Future of Xbox?

Hmm...

http://bgr.com/2013/11/08/microsoft-ceo-candidate-elop-bing-xbox/

Quote :

Members of Microsoft’s Bing team should get their résumés updated if Stephen Elop becomes the company’s new CEO. Unnamed sources tell Bloomberg that if Elop replaces Steve Ballmer as Microsoft’s chief executive, he will consider killing off money-losing operations such as its Bing search engine and its Xbox video game console. Elop would also try to sharpen the company’s focus and would make a cross-platform Microsoft Office that works on the iPad one of his top priorities.

In signaling that he’s on board with whacking Bing and the Xbox, Elop is following the advice of Microsoft cofounder Paul Allen and Nomura analyst Rick Sherlund, who have both signaled that the company needs to rethink its strategy and lop off divisions that aren’t pulling their weight. Bing in particular has been a major loser for Microsoft so far and has neither made money nor gained significant traction among web users. With a market share that’s stuck in the 20% range and cumulative losses that analysts estimate total between $11 billion and $17 billion, Bing looks like a prime candidate for the chopping block for whoever replaces Ballmer as Microsoft CEO.

A bunch of Xbox marketing people just quit too.

Its kind of fishy when the main people on your marketing team just leave 2 weeks before launch.

getting rid of the xbox is not going to happen even if its operating at a lose

It's kind of fishy that it gets dark earlier than before hrmmmm

Its kind of fishy that a company would cut something that they haven't made a dime off of.

Investors just love throwing money at a division that isn't pulling their own weight.

They wouldn't kill of that division...which is actually the entertainment division. If the new CEO does something it would most likely be to spin it off into it's own company with the Xbox brand name. The Xbox brand is valued at over 15 billion, making it to expensive to sell. Also, this division doesn't lose money. With hardware their profit margin is significantly less at just over 8% in the last year, compared to 35% profit margin for the software divisions.

I agree with money here 100%. With shareholders screaming for M$ to sell the Xbox division I can see it developing semi-independently. It will probably be more of a success that way too.

The Xbox division is in the red.

Shareholders/investors don't like things in the red.

It is not in a good spot right now

Nely wrote:

The Xbox division is in the red.

Shareholders/investors don't like things in the red.

It is not in a good spot right now

It's not in the red, but it's a lower profit margin business compared to their software.

MoneyMan300 wrote:

Nely wrote:

The Xbox division is in the red.

Shareholders/investors don't like things in the red.

It is not in a good spot right now

It's not in the red, but it's a lower profit margin business compared to their software.

Wrong. Wrong. Wrong.
It is in the red and will continue to be in the red for awhile.



It's nearly 3 billion.

http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years


Now do you understand why Elop/Allen might want to do something?

It's easy to sit on a forum and say it won't happen. Theses articles are form people who follow this stuff. They know more than you or me.

This is the pertinent graph:



Nely, the Xbox division is in the red overall because of the massive losses the original Xbox took when it was out, plus the R&D, development and RROD issues at the launch of the 360.  The graph shows that the last 5 years of the graph (2007-2012), the Xbox division was profitable.  One would assume 2013 would follow the profitability trend.  I think that would be reason numero uno to why they would want to KEEP the Xbox division.  It's making money for MSFT now.

Regardless, the $3 Billion is a sunk cost by now.  Investors are more worried about quarter to quarter (and yr to yr) performance than how much MSFT spent to market the original Xbox 10 years ago.  It might make a good headline to say they have lost $3 billion since 2003, but you could also say they have profited ~$3 billion since 2008.

Remains to be seen how it will shake out in 2014.  With the launch of the XB1, there will be massive marketing, PR, development, etc. costs that are factored in.  For sure there will be a loss.  The question is how quickly that turns into a profit.  With the 360, it looks like they had two down years then 5 (or 6) up years.

Nely wrote:

MoneyMan300 wrote:

Nely wrote:

The Xbox division is in the red.

Shareholders/investors don't like things in the red.

It is not in a good spot right now

It's not in the red, but it's a lower profit margin business compared to their software.

Wrong. Wrong. Wrong.
It is in the red and will continue to be in the red for awhile.

Um, sorry but no.  

Quote :

http://www.forbes.com/sites/jasonevangelho/2013/11/08/a-fictional-journey-into-stephen-elops-world-without-xbox/

Microsoft’s Entertainment and Devices division – which includes Xbox – saw a healthy 55% year-over-year growth from 2012 to 2013. But the sobering statistic? That growth represented actual operating income of $848 million. That’s a drop in the bucket compared to Microsoft’s income in the enterprise space: $6.334 billion in its first quarter of fiscal year 2014 alone.

Xbox is currently making MSFT money, just not that much money, especially compared to other MSFT divisions.

Huh?  Ok Overall it hasn't been profitable. Like I said.

Apples and oranges Nely.

@Wall: I believe I read somewhere that M$ is spending 250million this year on Xbox One marketing?

gun fer hire wrote:

@Wall:  I believe I read somewhere that M$ is spending 250million this year on Xbox One marketing?  

+100 milly on controller design

Just because a company turns a lose for 1-2 whatever years doesn't mean nessessarily that it has to dump a product or go bankrupt. The gaming market is huge and all the potential revenue to be generated from things like subscriptions, consoles, games, accessories etc. is too sweet to walk away from considering Sony is basically your only competition. All it takes is 1 or 2 good moves by MS and black is golden once again.

Listen, it's a drop in the bucket.  MSFT made $6.334 billion in Q1 FY2014 in Enterprise alone.  Over a full year, that's >$25 billion.  (Not sure if that's actually what they make, but you get the point - other divisions make a lot more.)  Compare that to the $2-3 Billion they lost over 10 years!  

Put it another way... they lost ~$300 Million a year over 10 years on Xbox so far.  But the last 5 years have been profitable. Which means all the big losses came at the beginning of the life cycle, which is how these things work.

Xbox is not dead and I don't think it's going anywhere.

Well then ....................i need about tree fiddy.