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Resetting Xbox

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Re: Resetting Xbox

#571

Post by [deleted] »

foepys wrote: post #159
tracker1 wrote: post #71

Earlier quoted context omitted.

On the margins, that's crazy thin for the size of the org... One bad quarter could turn from a few million in profits to hundreds of millions in losses. It's too close, and there's no way to build/store funds for any kind of storm at that level. Now, I think the vast majority of the pain is more than self-inflicted... I think actual business, marketing and focus need to start taking priority over idealistic political…

Billion USD grocery chains operate on 2-3% margins just fine...

[deleted]

Re: Resetting Xbox

#572

Post by groundzeros2015 »

tayo42 wrote: post #192
darth_avocado wrote: post #116

Earlier quoted context omitted.

> Then they did not have to give away popular games day one on Game Pass A company that sells consoles complaining about not having enough games after 25 years in business and acquiring most popular game studios is hilarious. They keep cutting game studios, killing games and then set ambitious profit margins. At some point you have to question, do the people in charge understand their own business at all? They just g…

This attitude seemed prevelant at Blizzard too based on a book I read (Play Nice)they wouldn't fund anything that wasn't a billionaire dollar idea. Never ending growth and profits just seem to ruin everything

That’s because the risk of making novel games is large.

Re: Resetting Xbox

#573

Post by gopher_space »

spenczar5 wrote: post #245
_verandaguy wrote: post #234

Earlier quoted context omitted.

> 150M at 5B revenue is not great Considered as a raw percentage in a vacuum, sure, I guess, but we're talking about... - A company which has undertaken a concerted, long-term effort to consolidate the industry under its umbrella (something they themselves call out as a problem in this post), reducing consumer choice - A company which has captured a significant chunk of the console market. They're one of the big thre…

> This is still $150M of pure gravy every single year. The issue is rate of return. They are evidently spending $4.85bn on Xbox per year. The US federal interest rate is 3.5% so if you just put that money in US bonds you would get about $175M per year of much purer simpler gravy.

Another point of view is that your people are so good that their division turns a profit under mismanagement. It costs MS negative hundred mil to keep the whole thing spun up on a bad day.

Re: Resetting Xbox

#574

Post by rustystump »

ebbi wrote: post #296
Telaneo wrote: post #287

Earlier quoted context omitted.

A part of me wants to be generous in interpreting that and say, OK, maybe it's the first time she's playing games semi-seriously in order to understand the capital G Gamer. Surely she's played games before, like say, the Sims, Bejeweled, Mario Kart, or picked up a Nintendo DS or Switch in her lifetime. Heck, even Wii Sports should count here in some capacity. Most people have played games casually in their lifetime b…

It's a publicly listed company. They needed someone without the emotional attachment to 'Gaming', but with business nous, to make the decisions needed to meet her mandate, which is to ultimately increase shareholder value. A 'Gamer' would have found that more difficult to do.

Press Q to doubt. There are plenty of biz savvy folks out there who at least gamed in high school or college.

Re: Resetting Xbox

#576

Post by groundzeros2015 »

taurath wrote: post #170

> We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes. This is the new trendy management style - a few executive owners and then everyone else are expendable ICs, with a…

What does Peter Thiel have to do with Xbox? Are we just saying things we don’t like?

Re: Resetting Xbox

#577

Post by _carbyau_ »

skeeter2020 wrote: post #314
spenczar5 wrote: post #245

Earlier quoted context omitted.

> This is still $150M of pure gravy every single year. The issue is rate of return. They are evidently spending $4.85bn on Xbox per year. The US federal interest rate is 3.5% so if you just put that money in US bonds you would get about $175M per year of much purer simpler gravy.

Russ: "Anyway, next thing you know, we IPO, stock triples in a day and AOL gobbles us up. All of a sudden, I'm 22 years young and I'm worth 1.2 billion. Now a couple decades later, I'm worth 1.4. You do the math." Richard: "Okay. Well, that's a gain of $200 million over 20 years. Um, 16.66 repeating. That's less than 1% return. Inflation is, like, 1.7. I think CDs are 2%. So that's less than a CD."

I know this is a TV show reference and a point about investment strategy but...

If I had 1.2 billion dollars I wouldn't care what investment strategy I had. I've got enough to spend $30k a day for 100 years. At any age, that'll do.

Re: Resetting Xbox

#578

Post by groundzeros2015 »

xg15 wrote: post #160

For that kind of announcement, I found it surprisingly open and detailed (at least if everything in there is true). Still, some points are telling. > Our business today is not healthy. We are operating at margins that are 3-10x lower than comparable platform and publishing businesses. So the layoffs are not because they're operating at a loss and had to cut costs urgently. The margins are there, they aren't even thin…

Companies do not exist to pay employees. There is significant risk and opportunity cost to running this business.

Re: Resetting Xbox

#579

Post by Drupon »

mattalex wrote: post #207
rockyj wrote: post #24

This is a total mess IMHO. - The make around 5 billion in revenue per quarter - The problem according to them is profit margin - around 150-160 million So first of all, they are big! Secondly they are not at a loss. They just have a "thin, non-growing margin". So to fix all this they are trimming down, so they can "return to growth" (which I think is ridiculous). Some points - - They are huge business even now - 5 bi…

150M at 5B revenue is not great: that's 3% margin! The bigger issue is that console manufacturer revenue is highly cyclical. This is hard to see in e.g. Xbox and Sony since they are both part of a larger conglomerate, but really obvious for nintendo. You generally have a cycle of - "Launch": high marketing costs, low/negative HW margins - "Mid-cycle": lowering manufacturing costs, large game sales, high margin DLCs -…

>150M at 5B revenue is not great: that's 3% margin!

Oy vey maybe this kind of money grubbery is not good for our society.

Re: Resetting Xbox

#580

Post by [deleted] »

genxy wrote: post #504
dcrazy wrote: post #280

Earlier quoted context omitted.

And they have hiked the prices of the current gen very late in the cycle to reflect component costs.

The cheapest xbox should cost 129. Instead it is $399. That is how consoles work. It gets cheaper, the back catalog grows and now you have a mass market item that ideally could source games from anywhere. Consoles losing physical media and not allowing 3rd party app stores, or gasp, the ability to run user programs is going to kill the consoles. Expensive and marginal future utility.

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