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Is Microsoft in trouble?

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Re: Is Microsoft in trouble?

#51

Post by InclinedPlane »

mjfern wrote: post #25
aresant wrote: post #14

What? a) XBOX usage destroys Wii in usage, games purchased, and subscription fees all of which are better indicators of the platform' success than hardware units sold which are traditionally a loss leader. And oh yah, XBOX is wildy profitable. Meanwhile Wii sales are down 45% since last September! b) They are JUST launching their mobile platform which has gotten fair to begrundgingly good reviews and is opening in 30…

To your points above: a) In Microsoft's 2010 fiscal year (which has ended), its Entertainment and Devices Division (which includes the Xbox 360) generated $8.5 billion in revenues and just $679 million in operating income. Considering Microsoft's consolidated operating income in 2010 was $24 billion, this $679 million only accounts for about 3% of Microsoft's profits. And in any event the Xbox 360, the PS3, and the W…

Microsoft's E&D division not only includes xbox et al it also includes Windows Mobile development (coughkincough) and Live and a bunch of other crap. The xbox part of E&D is doing very, very well, and making a tidy sum for the company.

Re: Is Microsoft in trouble?

#52

Post by mjfern »

sriramk wrote: post #32

As someone who works on Windows Azure, this got under my skin a bit :). In particular, I thought this was slightly lazy writing (W.r.t Azure) "I suspect it’s not performing well" and "Put simply, it’s hard to imagine that Microsoft is aggressively developing or marketing Azure, since cloud computing offerings directly threaten Microsoft’s revenues and profitability in the PC market, especially its Windows and Office…

Sorry, that wasn't my attention. I tried to research Azure online, looking for hard numbers on its performance in the cloud computing market (e.g., # of companies using Azure, adoption rates, etc.), but I was unable to find any concrete data. In fact, I struggled to even find a thorough review of Azure. Can you please point me to some data and/or reviews so I can incorporate this information properly into any future posts? Thanks!

Re: Is Microsoft in trouble?

#53

Post by Matt_Cutts »

recoiledsnake wrote: post #40
ratsbane wrote: post #30

Earlier quoted context omitted.

That clearly wasn't my point. http://blog.rescuetime.com/2010/06/17/google-is-eating-micro...

Those numbers look highly improbable, especially coming from such a small subset. This article shows the number of Office online users in just the first 100 days after launch as 20 million, compared to 25 million for Google Apps. http://seattletimes.nwsource.com/html/microsoftpri0/20130869...

Besides those 20M, MSFT recently announced 30 million active Windows Live Spaces users:

http://www.betanews.com/joewilcox/article/Microsoft-Windows-...

Re: Is Microsoft in trouble?

#54

Post by patd »

mattmaroon wrote: post #42
aresant wrote: post #14

What? a) XBOX usage destroys Wii in usage, games purchased, and subscription fees all of which are better indicators of the platform' success than hardware units sold which are traditionally a loss leader. And oh yah, XBOX is wildy profitable. Meanwhile Wii sales are down 45% since last September! b) They are JUST launching their mobile platform which has gotten fair to begrundgingly good reviews and is opening in 30…

I do cringe every time I see someone talk about how the Wii is beating the Xbox. Console sales are only part of the battle, and not the big part. People buy a Wii, play Wii sports and maybe another couple games for a few weeks, and then it collects dust. Xbox owners subscribe to Xbox live and buy new games quite frequently.

http://en.wikipedia.org/wiki/List_of_best-selling_video_game...

Total Wii games sold as of June 1, 2010: 573 million

Total Xbox 360 games sold as of December 2009: 353.8 million

Total PlayStation 3 games sold as of June 30, 2010: 315.3 million

So yes, the Wii is beating the crap out of the Xbox. Americans don't realize that the Xbox only does well in the US. Europe and Asia are a tough market for Microsoft.

Re: Is Microsoft in trouble?

#55

Post by patd »

aresant wrote: post #19
latch wrote: post #17

Earlier quoted context omitted.

What?! Xbox is wildly profitable? xbox (original + 360) has lost MS tens of billions of dollars in its history (not an exaggeration). The fact that its just now (the last 2 quarters, an no more) pulling in profits in the hundreds of millions means that they'll break even in 5-10 years. If you gave me $10, and I gave you back $0.50, would you consider it a "wildly profitable" venture for yourself?

In fact if I was MSFT and you gave me $25.82 (current stock price) I'd give you back $0.64 a year and a share of my stock (current dividend price). And in fact, they've made that sale 8,650,000,000 times so far (current outstanding shares). http://www.dividend.com/dividend-stocks/technology/applicati... EDIT -> You're ignoring that the division DOUBLED profits over the last year, what if they maintain that growth rat…

Video games platforms are a cyclic industry. It's unprofitable during the first few years when they launch their new system then it becomes a cash cow when hardware gets cheaper to produce and they don't have to spend too much yet to launch the next generation.

I believe that overall, Xbox will be profitable for Microsoft, it gives them a foot in the user's living room and could be used to stream content onto their TV. But wildly profitable ? Probably not. You've got to be Nintendo to do that : sell your hardware with a good margin from day one and sell millions of every Mario/Zelda game that you release.

Nintendo is king because they build the hardware, sell the software and have the vision thanks to Miyamoto. It's really the Apple of video games.

Re: Is Microsoft in trouble?

#56

Post by chaostheory »

patd wrote: post #54
mattmaroon wrote: post #42

Earlier quoted context omitted.

I do cringe every time I see someone talk about how the Wii is beating the Xbox. Console sales are only part of the battle, and not the big part. People buy a Wii, play Wii sports and maybe another couple games for a few weeks, and then it collects dust. Xbox owners subscribe to Xbox live and buy new games quite frequently.

http://en.wikipedia.org/wiki/List_of_best-selling_video_game... Total Wii games sold as of June 1, 2010: 573 million Total Xbox 360 games sold as of December 2009: 353.8 million Total PlayStation 3 games sold as of June 30, 2010: 315.3 million So yes, the Wii is beating the crap out of the Xbox. Americans don't realize that the Xbox only does well in the US. Europe and Asia are a tough market for Microsoft.

"Europe and Asia are a tough market for Microsoft"

Asia is a tough market for Xbox. Europe is just fine.

Re: Is Microsoft in trouble?

#57

Post by lionhearted »

I'll never bet against a company with huge, established, consistent revenues and a strong research culture. That combination gives a large chance of being able to bring breakthrough technology to market.

Re: Is Microsoft in trouble?

#58

Post by icarus_drowning »

jerf wrote: post #28
aresant wrote: post #19

Earlier quoted context omitted.

In fact if I was MSFT and you gave me $25.82 (current stock price) I'd give you back $0.64 a year and a share of my stock (current dividend price). And in fact, they've made that sale 8,650,000,000 times so far (current outstanding shares). http://www.dividend.com/dividend-stocks/technology/applicati... EDIT -> You're ignoring that the division DOUBLED profits over the last year, what if they maintain that growth rat…

"what if they maintain that growth rate?" That's a terrible argument structure. You might as well cut straight to "What if we just assume I'm right?" and be more honest about it. http://www.joystiq.com/2010/04/23/xbox-division-posts-165-mi... says $165 million in profits on $1,670 million (1.67 billion) in revenue for the division. Saying "doubled their profits" sounds impressive, but it's not sustainable; say rather…

Yeah, but the entire linked post is making the same kinds of assumptions about general trends in hardware. Now, those assumption might be stronger than these (I happen to think they are), but its logic really isn't terribly better than this.

Re: Is Microsoft in trouble?

#59

Post by patd »

chaostheory wrote: post #56
patd wrote: post #54

Earlier quoted context omitted.

http://en.wikipedia.org/wiki/List_of_best-selling_video_game... Total Wii games sold as of June 1, 2010: 573 million Total Xbox 360 games sold as of December 2009: 353.8 million Total PlayStation 3 games sold as of June 30, 2010: 315.3 million So yes, the Wii is beating the crap out of the Xbox. Americans don't realize that the Xbox only does well in the US. Europe and Asia are a tough market for Microsoft.

"Europe and Asia are a tough market for Microsoft" Asia is a tough market for Xbox. Europe is just fine.

They're doing bad in Asia and doing OK in Europe. The competition with the PS3 is hard in Europe, that's why I said "tough". They are number 2 in some countries (like the UK), but overall they're number 3.

PS3 in Europe as of August 17, 2010 : 16 million

XBox 360 in EMEA (including UK) as of November 13, 2009 : 10 million

Sources : http://www.computerandvideogames.com/article.php?id=260424

http://en.wikipedia.org/wiki/Xbox_360#Sales

Re: Is Microsoft in trouble?

#60

Post by motters »

Microsoft isn't dead yet, and its future depends upon how effectively it can leave its traditional revenue stream behind (Windows and Office). So far it has been lacklustre in the mobile and search markets, but done well in games.

Despite setbacks (Vista) Microsoft held its own in terms of operating systems and office productivity software over the previous decade, but in the next decade I think it's going to be more than overtaken in these areas.

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