Hacker News new | ask | show | jobs
by pandaman 4613 days ago
Why sales matter and not profits? If I go and buy Ferrari F360s for $200K then turn around and sell them for $10K I can probably get a lot of sales yet from the business perspective I am going to be in a pretty bad state.

Has MS turned in any profit from their whole Xbox affair? There had been various estimates around but I've never seen ones claiming significant profits, the best ones I'd seen claimed it broke even. They had shown some minor profit on their entertainment divisions in some quarters but the RROD alone costs them $1B not counting minor stuff like purchasing and running Rare or paying for "exclusivity".
1 comments
InclinedPlane 4613 days ago
If profit figures were available we wouldn't be having this discussion, because the answer would be obvious. But they're not. Nintendo's figures are the most available (since gaming is the majority of their business and they are a public company), but the least relevant because we know they've been struggling. Sony has had reduced profitability and losses over the last few years. The interesting thing is how difficult it is to get numbers out of Microsoft. They fold the Xbox and console gaming part of the company in with web-based gaming and the windows phone (and formerly zune) part of the company, which muddies the waters considerably. Overall though there are many indications that console gaming has been profitable for Microsoft. For example, in 2012 alone xbox live made $1.2 billion in revenue. This is a very high-margin business for MS and that represents about 10% of the entire worldwide video game revenue.

MS has dumped a lot of money into console gaming, but they've built a business that is now generating a lot of revenue in a lot of high margin areas.

link
pandaman 4613 days ago
I think your numbers are way off, the entire worldwide video game revenue is not anywhere around $12B[1]

Also margins are not as high as you seem to imagine, look at any 3d party publisher reports (they are all public corps).

[1] http://in.reuters.com/article/2013/06/10/gameshow-e-idINDEE9...

link
Keyframe 4613 days ago
If it's such a successful business for Microsoft, how come potential next CEO of Microsoft is thinking of ditching that business to someone else? Is he insane or that business is a burden to Microsoft?
link