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Steve Ballmer's Microsoft

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Re: Steve Ballmer's Microsoft

#11

Post by cube13 »

reidmain wrote: post #5
maybird wrote: post #3

(229) M Entertainment and Devices How did they lose money on Xbox?

They only recently started making money with every sale of a Xbox 360. Typically console makers sell their hardware at a loss to get it into as many hands as possible and then make money with software. That is why Nintendo is taking such a bath this generation. People buy a Wii for the novelty and only get one or two games where Microsoft and Sony are much more about the games they have on their consoles.

Nintendo has always sold their hardware for profit. They made money on the Wii from day one.

They're taking a bath right now because the strength of the Yen versus USD removes a lot of their export profit. That, combined with the fact that they're ramping up production of the 3DS and the next console, is the reason they lost money.

Re: Steve Ballmer's Microsoft

#13

Post by joshAg »

maybird wrote: post #3

(229) M Entertainment and Devices How did they lose money on Xbox?

Consoles are sold at a loss, so that more people will buy the console (licensing fees are proportional to the size of the audience/consumer base). Even the PS3 when it first came out at $600 was a loss leader; if i'm remembering right for the PS3, the cost of the hardware was something close to $1000.

Companies expect to make that money back through 1st party game sales and licensing fees from 3rd party developers for access to the sdk.

Re: Steve Ballmer's Microsoft

#14

Post by Steko »

reidmain wrote: post #5
maybird wrote: post #3

(229) M Entertainment and Devices How did they lose money on Xbox?

They only recently started making money with every sale of a Xbox 360. Typically console makers sell their hardware at a loss to get it into as many hands as possible and then make money with software. That is why Nintendo is taking such a bath this generation. People buy a Wii for the novelty and only get one or two games where Microsoft and Sony are much more about the games they have on their consoles.

Nintendo's taking a bath for multiple reasons but in regards to the wii (1) they rode it for too long and (2) all it did was games while the more robust hardware in the PS3 and Xbox made them more useful.

Re: Steve Ballmer's Microsoft

#15

Post by yankcrime »

toot wrote: post #7

This is way off topic, but I was wondering does anyone know what this blog is built with, and if a site template is available? I really like the design and notice that another YC blogger Ilya Lichtenstein is using the same design on his site

And here's the obligatory clone: https://github.com/natew/obtvse

Re: Steve Ballmer's Microsoft

#16

Post by rvn1045 »

dean wrote: post #6

The stock market is all about the future, not the past. A lot of people see Microsoft's future as being less profitable than its past. That's why people belittle it. Microsoft makes a ton of money, no one will deny that, but they make less money than they used to. It's funny how the OP shows the financial numbers for one quarter and says the "the trend here is clear". You can't determine a trend on one quarter, you h…

"they make less money than they used to"

That's incorrect, your looking at profit margins and not actual profits. Profits have actually been increasing every year in the last few years (except in 2009).

Re: Steve Ballmer's Microsoft

#17

Post by Steko »

dean wrote: post #6

The stock market is all about the future, not the past. A lot of people see Microsoft's future as being less profitable than its past. That's why people belittle it. Microsoft makes a ton of money, no one will deny that, but they make less money than they used to. It's funny how the OP shows the financial numbers for one quarter and says the "the trend here is clear". You can't determine a trend on one quarter, you h…

People belittle Ballmer because:

(1) they were the big villain for a long time and there's still a lot of unspent schadenfreude with their name on it.

(2) they've always been juxtaposed with Apple which is in meteoric rise like nothing we've really ever seen.

(3) because monkey boy

Their stock price is flat only if you don't include the dividends they've paid out.

Re: Steve Ballmer's Microsoft

#18

Post by georgemcbay »

maybird wrote: post #3

(229) M Entertainment and Devices How did they lose money on Xbox?

They didn't lose money on the 360 (this past quarter anyway, clearly they did for a first few years of the device's life), they lost it on winding down the remnants of Zune and ramping up Windows Phone.

Also, while the 360 is still king of the consoles in terms of overall sales and is profitable, it is selling less quickly than before because this console generation is past its peak and is riding the downward slope on new units sold until the next hardware refreshes appear.

So the 360 is still a net positive, but less positive than recent past quarters and not positive enough to offset other losses.

Re: Steve Ballmer's Microsoft

#19

Post by lkrubner »

Steko wrote: post #17
dean wrote: post #6

The stock market is all about the future, not the past. A lot of people see Microsoft's future as being less profitable than its past. That's why people belittle it. Microsoft makes a ton of money, no one will deny that, but they make less money than they used to. It's funny how the OP shows the financial numbers for one quarter and says the "the trend here is clear". You can't determine a trend on one quarter, you h…

People belittle Ballmer because: (1) they were the big villain for a long time and there's still a lot of unspent schadenfreude with their name on it. (2) they've always been juxtaposed with Apple which is in meteoric rise like nothing we've really ever seen. (3) because monkey boy Their stock price is flat only if you don't include the dividends they've paid out.

"Their stock price is flat only if you don't include the dividends they've paid out."

You have that backwards. If people think a company will pay out big dividends, then they bid up the price of the stock. That Microsoft's stock has remained mostly flat despite good dividend payments suggests that the stock would have plummeted without the dividend payments, and it will plummet if the dividend payments stop.

A flat stock price despite good dividends suggests weakness, not strength.

Re: Steve Ballmer's Microsoft

#20

Post by kitsune_ »

dean wrote: post #6

The stock market is all about the future, not the past. A lot of people see Microsoft's future as being less profitable than its past. That's why people belittle it. Microsoft makes a ton of money, no one will deny that, but they make less money than they used to. It's funny how the OP shows the financial numbers for one quarter and says the "the trend here is clear". You can't determine a trend on one quarter, you h…

The market does not think. It is neither efficient nor rational.

If the stock market is about the future, then how do you interpret Goldman Sachs' share price of $235 in November 2007?

1 year later it fell to $53.

A company's share price will tell you nothing about the actual financial stability or future of the company.

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