling around 1 million Surface tablets), but costs also spiked to $0.93 billion (probably due to marketing and slim margins on the Surface tablets). The PC market continues to collapse, taking sales of Windows with it. (Read: PS4 sells 4.2 million units in 2013, beating the Xbox One comfortably.)

From the article you linked. I wouldnt feel too terribly comfortable with the Xbox division being out of harm's way yet. With gross margins at only 0.4 billion (remember this is with 360 sales slipping every month, and before the "price drop" of the Xbone and Titanfall freebie) That leaves them still under for that division for the year based on the stated $2 billion they've spent on securing exclusives and advertising. Not to mention R&D costs (rumored they spent $100mil on the controller and $200mil on the Kinect 2)

So yeah, the entire company may have record profits, but their consumer electronics are flagging even more behind.
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#59Sin_Angelus_Posted 4/13/2014 8:55:00 PM
Sabram posted...
So yeah, the entire company may have record profits, but their consumer electronics are flagging even more behind.


Not too bad though, read a bit further:

On the consumer side of things, Microsoft might eventually make some good money from Surface, Xbox, and Windows Phone, but at this point I think its pretty certain that were not going to see a massive billions-of-dollars-in-profit breakout hit like the iPad or iPhone. At best, Microsoft can expect some steady revenue and profit growth from the Xbox and if it plays its cards right, 2014 might finally be the year that Surface and Windows Phone turn a profit.

If anything, they'll cut Surface and/or Windows phone first. And again, all the investing they've done in the X1, controllers, Kinect, and exclusives, is just further proof they'll stick with it for awhile. As long as they don't have another RROD fiasco, which I think they're pretty much clear of at this point, Xbox will start making a decent profit eventually.
#60fanboymaycryPosted 4/14/2014 3:28:09 PM
Sin_Angelus_ posted...
Sabram posted...
The PS4 was profitable from the get go, but the margin was pretty small, like $17 or something. The Xbone initially had a larger profit margin with its higher price, but with the cut and the free game now, it's a large loss on each console for MS.


http://qz.com/148360/record-sales-will-not-be-enough-for-sonys-ps4/

"Estimates are that the PS4, priced at $399, sells at a $60 loss per unit."


Thanks Sin_Angelus, for that direct quote. Some people (such as the guy you replied to) need to do better research.