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[jcorb]

I’m not being facetious, I likely *am* missing something. If Xbox’s revenue is increasing year over year, then isn’t that kind of objectively doing pretty well?

As far as I can tell, it seems like the decision to bring their games to other platforms, while obviously lowers demand for their own console, actually seems like it’s a pretty smart play? It would be kind of depressing to see them leave the console market, but if the company is still seeing record(?) profits, then it certainly doesn’t seem to be necessary.

What am I missing?

 

[Cakeboxer]

Spending billions on aquisitions = more revenue
Revenue =/ profit
No (significant) Game Pass growth
Console sales no too bad, but compared to Sony or Nintendo absolute ass

It's still possible that they dominate the gaming market in 10-20 years, but not with any hardware.

 

[cireza]

It is more the Xbox hardware situation that is unclear. Business wise they are most certainly reaching their targets.

 

[lh032]

revenue is not net profit.

 

[Hookshot]

King. Candy crush will probably pay for the deal before Cod does

 

[Mownoc]

Xbox Consoles are struggling. As a third party software publisher they're probably doing fine. Though remember high revenue doesn't necessarily mean high profit.

 

[kruis]

Xbox revenue is increasing because they bought ActivisionBlizzard for $68.7 billion and now can add CoD/WoW revenues to their tally.

 

[BlackTron]

It is more the Xbox hardware situation that is unclear. Business wise they are most certainly reaching their targets.

The program ended man.

 

[nowhat]

What am I missing?

The fact that the increased revenue (which, as already pointed out, doesn't equal profits) pretty much equals Activision-Blizzard-King revenue pre-acquisition.

 

[Lunarorbit]

King. Candy crush will probably pay for the deal before Cod does

Yeah I also think it's gotta be their acquisitions showing up on their ledgers

 

[Kotaro]

I bet you their spending is much bigger than their revenue. Those acquisitions cost tens of billions, and now they are responsible for tens of thousands Bethesda and Activision employees

They get by because they have a rich daddy

 

[RetroGamingUK]

The revenue is up due to the purchase of Activision automatically giving them more business. Profit is way down as a result though.

Next year there won’t be a revenue bump unless they ancquire another publisher, revenue may actually drop.

 

[Rentahamster]

Revenue numbers alone don't include the money you spent trying to acquire those new sources of revenue.

 

[cireza]

The program ended man.

Don't forget to renew my Gold subscription. Thanks.

 

[Kenneth Haight]

Commercially rich, creatively bankrupt

 

[BlackTron]

Don't forget to renew my Gold subscription. Thanks.

First you must prove yourself in a trial by combat...to the death.

Seriously though, we already know that Xbox, by their own design planning and intention, does not make money on hardware. I don't know where they stand now, but I think they lost about $200 per Series X beginning of gen. Between lowered costs and murkiness of Series S, by now I'll be generous and simply say Xbox breaks even on hardware.

I don't understand how Xbox ever had "profit goals" based specifically on hardware sales in the absence of games and services. Check your logic.

 

[Mattyp]

I bet you their spending is much bigger than their revenue. Those acquisitions cost tens of billions, and now they are responsible for tens of thousands Bethesda and Activision employees

They get by because they have a rich daddy

The revenue is up due to the purchase of Activision automatically giving them more business. Profit is way down as a result though.

Next year there won’t be a revenue bump unless they ancquire another publisher, revenue may actually drop.

Revenue numbers alone don't include the money you spent trying to acquire those new sources of revenue.

Can we learn to basic finance before getting 350 pages into this thread and I’ll explain it for the 50th time since people missed it in high school and keep it on the first page.

An acquisition is not a sunk loss, they now have that asset worth $80 billion that they can dispose of for $80 billion or more in the future due to inflation, the revenue it brings in paying down that outlay, normal growth yadda yadda.

Exact same as Minecraft when people said they where nuts, they could sell off Minecraft tomorrow for $20 billion they own that asset, that asset continues to bring in excess I would say of a billion a year.

Activision will now bring in $X amount a year, quicker than the interest their cash reserves of that $80 billion was bringing in, and with that brings ‘growth’ of the company. CoD will do record numbers this year even with being on game pass and drive sales of their subscription service also bringing in growth.

Consoles make fuck all in revenue it’s all about the software and DLC, Microsoft know that so selling 1/4 the consoles of Nintendo they make more still from their gaming division.

I’ll enjoy the 100+ quotes ahead of time, cheers cunts.

So yes Op, you’re not missing anything and they’re doing completely fine they’ll never match Sony for consoles sold it doesn’t matter.

 

[Woopah]

Hardware sales are seeing big declines.

Xbox gaming revenue grew 44%, but without ABK it would have declined 4%.

 

[Rentahamster]

An acquisition is not a sunk loss, they now have that asset worth $80 billion that they can dispose of for $80 billion or more in the future due to inflation, the revenue it brings in paying down that outlay, normal growth yadda yadda.

Exact same as Minecraft when people said they where nuts, they could sell off Minecraft tomorrow for $20 billion they own that asset, that asset continues to bring in excess I would say of a billion a year.

Activision will now bring in $X amount a year, quicker than the interest their cash reserves of that $80 billion was bringing in, and with that brings ‘growth’ of the company. CoD will do record numbers this year even with being on game pass and drive sales of their subscription service also bringing in growth.

What part of my statement precludes any of these possible outcomes?

 

[Skifi28]

500 billion in revenue doesn't mean much if you spent 600 billion to get it.

 

[Woopah]

Can we learn to basic finance before getting 350 pages into this thread and I’ll explain it for the 50th time since people missed it in high school and keep it on the first page.

An acquisition is not a sunk loss, they now have that asset worth $80 billion that they can dispose of for $80 billion or more in the future due to inflation, the revenue it brings in paying down that outlay, normal growth yadda yadda.

Exact same as Minecraft when people said they where nuts, they could sell off Minecraft tomorrow for $20 billion they own that asset, that asset continues to bring in excess I would say of a billion a year.

Activision will now bring in $X amount a year, quicker than the interest their cash reserves of that $80 billion was bringing in, and with that brings ‘growth’ of the company. CoD will do record numbers this year even with being on game pass and drive sales of their subscription service also bringing in growth.

Consoles make fuck all in revenue it’s all about the software and DLC, Microsoft know that so selling 1/4 the consoles of Nintendo they make more still from their gaming division.

I’ll enjoy the 100+ quotes ahead of time, cheers cunts.

So yes Op, you’re not missing anything and they’re doing completely fine they’ll never match Sony for consoles sold it doesn’t matter.

This. When companies make an acquisition, it's not like cash just disappearing from your bank account.


Though I don't think we can safely say they make more in profit than Nintendo or Sony though. Potentially more revenue than Nintendo, but it's tricky with the different accounting practices.

 

[pasterpl]

Xbox revenue is increasing because they bought ActivisionBlizzard for $68.7 billion and now can add CoD/WoW revenues to their tally.

The fact that the increased revenue (which, as already pointed out, doesn't equal profits) pretty much equals Activision-Blizzard-King revenue pre-acquisition.

People saying this forget that they also have gained an asset worth almost 70bn usd

Commercially rich, creatively bankrupted

I don’t see Sony releasing games like flight sim, pentiment, grounded, avowed, south of midnight, hi-fi rush etc. Or successful gaas like sea of thieves. See lots more creativity on green side.

Xbox Consoles are struggling. As a third party software publisher they're probably doing fine. Though remember high revenue doesn't necessarily mean high profit.

Probably will end up with similar sells like Xbox one did, unless they start next gen sooner as some are predicting

 

[RoadHazard]

Can we learn to basic finance before getting 350 pages into this thread and I’ll explain it for the 50th time since people missed it in high school and keep it on the first page.

An acquisition is not a sunk loss, they now have that asset worth $80 billion that they can dispose of for $80 billion or more in the future due to inflation, the revenue it brings in paying down that outlay, normal growth yadda yadda.

Exact same as Minecraft when people said they where nuts, they could sell off Minecraft tomorrow for $20 billion they own that asset, that asset continues to bring in excess I would say of a billion a year.

Activision will now bring in $X amount a year, quicker than the interest their cash reserves of that $80 billion was bringing in, and with that brings ‘growth’ of the company. CoD will do record numbers this year even with being on game pass and drive sales of their subscription service also bringing in growth.

Consoles make fuck all in revenue it’s all about the software and DLC, Microsoft know that so selling 1/4 the consoles of Nintendo they make more still from their gaming division.

I’ll enjoy the 100+ quotes ahead of time, cheers cunts.

So yes Op, you’re not missing anything and they’re doing completely fine they’ll never match Sony for consoles sold it doesn’t matter.

It does matter though, because what platform holders normally make the most money from is not selling their own games, but their cut from all 3rd party sales on that platform/ecosystem. MS seems to be largely giving up on that and instead becoming a multiplatform publisher.

 

[nowhat]

So yes Op, you’re not missing anything and they’re doing completely fine they’ll never match Sony for consoles sold it doesn’t matter.

The program ended man.

 

[Woopah]

500 billion in revenue doesn't mean much if you spent 600 billion to get it.

If you add $600 billion of assets to your books, and those asset are generating an additional $500 billion in revenue, then that means a heck of a lot.

 

[nowhat]

People saying this forget that they also have gained an asset worth almost 70bn usd

Have they, really? It's what MS paid, sure. But is that the correct valuation?

 

[pasterpl]

Have they, really? It's what MS paid, sure. But is that the correct valuation?

You are right, it was a bit more before MS acquisition https://stockanalysis.com/stocks/atvi/statistics/

 

[Chukhopops]

Can we learn to basic finance before getting 350 pages into this thread and I’ll explain it for the 50th time since people missed it in high school and keep it on the first page.

An acquisition is not a sunk loss, they now have that asset worth $80 billion that they can dispose of for $80 billion or more in the future due to inflation, the revenue it brings in paying down that outlay, normal growth yadda yadda.

Exact same as Minecraft when people said they where nuts, they could sell off Minecraft tomorrow for $20 billion they own that asset, that asset continues to bring in excess I would say of a billion a year.

Activision will now bring in $X amount a year, quicker than the interest their cash reserves of that $80 billion was bringing in, and with that brings ‘growth’ of the company. CoD will do record numbers this year even with being on game pass and drive sales of their subscription service also bringing in growth.

Consoles make fuck all in revenue it’s all about the software and DLC, Microsoft know that so selling 1/4 the consoles of Nintendo they make more still from their gaming division.

I’ll enjoy the 100+ quotes ahead of time, cheers cunts.

So yes Op, you’re not missing anything and they’re doing completely fine they’ll never match Sony for consoles sold it doesn’t matter.

You’re 100% right but it’s hopeless, there was a 10,000 pages ABK thread and people still think that acquisition costs somehow go into a company’s P&L.

And you even have people thinking Xbox profit rate will go down with the ABK acquisition when ABK´s business is massively more profitable (as a % of revenue) than MS’.

 

[Woopah]

I don’t see Sony releasing games like flight sim, pentiment, grounded, avowed, south of midnight, hi-fi rush etc. Or successful gaas like sea of thieves. See lots more creativity on green side.

Helldiver 2 is a successful GAAS. Plus they are also publishing new IP like Stellar Blade, Rise of the Ronin, Returnal and Lost Souls Aside.

 

[ProtoByte]

When accounting for the fact that they've stacked Activision's financials (including costs) onto their own, they're actually decreasing in revenue.

Console sales are lagging behind Xbox One, which was the most failed console this side of the Wii U.

Gamepass subscriptions, accounting for the switch from Xbox Live Gold to Game Pass Core, went down.

It's all around failure over there.

 

[BlackTron]

Yeah it's true MS owns this asset now, but it's not worth a static 70bn because that's what they paid. It's only worth as much as the next buyer is willing to pay if they chose to liquidate it.

This is especially true given the value of said asset could begin depreciating the moment they start controlling it.

 

[pasterpl]

Helldiver 2 is a successful GAAS. Plus they are also publishing new IP like Stellar Blade, Rise of the Ronin, Returnal and Lost Souls Aside.

We are talking about creativity not new IPs - there is a difference. That was post I was responding to.

 

[Woopah]

We are talking about creativity not new IPs - there is a difference. That was post I was responding to.

What makes Flight Sim or Avowed more creative than the games I listed?

 

[Mr.Phoenix]

People saying this forget that they also have gained an asset worth almost 70bn usd

Think about this...

I don’t see Sony releasing games like flight sim, pentiment, grounded, avowed, south of midnight, hi-fi rush etc. Or successful gaas like sea of thieves. See lots more creativity on green side.

I am shocked.

Probably will end up with similar sells like Xbox one did, unless they start next gen sooner as some are predicting

They are at ~28M... their hardware sales have just not slowed down, they are almost non-existent. Being outsold 4-1 by Playstation in 2024 so far. If Sony manages 18M this year, they manage at best 5M. And its going to get worse... not a chance of getting better. But you somehow expect them to do another 24M in the next 3-4 years?

Ok.

We are talking about creativity not new IPs - there is a difference. That was post I was responding to.

The fuck am I reading this morning?

 

[TheRaidenPT]

Don't forget they bought Activision as well which is pumping those numbers up.

 

[GoldenEye98]

Not missing anything imo. Most of the takes on Xbox is console warring that lacks any nuance.

 

[TheGodfather07]

Your missing the fact that xbox series hardware sales have hit a brick wall. We're talking like only 3m sold in an entire year. They have no markstshare left.

 

[Unknown Soldier]

The increase in revenue is entirely from acquiring Activision Blizzard and treating ABK's revenue as Xbox's

The actual revenue from Xbox division ex-ABK has been dramatically declining

Microsoft is a publicly traded company, you can look at their quarterly earnings reports yourself

 

[twilo99]

It's all around failure over there.

It certainly must be all over.

 

[cireza]

I don't understand how Xbox ever had "profit goals" based specifically on hardware sales in the absence of games and services. Check your logic.

How can you conclude that I meant anything even remotely close to what you imply here ? I don't get it.

I simply stated that Xbox hardware situation is unclear. To me, this seems like a very reasonable thing to say, and probably everybody can agree with this.
And overall the gaming division is making money, this also sound reasonable and factual, independently of the hardware future.

So what's the issue ?

 

[Gojiira]

I’m not being facetious, I likely *am* missing something. If Xbox’s revenue is increasing year over year, then isn’t that kind of objectively doing pretty well?

As far as I can tell, it seems like the decision to bring their games to other platforms, while obviously lowers demand for their own console, actually seems like it’s a pretty smart play? It would be kind of depressing to see them leave the console market, but if the company is still seeing record(?) profits, then it certainly doesn’t seem to be necessary.

What am I missing?

Revenue is not Profit.
Im guessing you missed the THOUSANDS they fired this year alone. Great way of making it seem like you made more money…

 

[Mr.Phoenix]

Not missing anything imo. Most of the takes on Xbox is console warring that lacks any nuance.

So Xbox hardware sales slowing to a halt, gamepass subs stagnating for the last 3 years and them now needing to release their games on their biggest rivals platform...

lacks nuance?

Denial is an art form.

For what it's worth, everything I just mentioned doesn't mean Xbox cannot go on to do well. They will just look nothing like what they look now. I still believe Xbox has the capacity to become the largest third-party publisher on the planet.... if they play their cards right that is.

 

[Ebrietas]

Yeah it's true MS owns this asset now, but it's not worth a static 70bn because that's what they paid. It's only worth as much as the next buyer is willing to pay if they chose to liquidate it.

This is especially true given the value of said asset could begin depreciating the moment they start controlling it.

I had to roll my eyes at the other poster saying they could sell activision for 80 billion whenever they wanted. That’s unrealistic even if you assume MS somehow doesn’t run the business into the ground (big if).

They basically gave up on the idea of ever being a major platform holder in favor of being a big third party. The latter business model is naturally lower revenue and higher risk but given the pathetic state of their platform business it results in growth for the company. For all practical purposes it is activision who acquired xbox and not the other way around.

 

[Ozriel]

The fact that the increased revenue (which, as already pointed out, doesn't equal profits) pretty much equals Activision-Blizzard-King revenue pre-acquisition.

And? Growth by acquisition is a concept that’s hundreds of years old by now.

Yeah it's true MS owns this asset now, but it's not worth a static 70bn because that's what they paid. It's only worth as much as the next buyer is willing to pay if they chose to liquidate it.

This is especially true given the value of said asset could begin depreciating the moment they start controlling it.

They’ve invested about this same level in AI stuff that’s yielding much less profit than ABK.

 

[Sony]

Their revenue is up because of ActiBliz. They have targets for how much their revenue should grow. It's a 70bn investment and they will compare that to other investments' ROI.

 

[pasterpl]

What makes Flight Sim or Avowed more creative than the games I listed?

Games you have listed are very similar to other games on the market eg. RoR vs GoT or Nioh. Flight Sim is enthusiast game and risky project, and level of innovation (technical) is crazy in 2020 and now in 2024 versions. Avowed is nothing ground breaking I agree, but MS got more new IPs that we know of compared to Sony.

gamepass subs stagnating for the last 3 years

So much FUD https://www.statista.com/statistics/1276183/xbox-game-pass-subscriber-count-global/

Phil Spencer says Game Pass now has 34m "fully paid" subscribers

Microsoft has shared updated Game Pass membership figures for the first time since January 2022, saying the on-demand g…

www.eurogamer.net

 

[Mr Moose]

I don’t see Sony releasing games like flight sim, pentiment, grounded, avowed, south of midnight, hi-fi rush etc. Or successful gaas like sea of thieves. See lots more creativity on green side.

I laughed at this part.

 

[BlackTron]

How can you conclude that I meant anything even remotely close to what you imply here ? I don't get it.

I simply stated that Xbox hardware situation is unclear. To me, this seems like a very reasonable thing to say, and probably everybody can agree with this.
And overall the gaming division is making money, this also sound reasonable and factual, independently of the hardware future.

So what's the issue ?

Untrue, you did more than state that hardware situation is unclear. You also stated the bolded:

It is more the Xbox hardware situation that is unclear. Business wise they are most certainly reaching their targets.

You would need to be rather optimistic to say that Xbox is meeting the internal targets, which they don't disclose, and obfuscate by mixing Xbox's performance in with other numbers. We just had a thread about this but I can't find it so here's a random article.

That pressure has weighed on Xbox as Microsoft's board of directors and top C-suite executives scrutinize quarterly results even more than they had before. So far, the results have been impressive; Xbox may not be growing significantly on its own without Activision, but with Activision, Xbox delivered a record-breaking $21.52 billion revenue in FY24. It's unknown whether or not Xbox is meeting Microsoft's internal projections, but new reports indicate that these metrics are difficult to achieve.

Sources close to Xbox have told Bloomberg that these revenue and profit targets are challenging. We know revenues, but profits remain a mystery. The closest figures we've been able to extrapolate relate to Xbox's accountability margin, which may be some measure of internal profits...albeit defined in a potentially different way than, say, operating profits.

Microsoft only reports profits of its individual business units. Xbox belongs to a business unit called More Personal Computing, and as such, profits from the games division are never discussed in quarterly and yearly briefings.

Xbox faces 'challenging' revenue and profit targets following $70 billion Activision buyout

Microsoft's board of directors, CEO, and CFO have high expectations for Xbox to deliver specific revenue and profit targets after the Activision buyout.

www.tweaktown.com

Everyone but like 3 people on the board have known for years Xbox has been running on daddy money. Sell console at loss, spend money on content, then sell no games and probably half your subs paid for one dollar until bailing because the best new game is fucking Pentiment. You have to make a better case than "this sounds reasonable and factual, everybody agrees".

 

[cireza]

You would need to be rather optimistic to say that Xbox is meeting the internal targets, which they don't disclose, and obfuscate by mixing Xbox's performance in with other numbers. We just had a thread about this but I can't find it so here's a random article.

I remember reading here that the gaming division was perfectly fine overall including Activision, and this is what I meant when I said that their business was fine.

So I have no clue what you are talking about. And I don't care, by the way.

 

[vaibhavpisal]

Yeah it's true MS owns this asset now, but it's not worth a static 70bn because that's what they paid. It's only worth as much as the next buyer is willing to pay if they chose to liquidate it.

This is especially true given the value of said asset could begin depreciating the moment they start controlling it.

Its gonna go sky high under them.

Just like Rare and Minecraft.