Astray
Member
Microsoft is running a business with zero profit so your entire rhetoric is pointless here.
Xbox Series generation helped make $80.8 billion for Microsoft
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Mattyp
Not the YouTuber
What business are they running with zero profit? I'll need to see that in the quarterly's I missed it in the last share holders meeting
Astray
Member
OK, name the Gaming divisions profits.What business are they running with zero profit? I'll need to see that in the quarterly's I missed it in the last share holders meeting
Mattyp
Not the YouTuber
I don't need to, you claimed it didn't make a profit so I'm waiting for the receipts on that statement.
So you believe the xbox division costs more than $22BILLION a year to run?
ChorizoPicozo
Member
I don't understand what Phil wins by pushing this damage control and spin. it's like no one cares when we see the ship sinking in real time, in 4K, HDR at 120 Hz with raytracing.
nowhat
Member
Not going to lie. The other day I was walking outside at night, there were lovely reflections coming off the lake. And I found myself tilting my head back and forth, coming to the realization that "yup, no SSR there, that's ray tracing".
...and then I realized I probably don't go outside often enough.
Horseganador
Member
The press has been talking about damage control at full blast for a couple of days now since the impressive PS5 stats.
John Wick
Member
Why?Damn, makes Sony's revenues seem like chump change. Sony bros, I don't feel so good
MS spent 80 billion acquiring AB. There goes that revenue.
Shawn Layton said that Game Pass requires $5 BILLION a month to run. So they're obviously bleeding billions of dollars and will be out of business by Wednesday.
500M subs at $10 a month would be $5 billion a month.
ZehDon
Member
These posts contradict each other.
In all likelihood, I imagine they're making money, but not a lot, and certainly not enough money to qualify as a solid growth opportunity for shareholder investment. Hence why they remain mum on the matter.
I mean, we have the ballpark from Microsoft themselves, and they're not allow to lie about their revenue and expenses, so I tend to believe them.
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ChorizoPicozo
Member
you can look at play station's profits and then ask yourself:
if Playstation has these kind of profits when:
1. the are making money with every console sold
2. they make 30% of every transaction
3. their big games are making between 700 hundred million to 1B in revenue
How can Xbox be profitable when:
1. they are loosing money with every console sold
2. they have destroyed the economy of games inside their ecosystem (games sales have plummeted)
3. they have to pay third parties to release games on game pass.
4. Now they are paying for Zenimax and ABK wages and operating cost.
5. Xbox had a decline of 7% in overall revenue YoY
The gaming division is now the #1 games publisher. It takes some amazing mental gymnastics to think the #1 publisher isn't making a profit.
Radical_3d
Member
Damn, makes Sony's revenues seem like chump change. Sony bros, I don't feel so good
March 2024
rickybooby87
Member
In the most recent fiscal quarter ending December 31, 2024 (Q2 of fiscal year 2025), Microsoft's gaming revenue totaled approximately $6.58 billion.
Source: https://www.statista.com/statistics/831590/microsoft-quarterly-gaming-revenue/
In the third quarter of fiscal year 2024 (October to December 2024), Sony's Game & Network Services division, which includes PlayStation, reported revenue of ¥1.68 trillion (approximately $10.9 billion).
Source: https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/24q3_sonypre.pdf
Even though Microsoft went out and bought new revenue streams, they still aren't pulling in more revenue than the PlayStation division, now, that could change at some point in the future, but also, revenue streams do not equal operating profit. The next argument will be, "Well, Microsoft is a 3T (market cap) tech company that could buy up poor little Sony that's only worth 148B (market cap).
Source: https://www.statista.com/statistics/831590/microsoft-quarterly-gaming-revenue/
In the third quarter of fiscal year 2024 (October to December 2024), Sony's Game & Network Services division, which includes PlayStation, reported revenue of ¥1.68 trillion (approximately $10.9 billion).
Source: https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/24q3_sonypre.pdf
Even though Microsoft went out and bought new revenue streams, they still aren't pulling in more revenue than the PlayStation division, now, that could change at some point in the future, but also, revenue streams do not equal operating profit. The next argument will be, "Well, Microsoft is a 3T (market cap) tech company that could buy up poor little Sony that's only worth 148B (market cap).
For them probably. Don't forget they are 1st and foremost a software/service company and xbox is a tiny part of their overall finances, the data they gather from xbox users is prob worthwhile to them. Theres tons of companies out there that have never made a profit in their existence yet are some of the most valuable in the world.
Mr Moose
Member
You should make a thread about it.
Killjoy-NL
Gold Member
Unless papa Nadella keeps shoving money into a bottomless pit just to keep it around.
So you're saying the #1 games publisher in the world is not making a profit?
Killjoy-NL
Gold Member
Depends on the data. I don't have it, so it's hard to argue either way.
Though iirc, didn't the Xbox division have €400m operating loss after they acquired ABK?
Then I suppose it depends how much revenue they made last year and how much it cost them the run the division.
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Topher
Identifies as young
Mr Moose
Member
440M for one Q, in 3Q's it was about 1.2B loss if I remember correctly.
Edit: It was 1.36B loss.
440, 350, 570.
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fallingdove
Member
If they are loosing money on hardware, if they haven't recouped their investments, if GamePass costs more to run than it is making, if actual game sales have eroded, of course there is a scenario where they aren't profitable.
twilo99
Member
They make that cash back in approximately one fiscal year so really it sounds like an enormous amount but even if that asset went to zero they will be very much okay.
Is what they bought worth 80 big today? Probably not but it's certainly not worth zero dollars…
Hudo
Member
To be fair, Microsoft has so much money that shoveling billions into Xbox isn't gonna significantly impact their bottom line.
poppabk
Cheeks Spread for Digital Only Future
The shitty Xbox sales pretty much guarantee this is the most profitable generation for them.
nowhat
Member
Maybe? So why not release the numbers then?
poppabk
Cheeks Spread for Digital Only Future
Because they don't have to. If they have some extra special result I'm sure they will release something outside of the earnings, but the earnings reports are always going to be structured to provide focus to the segments that are driving the company - which isn't ever going to be gaming.
thismeinteil
Member
Apparently MS doesn't believe that, otherwise they wouldn't be shipping their games onto PlayStation, killing any reason to buy their HW.
nowhat
Member
MS used to release sales figures of consoles about up until the second year of One. Never since. But they used to do that. Wonder what changed?
poppabk
Cheeks Spread for Digital Only Future
Because the sales became meh at best.
thicc_girls_are_teh_best
Member
This is one of Derek's worst articles, and I thought he was learning to not baby Xbox so much during some of his ABK acquisition takes (among Xbox-friendly press, he was one of the more sane people). The title is completely misleading because it implies the consoles themselves have contributed this amount, when we know from all valid sources hardware sales are on a death bed, even in America.
Also it confuses revenue with net profit; not even gross profit, but net profit. Or at least it's ambiguously worded in the title to a point where a casual reader implies such. This misinforms yet another person online, who taints discussions around the platform by citing inaccurate information. And, since that person likely already has a bias towards the platform, they just reconfirm it with erroneous information, indoctrinating them and making it that much harder for them to learn the truth.
All in all, hilariously misworded article. Approaches peak glazing territory.
Also it confuses revenue with net profit; not even gross profit, but net profit. Or at least it's ambiguously worded in the title to a point where a casual reader implies such. This misinforms yet another person online, who taints discussions around the platform by citing inaccurate information. And, since that person likely already has a bias towards the platform, they just reconfirm it with erroneous information, indoctrinating them and making it that much harder for them to learn the truth.
All in all, hilariously misworded article. Approaches peak glazing territory.
nowhat
Member
But surely the terrific (software/subscription) sales would have been something to write home about. Instead we get some arbitrary metrics like "MAU". It's pretty blatantly obvious the MS gaming division is bleeding money.
poppabk
Cheeks Spread for Digital Only Future
When was the last time they reported profit for the gaming division?
They would have to be working real hard to not be making a profit with the hardware dying and not sucking up cash.
Hudo
Member
I mean, of course they want to maximize profits. That's only natural.
nowhat
Member
Around the time they reported Xbox sales. Now it's all revenue.
Let's put this another way. If they were making a profit, with all the acquisitions and push for a subscription, they surely would be shouting it from the rooftops? Yet, they don't do so. Which leads me to conclude, they are not making money. Revenue, sure. But living off purely revenue may be suitable for a startup, not a listed company.
Jigsaah
Gold Member
Netflix was a net loser for a long time. I think they only became profitable in recent years...maybe Covid affect...not sure. Either way, the math here is really easy, Xbox spent 80 billion just within the past couple of years with buying ABK...add another 7 billion for Bethesda...that means Microsoft is easily in the hole. That being said...63 billion for content and services is nothing to sneeze at and should they continue to trend upward in this category while also minimizing future costs, they could become profitable again by end of next generation...just spitballin' it. No shit they're putting their games everywhere. They have to.
I'd be on the street corner slangin' Halo too.
I'd be on the street corner slangin' Halo too.
Topher
Identifies as young
Acquisitions do not put a company in the hole (unless they have to borrow the money). It is a change of assets. If I buy a beach house for $1 million cash then I'm not $1 million "in the hole". My assets are just less liquid. If I rent out that beach house then the question is what is my ROI. The same is true for corporations.
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nowhat
Member
Woopah
Member
It's not just about costs. That 22 billion includes third party digital revenue, 70% of which doesn't stay with Microsoft.
That was a cost related to ABK specifically right? I don't believe MS gives profit figures for its individual sectors.
PharaoTutAnchAmun
Member
So you cant give an answer mister economist, got you
thismeinteil
Member
It's a little more impactful then just maximizing profit. They're announcing they're done losing money on Xbox, so the argument that it's just chump change to MS and they could do it forever and not care doesn't hold water. They're also admitting defeat in the HW biz.
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