Microsoft FY16 Q1: Xbox HW rev down 17%, live rev up 17%, XBL MAU users up 28% to 39M
- Thread starter Rymuth
- Start date
TBiddy
Member
Actually, we do. Logged in during the last month.
How many active members there is of a specific ecosystem is very relevant. Why wouldn't it be?
Captain Tuttle
Member
Stock is up 11% this morning, I don't think they're bothered too much
Bolivar687
Banned
It's very relevant but it's probably not as good a measurement of success as the number of units sold.
hodayathink
Member
Companies are "obliged" to put their overall profit and revenue numbers in their financial reports. Everything else is there to convince people to invest in the company. As long as MS reports how well that division is doing specifically, they don't have to say exactly how much hardware they've sold.
If you want another example of a company doing this, I don't think we've ever gotten a shipment number for the Apple Watch.
There are only 3 things abolutely required in a financial statement: an income statement stating the revenues and cost of running a business, a balance sheet detailing all the assets and liabilities of the company, and a cash flow statement listing all the cash and cash equivalents flowing in and out of the company.
get2sammyb
Member
Did no one create a thread on this? It seems like pretty big news to me:
Microsoft Will Focus Primarily On Xbox Live Usership, Not Console Shipments
Maybe I missed it?
Microsoft Will Focus Primarily On Xbox Live Usership, Not Console Shipments
Maybe I missed it?
Go ahead with the thread.
get2sammyb
Member
Got to rush off for work so sadly don't have time. Happy for someone else to, though, if they feel it's relevant.
In 2012 Sony switched from giving out hardware per platform to hardware per platform category (ie: all handhelds combined / all consoles combined). This was a pretty obvious move to try and hide/lessen the degree of Vita's failure. Now they've stopped releasing handheld figures entirely. They stopped giving out software figures consistently too back in 2007 when they switched from production shipments (manufactured) to just shipments (sold in), and even with hardware they didn't revise all totals (again likely to mask PS3's early failure). To this day we actually don't know exactly how many PSP or Vita have shipped ltd, and we don't know exact software ltd for any of Sony's systems from the past decade.
Also SCEA stopped PR releases around NPD during the PS3's long struggle sometime in 2007, and insiders have implied they're the reason NPD stopped releasing specific hardware figures at all a year or so later. Sony has a long established history of trying to obfuscate sales figures that paint them in a negative light. This is really less a case of Sonytoo and more a case of Sonyfirst.
And I mentioned Nintendo because the post I was responding to brought them up ("all three"). Nintendo's the only one who's been fully and consistently transparent with the hardware and software shipment figures so that post was dead wrong and worth pointing out.
That's true although those figures also gave out sold through figures for Sony/MS hardware. They may have been a case of Charttrack or NPD shutting it down since their propietary numbers started metriculating around the internet from there.
Those releases also weren't consistent, they usually came as part of Iwata's shareholder address and Q&A so it's more difficult to argue a clear IR policy change here like with Sony/MS.
Because after last generation Xbox unit was able to show serious growth. "Look, we got from 25M to 85M; just think what it's going to be after next generation!"
Also Microsofts head was in a different place back then. They saw game consoles as a trojan horse inot the living room market and they saw the living room market as the number one threat to their Windows empire (which turned out to be mobile). They expected a market to rival their Windows revenue back then, which is why they dumped billions into it. Now the console market for Microsoft doesn't make all that much sense.
From the The Verge interview with Satya Nadella.
"Nadella is playing a long game, and he's insisting Microsoft start by focusing on what he calls the "leading indicators of success" like customer engagement and usage, instead of the "lagging indicators" like profits and revenue. It's an entirely new culture at the company"
http://www.theverge.com/2015/10/7/9...della-interview-video-surface-book-windows-10
Stock is at a 15yr high after yesterdays earnings. Must be doing something right.
DeepEnigma
Gold Member
This.
That's not true though, we actually have data to support that game consoles are by far the most used devices for Netflix. Can it change in the future? Maybe, but that "war" is far from over, & at this point in time consoles are still winning.
DeepEnigma
Gold Member
The data is quickly shifting with "smart TV's", Apple TV, Amazon, etc, etc.
I think the consoles will switch to a more service based design eventually licensing their service to hardware makers (like Apple or Amazon) down the road, rather than their sole platform as the only way to play.
Shin-Ra
Junior Member
Because it doesn't tell you anything about how effective they are in monetising those accounts.
The apps on smart tvs are garbage. When that user experience changes someday than maybe you have a point. Just because it's there doesn't mean it's being used.
So the war hasn't been "won".
An all in one box that plays your AAA games & plays Netflix can be a far more attractive option, & I'd wager consoles would remain the leader in streaming services in the foreseeable future. You have to remember that consoles are usually bought per household, not per person, a kid buying a console that his dad can use to stream Netflix is more likely than an entire family with no single console in the house buys a streaming device, I suspect that's the reason consoles are the main platform for streaming services.
What data? Curious as I, perhaps naively, assumed tablets would be top for streaming.
Surface Phone, maybe?
Don't think there is much they can do until the app situation improves. They have a lot of good initiatives with universal apps and making it easy for developer to move android and ios code to windows without too much modifications, but they are pretty much starting from 1-2% market share. The new Lumia phones have excellent hardware specs, but the design is terrible. Also Lumia is a tarnished brand imo. They have used it for too many different and confusing model numbers and price points. There are rumors of a "Surface Phone" that is supposed to be from a build and design stand point on par with Apple and Samsung. Hope to see it sooner than later, because its defiantly a sore spot for them.
spatenfloot
Member
They should make an Xbox Live streaming app and release it on PS4. They could more than double their user base!
TBiddy
Member
That is true. But number of users in an ecosystem is very relevant.
In case you haven't noticed, the current war is about ecosystems. That's exactly the reason Microsoft decided to hand out Windows 10 for free. To keep people in their ecosystem.
So, like the ability to stream XB1 games from The Cloud (TM) to your PS4?
I know it's your money and all, but I've seen you talking about all the stuff you're selling and buying and selling and sold and will buy. Maybe sit on a product for a bit first. You'll save a lot more in the long run that way.
But I mean, it's not my business what you wanna do with your stuff, just sommit I noticed.
i'm close behind you. i've been with apple since 98, but i'm so sick of their shit. moving to another country really put it in good light for me. 16gb on my fucking iphone 6 wont cut it. it just wont cut it. i can't even load music, apps, and the shit i need for daily use without being forced to connect to a "cloud" , fucking absurd.
i'm giving it until the end of if this mac airs life, and then really contemplating a complete switch.
if the surface book really becomes what i think it may become i could actually see myself switching ecosystems, completely.
DeepEnigma
Gold Member
Oh I agree, I mostly was agreeing that it is no longer worth losing billions like MSFT and others seemed prepared to do a few years ago, considering tech moved so far as to have options on a USB stick.
And man Netflix (on a side note), outside of a few original programming is atrocious (content wise).
Unknown Soldier
Member
MS needed to do something with Windows Phone about 7 years ago now. There will be 2 billion Android and iOS devices in the world by late 2016 or early 2017. It's way too late for Windows Phone at this point.
MS doesn't want to sell a gaming console at loss to have people use it for Netflix.
Woo-Fu
Banned
The real problem is that the living room that they were fighting for no longer exists. Media is consumed everywhere now, on practically everything. The living room in this house is the least used room of all. Microsoft could have captured it and nobody would have noticed.
Yup exactly. I have 4 people in the house, there are 3 iPads, 2 Samsung tablets, 2 iPhones, 2 Sony Xperia phones, a blu ray player that has apps and can stream, 2 smart TVs that can stream, a PS3, 360 and PS4 that can stream, 3 laptops and a PC.
The idea of "owning the living room" via a box under the TV is ludicrous now. There's only one box in our house that remotely comes close that and it's the hub the all connect to for Internet.
Liabe Brave
Member
Okay, now explain why hardware installed base doesn't also show "users in an ecosystem". In fact, it's exactly the same kind of metric as what they've switched to. The new measure actually says less about revenue and profit than the old one, because at least hardware definitely brings in money; active users may not. (Shipped hardware also gives you the added data of the maximum addressable market.)
The MAU metric has a benefit too, in that it shows the active market. But note that this number will actually be much smaller than hardware sales...but they can pretend it isn't by combining all the devices it covers. That's actually the most obfuscatory thing here. The new measure is more a philosophical choice (see below), but lumping 360 and One and PC into one big bucket seems intentionally vague. It destroys an investor's ability to see which market segments are growing and which stagnant or in decline.
I think it'd be interesting if they reported ratios of MAU to hardware for each platform.
If this is meant to be as sweeping as the article suggests, it could have major implications. Leading indicators versus lagging indicators means "Let's try to identify how much our audience likes us" instead of "How big an audience is actually willing to pay for our product?" That's useful for marketing and brand management, but very much less so for engineers and designers. It points toward abandonment of hardware major-release software, and increased focus on advertising (both self and third parties).
Naah
http://boostonemobile.com/what-devices-are-used-most-interesting-internet-stats
Either you made that up, or if you are quoting slightly older data, then consoles are becoming irrelevant even more rapidly as media hubs.
It would have been even more if the Xbox didn't exist....
ArkhamFantasy
Member
Forgive my ignorance on these types of reports, but does it say if Xbox is profitable or not?
They bury Xbox performance with other product. Nobody but Microsoft knows.
ArkhamFantasy
Member
TBiddy
Member
Reporting "consoles shipped" is highly unreliable when it comes to show how many active users there are in an ecosystem.
It's not even remotely the same. It doesn't account for consoles in transit, consoles sitting in warehouses, consoles that have been scrapped or replaced due to warranty, consoles that have been bought and sold on craigslist.
And what about Xbox 360? How do you propose to measure the number of users by counting consoles shipped?
Liabe Brave
Member
Of course. But according to you, active users is not what Microsoft cares about:
Neither shipped hardware nor active users gives a focused look at the bottom line. But hardware is actually closer, because basically every unit shipped is revenue; individual active users might not represent any earnings at all.
The number of consoles in transit and storage is easily estimated, and as a percentage of the total shipments will shrink over time. Similarly, because retailers don't blindly overstock, secondhand sales will ultimately reduce shipments to match demand for new units.
The only real discrepancy will be in broken warranteed units (even those broken outside warranty won't matter). And the 360 is the only console in history where that number rose to a consequential level.
TBiddy
Member
That's not what I wrote. Please read it again. I wrote that Microsoft cares about revenue and profit. Active users equals revenue, since a portion of them subscribes to gold and another portion might be persuaded to subscribe to gold.
Using shipped consoles as a measurement for how many active users there are in any given ecosystem makes no sense. Especially when you have the actual number for how many active users there are.
Dyson Industries
Banned
Let's call it for what it is - an abandonment of the goalposts altogether. If there's a clearer indication that the battle for this generation has been decided, I'd like to see it.
Liabe Brave
Member
You're making my point for me. As you acknowledge, only a portion of active users equate to revenue. Whereas every single hardware unit shipped equates to revenue. So the new metric is even less directly tied to earnings than the old one, and neither of them have anything to say about profit. It's therefore abundantly clear Microsoft didn't make the switch because they care only about revenue and profit.
Of course not, but you're very confused if you think I said it does. MAU is not meaningless, but it has only a very indirect and loosely causal link to financial performance. Certainly without platform breakdown it says very little about the future potential of the Xbox business.
Well, no. Gold subscribers equals revenue, because they are the ones paying for use of the service.
On the other hand, install base also equals revenue, because a console owner is somebody to whom you can sell a game. Even if the console has never been connected to the network.
Active Live user doesn't really tell you much. It can be somebody who logs in because they want to watch Netflix. Or it can be somebody who checks out their gamerscore on a Windows browser. Or it can be anybody who fills a criterion that we are not aware of, because Microsoft has total liberty to measure the monthly active users however they choose to.
So no, active user does not equal revenue. At least not any better than those two metrics I mentioned.
TBiddy
Member
I think you're in the wrong topic. Or rather, responding to the wrong post, perhaps?
Again. You're quoting me, but I'm really not sure what exactly it is you're responding to?
I'm not sure what exactly it is you're arguing. I'm merely pointing out that using MAU as a metric is a good measurement on how much potential there is in a given ecosystem. They are, after all, primarily a software company. Microsoft has a pretty good idea on how many XB1s are currently installed around the world, but just as they do with all their other hardware, phones notwithstanding, they only share the total revenue and not any specific numbers.
Liabe Brave
Member
I'm responding to your initial claim (which I quoted above) that Microsoft stopped reporting hardware shipments because they only care about revenue and profit. I pointed out this can't be true because the new metric isn't any better at indicating revenue or profit (and in some ways is worse).
It seems you've realized you were wrong, though, since now you're just saying that MAU is a better indicator of engagement. I don't disagree with that claim.
Except that they didn't share total revenue for Xbox. The only information they provided was comparative percentage: software revenue up (both Minecraft and other titles), and hardware revenue down (both 360 and One).
It is literally impossible for an investor to tell how the Xbox business is doing. But it's now such a small part of Microsoft's overall business that no investors care.