Microsoft Should Spin Out of Cash Bleeding Xbox
Microsoft losing $2.5 billion on Skype, Xbox, and Windows Phone
Microsoft is apparently making $2 billion per year in revenue from Android patent royalties and using this to prop up and ailing division responsible for the Xbox and Windows Phone according to an analyst at respected Japanese bank Nomura.
According to a BusinessInsider report, Analyst Rick Sherlund is saying that the Android money, "helps Microsoft hide the fact that its mobile and Xbox groups are burning serious cash."
This is a huge claim and one that we think is a misuse of words. Microsoft would of course never use revenue to 'hide' losses. And Sherlund would be aware of this, having seen the openly held accounts. That's not to say, however, that a confusion must arise given losses at Microsoft.
The analyst claims that, "Microsoft is probably losing $2.5 billion on Skype, Xbox, and Windows Phone. Of that, $2 billion in losses are attributable to the Xbox platform", and that investors do not realise this.
Sherlund's solution is harsh - and with the launch of Xbox One most probably wrong. He "believes Microsoft needs to spin out Xbox. He sees it as an orphan group at Microsoft that doesn't really fit with anything it's doing."
Via BusinessInsider
According to a BusinessInsider report, Analyst Rick Sherlund is saying that the Android money, "helps Microsoft hide the fact that its mobile and Xbox groups are burning serious cash."
This is a huge claim and one that we think is a misuse of words. Microsoft would of course never use revenue to 'hide' losses. And Sherlund would be aware of this, having seen the openly held accounts. That's not to say, however, that a confusion must arise given losses at Microsoft.
The analyst claims that, "Microsoft is probably losing $2.5 billion on Skype, Xbox, and Windows Phone. Of that, $2 billion in losses are attributable to the Xbox platform", and that investors do not realise this.
Sherlund's solution is harsh - and with the launch of Xbox One most probably wrong. He "believes Microsoft needs to spin out Xbox. He sees it as an orphan group at Microsoft that doesn't really fit with anything it's doing."
Via BusinessInsider
Companies:
Microsoft
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Comments
AJ 22 Nov 2013 14:23
1/1
this isn't true at all, the Xbox brand brings in about 3 billion in revenue for M$ every year. that is actually small potatoes compared to their revenue from selling licenses for Windows 7, Windows 8, Office, etc.
they make the most money on selling Office licenses out of everything, that is why Ballmer thought the heavy focus on enterprise was a good idea for the company, because it's their bread and butter market.
as for windows phone...very slow start, but right now it maintains about 4% of the market...which sounds like a small number, but consider that the iPhone holds roughly 12% of the market as of Q3 2013, it means windows phone has a quarter of the market that iPhone has and that marketshare for windows phone has been steadily growing as blackberry continues to shrink, iPhone also continues to shrink.
microsoft just spent 7 billion dollars buying out Nokia's handset/mobile division, they basically need to make windows phone a success. i believe they are, nokia's marketing campaigns in 2013 have been a massive success and caused a lot of consumer interest.
i think anyone who doesn't see that microsoft is poised for success over the next decade is being incredibly short sighted. they have a lockdown niche in the tablet market by throwing around a full computer OS on a tablet and rubbing it in the faces of google and apple that their tablets are running oprating systems designed for phones. the fact that a windows 8.1 tablet has legacy with 20+ years of microsoft programs is huge. they have a brand for the living room with the xbox, again something google and apple completely lack.
oh and let's not forget that if any company is hiding their losses, it's Sony, they've been in financial trouble for almost a decade now, they are desperately trying to make their Xperia devices relevant, but people aren't really biting...and they are riding A LOT on the PS4 being a long term success, whereas microsoft could actually lose the console war and still be just fine as a company...but if sony loses the console war somehow? sony would actually begin to sink.
they make the most money on selling Office licenses out of everything, that is why Ballmer thought the heavy focus on enterprise was a good idea for the company, because it's their bread and butter market.
as for windows phone...very slow start, but right now it maintains about 4% of the market...which sounds like a small number, but consider that the iPhone holds roughly 12% of the market as of Q3 2013, it means windows phone has a quarter of the market that iPhone has and that marketshare for windows phone has been steadily growing as blackberry continues to shrink, iPhone also continues to shrink.
microsoft just spent 7 billion dollars buying out Nokia's handset/mobile division, they basically need to make windows phone a success. i believe they are, nokia's marketing campaigns in 2013 have been a massive success and caused a lot of consumer interest.
i think anyone who doesn't see that microsoft is poised for success over the next decade is being incredibly short sighted. they have a lockdown niche in the tablet market by throwing around a full computer OS on a tablet and rubbing it in the faces of google and apple that their tablets are running oprating systems designed for phones. the fact that a windows 8.1 tablet has legacy with 20+ years of microsoft programs is huge. they have a brand for the living room with the xbox, again something google and apple completely lack.
oh and let's not forget that if any company is hiding their losses, it's Sony, they've been in financial trouble for almost a decade now, they are desperately trying to make their Xperia devices relevant, but people aren't really biting...and they are riding A LOT on the PS4 being a long term success, whereas microsoft could actually lose the console war and still be just fine as a company...but if sony loses the console war somehow? sony would actually begin to sink.
