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[ToadMan]

Well MS fired a lot of bullets this last few months to get this result.

In the great scheme of things it doesn't sound that great an ROI.

But actually the gaming bit underperforming isn't a surprise - it's been underperforming for a decade plus now.

The problem is the rest of what MS is doing - Cloud revenue declined and Deepseek making their AI investments look like poor business. So MS wider business is running into headwinds and a 100bn into gaming has done nothing for that during what should have been a marquee year and quarter.

Was it Amy Hood who specifically threw hardware under the bus for the majority losses? The problem is hardware and services cannot be separated.

Xbox have really tied themselves up. They've got a dead console hardware brand, but the majority of their subbers have that hardware. They can't just dump hardware like Sega did - they'll also be dumping Gamepass subs which is their only revenue stream.

So Gamepass and Xbox hardware are conjoined twins - kill one and you kill the other so they both have to go on life support.

Xbox content and services grew 2% and that's the bottom line.

2%... That's a rounding error on Google Sheets...

 

[adamsapple]

No one needs to be reminded that 6.6b in revenue is a lot of money in order to deflect from the 7% decrease either.

Sure, but the key focus of the discussion here, in this thread at least, seems to be the game pass stat, which has been labeled as the key driver for the 2% growth in the content sector.

 

[ShaiKhulud1989]

bit underperforming

 

[Three]

Suck? They just did 6.6b for their second highest on record while Sony did 7b last quarter.

We’re talking a 400m difference with 1/5th the hardware sales.

That Microsoft needs to shut down gaming or they’re not profitable takes….

Are you honestly comparing July- September to October-December? Hilarious. Spinning as hard as MS with that "last quarter".

 

[Esppiral]

MS are the masters of spinning numbers and hiding facts.

Let's not pretend that every single company doesn't do that....

 

[Mr Moose]

Sure, but the key focus of the discussion here, in this thread at least, seems to be the game pass stat, which has been labeled as the key driver for the 2% growth in the content sector.

They need to start sharing numbers.
They gave credit to CoD in this one (which, of course, is available on GP).

Xbox content and services revenue increased 2%, ahead of expectations driven by stronger than expected performance in Blizzard and Activision content, including Call of Duty.

 

[Topher]

Sure, but the key focus of the discussion here, in this thread at least, seems to be the game pass stat, which has been labeled as the key driver for the 2% growth in the content sector.

And I wasn't replying to one of those posts. I was replying to yours about revenue.

 

[adamsapple]

And I wasn't replying to one of those posts. I was replying to yours about revenue.

And you make misleading topic titles while you're at it

 

[Humdinger]

Most of us, when we talk about GP being pro-consumer, talk from a PoV of how it's effecting us, the consumer, where it is undeniably a great deal.

I understand that. My point was that the guy who was getting criticized was just taking a different (but also fairly common) view of what "pro-consumer" means. He was considering GP's effects on the industry as a whole (devs, Xbox, quality of games, competition, etc.) - which affect the consumer, too. That is a legitimate way to think about it. From that POV, GP isn't "pro-consumer" but the opposite.

But yeah, I understand that when most people say "pro-consumer," they are just saying it saves them money.

p.s. I think some Xbox fans like to call it "pro-consumer" because it makes Phil sound like a good guy, like he really cares about the gamers.

 

[Mattyp]

Can you tell us net profit that came from this ordeal?

Revenue talk is meaningless when you burn more money than you actually generate. Even PlayStation, way more healthier division, was under legit pressure to improve profit margins even more.

MS+ABK in it's current form is simply not a viable business, but Papa Satya can at least cover Phil's ass with enterprise cloud and AI money, but we already know that even he is kinda fed up with this whole setup.

They just improved profit margins by 32%, so the onus is on you tell us how they’re burning through the equivalent of 66 AAA titles every 3 months. Revenue is all that matters in any company quarterly for stock growth we see this even in the loss leading companies that just keep burning cash reserves let alone Microsoft generating 30 billion in net profit for the quarter.

Are you honestly comparing July- September to October-December? Hilarious. Spinning as hard as MS with that "last quarter".

No I know it’s a different quarter obviously, but we’re talking less then half a billion (the cost of concord lol) to a gaming company having its best record ever (Sony) who for all figures you continually tell us is slaying Microsoft dead but they’re only half a billion in front? If anything Sony needs to greatly increase their revenue with that install base.

Microsoft is generating more revenue than Nintendo, they’re fine.

 

[ShaiKhulud1989]

They just improved profit margins by 32%, so the onus is on you tell us how they’re burning through the equivalent of 66 AAA titles every 3 months. Revenue is all that matters in any company quarterly for stock growth we see this even in the loss leading companies that just keep burning cash reserves let alone Microsoft generating 30 billion in net profit for the quarter.

Man, good thing you're not running a business. And I'm talking about even a hot dog stand.

 

[Topher]

They just improved profit margins by 32%, so the onus is on you tell us how they’re burning through the equivalent of 66 AAA titles every 3 months. Revenue is all that matters in any company quarterly for stock growth we see this even in the loss leading companies that just keep burning cash reserves let alone Microsoft generating 30 billion in net profit for the quarter.

Where did they report profit margins? If revenue is "all that matter" then why are they talking about margins at all? Quarterly stock growth is not directly tied to Xbox revenues. Phil Spencer has made it clear that Microsoft expects a profit returned. All part of his "I have a business to run" speech. So I don't think revenue is "all that matters" here. Even if that were the case, revenue decreased.

 

[Mattyp]

Man, good thing you're not running a business. And I'm talking about even a hot dog stand.

Revenue allows you to grow, growing subscriptions and end users along with content and assets.

Tell me you don’t run a business without telling me.. You would rather have a revenue of $5billion and $1 dollar profit margin vs that of $200 million revenue and $100 million profit.

The revenue is being reinvested into the business, the business then holds those assets for life, those assets turn a profit at the long term along with being worth $X amount. This is the Netflix, Disney, Airbnb, Uber… you get the idea. Microsoft spends that $6.6 billion in revenue in more game development, know what happens to those games once finished? They earn Microsoft money for life while growing the service catalogue and tying people into a Microsoft ecosystem.

Where did they report profit margins? If revenue is "all that matter" then why are they talking about margins at all? Quarterly stock growth is not directly tied to Xbox revenues. Phil Spencer has made it clear that Microsoft expects a profit returned. All part of his "I have a business to run" speech. So I don't think revenue is "all that matters" here. Even if that were the case, revenue decreased.

I can’t find the percentage now I swore he gave out how much they had increased the profit margin, he only talks about doing so for Xbox going forwards now. All that is tied into directly what I said above, they need to drop all their previous CoD titles etc assets they now own on gamepass. They hold a huge library they can now place on that service for little to no cost.

However,

“Gross margin increased $1.9 billion or 15% driven by growth in Gaming”

Read more: https://www.tweaktown.com/news/1028...game-pass-breaking-exclusivity-etc/index.html

 

[Zacfoldor]

It isn't 30% growth in revenue. 30% growth in PC Game Pass subscribers. Gaming revenue fell 7%.

We don't know how much growth in revenue came from the price increase.

Are you saying that they had a 30% increase in PC subs in 1 quarter?

If that is true, the rest of their portfolio must have went to shit for the overall numbers to be so bad.

Or, maybe they had like 10 PC subs and got 3 more? I dunno. Sounds strange.

 

[IDKFA]

Nope, GP is the most pro-consumer thing in the gaming market right now,

It's a great service, but it's just a gaming rental service. It's like saying Disney Plus is pro-consumer, or my gym membership is pro-consumer.

 

[EN250]

There isn't any estimation on the Xbone-PC split for GP, right? 30% seems like a great number, but if the subs base on PC is low from the start, anything would look like a big improvement even if it isn't

 

[Topher]

I can’t find the percentage now I swore he gave out how much they had increased the profit margin, he only talks about doing so for Xbox going forwards now. All that is tied into directly what I said above, they need to drop all their previous CoD titles etc assets they now own on gamepass. They hold a huge library they can now place on that service for little to no cost.

However,

“Gross margin increased $1.9 billion or 15% driven by growth in Gaming”

Read more: https://www.tweaktown.com/news/1028...game-pass-breaking-exclusivity-etc/index.html

Ok....so that is referencing overall company margin that gaming helped to improve. That's fine.

Are you saying that they had a 30% increase in PC subs in 1 quarter?

If that is true, the rest of their portfolio must have went to shit for the overall numbers to be so bad.

Or, maybe they had like 10 PC subs and got 3 more? I dunno. Sounds strange.

There was growth in content and service driven by Game Pass, but it was offset by losses in hardware is my understanding. I don't think PC subs were that high to begin with though which is why the PC game pass price hike was only $2.

 

[Hero of Spielberg]

Glad to see GP growing. I get great value from it so would love to see it continue.

Keen to see a wacky new console from Xbox too. Not that the poor HW results would change current plans by the sounds of things they're already well underway, hopefully will accelerate them I guess. Always looking for a reason to spend money on new consoles.

 

[mayham2199]

Are you saying that they had a 30% increase in PC subs in 1 quarter?

If that is true, the rest of their portfolio must have went to shit for the overall numbers to be so bad.

Or, maybe they had like 10 PC subs and got 3 more? I dunno. Sounds strange.

That's the whole point of them being vague about all their data. They present pretty numbers with no context to make things seem great when they aren't.

 

[Mattyp]

Are you saying that they had a 30% increase in PC subs in 1 quarter?

If that is true, the rest of their portfolio must have went to shit for the overall numbers to be so bad.

Or, maybe they had like 10 PC subs and got 3 more? I dunno. Sounds strange.

Hardware has gone to shit, they’re not hiding away from that fact and have documented the drop. That drop was offset by Gamepass however so they’ve cancelled each other relatively speaking.

 

[StreetsofBeige]

Nope, GP is the most pro-consumer thing in the gaming market right now, well second only to Epic's free weekly game(s) I guess.



My guess is the majority of folks who say that are those without a platform to access it.

I guess some people just like paying $70 like corporate lackies. Just like anything in life, if there's a deal, grab it. It might not happen again.

I thought gamers were supposed to be consumer advocates begging for cheap game, cheap consoles, and physical discs they can sell back to stores or lend to a friend.

Who knew it turns out many like to pay $70.

I dabbled with MLB The Show with no additional costs as an example. It was on the service 4 years in a row. A core baseball gamer could had got their baseball fill already subbed to GP, while another baseball gamer on PS or Switch would be paying $70/yr.

 

[DaleinCalgary]

Microsoft has been the worst stock investment I have done in the last 5 years.

They suck

 

[StreetsofBeige]

Microsoft has been the worst stock investment I have done in the last 5 years.

They suck

Looks like you bought in the past 6 months at their peaks. 5 years ago it was $180.

 

[Not_A-Cop_Maybe]

It's a great service, but it's just a gaming rental service.

I understand the point you are trying to make.

Literally nobody but people against the concept of gamepass keep trying to parrot this take.

yeah- we know its a rental service. Its literally the netflix/prime video/uber eats/doordash for video games. It's never been advertised as anything else. The fucking tag line is "Play Hundreds of high quality games" - it didnt fucking say "own hundreds of high quality games"

i want to play games. I don't have an infinite amount of money. This service lets me try more games than i could normally afford per year. For the price of 2 or 3 games a year i can try every MS/Xbox game studios game on day 1, or play with a large catalogue of other games on the service.
This service does not stop me from buying the game after i try it or play it. In fact, if i choose to buy the game digitally, there is a discount incentive for me to buy the game. How the fuck can you people call this anything but pro-consumer. You literally can try games you wouldn't normally without any tether to a timed demo, or buyers remorse.

If your concern is that Devs wont make enough money via sales?- MS literally pays devs to get games onto xbox. Dev's can literally take that money and continue to build the game, or invest it into their company for growth. How they spend that money is on them- the dev. If a dev goes under after putting their game on gamepass- after getting paid to do it, thats a dev problem. People here mistake the idea that somehow MS gives these devs a 100 bucks and a packed lunch to bring their games over, and then if they struggle, "oh its was xbox's fault cause of gamepass"

If there is anything you want to complain about it should be the fact that a digital library/stores pushes the medium further into digital over physical. A trend that seems to be inevitable given that PC gaming is virtually 100% digital. And after all, the pc master race is ultimately where consoles want /shoud be ecosystem wise right?
This isnt solely because of gamepass. This is because there are more profits to earn for digital vs physical in terms of production spending. You should be taking this argument to the publishers and devs of the games you enjoy to continue to offer both and to make digital options cheaper. Because a 100+ collectors edition for a physical copy is significanty worth more than a digital collectors edition without any physical stuff.

 

[DaleinCalgary]

Looks like you bought in the past 6 months at their peaks. 5 years ago it was $180.

no, I never said I held it for 5 years. I said in the last 5 years of my trading.

 

[Bumblebeetuna]

I understand the point you are trying to make.

Literally nobody but people against the concept of gamepass keep trying to parrot this take.

yeah- we know its a rental service. Its literally the netflix/prime video/uber eats/doordash for video games. It's never been advertised as anything else. The fucking tag line is "Play Hundreds of high quality games" - it didnt fucking say "own hundreds of high quality games"

i want to play games. I don't have an infinite amount of money. This service lets me try more games than i could normally afford per year. For the price of 2 or 3 games a year i can try every MS/Xbox game studios game on day 1, or play with a large catalogue of other games on the service.
This service does not stop me from buying the game after i try it or play it. In fact, if i choose to buy the game digitally, there is a discount incentive for me to buy the game. How the fuck can you people call this anything but pro-consumer. You literally can try games you wouldn't normally without any tether to a timed demo, or buyers remorse.

If your concern is that Devs wont make enough money via sales?- MS literally pays devs to get games onto xbox. Dev's can literally take that money and continue to build the game, or invest it into their company for growth. How they spend that money is on them- the dev. If a dev goes under after putting their game on gamepass- after getting paid to do it, thats a dev problem. People here mistake the idea that somehow MS gives these devs a 100 bucks and a packed lunch to bring their games over, and then if they struggle, "oh its was xbox's fault cause of gamepass"

If there is anything you want to complain about it should be the fact that a digital library/stores pushes the medium further into digital over physical. A trend that seems to be inevitable given that PC gaming is virtually 100% digital. And after all, the pc master race is ultimately where consoles want /shoud be ecosystem wise right?
This isnt solely because of gamepass. This is because there are more profits to earn for digital vs physical in terms of production spending. You should be taking this argument to the publishers and devs of the games you enjoy to continue to offer both and to make digital options cheaper. Because a 100+ collectors edition for a physical copy is significanty worth more than a digital collectors edition without any physical stuff.

You’ll never get a clear answer as to why GamePass is bad, the goal posts have continuously shifted since the service started.

 

[Not_A-Cop_Maybe]

no, I never said I held it for 5 years. I said in the last 5 years of my trading.

Have you considered you are shit at trading? The stock as a whole has gone up a 150% in 5 years.

If you have been trading MS for the last 5 year, you'd be up in your positions. Even if you only traded/held in the last 6 months, the stock has dipped what like 7 dollars? That's practically regular fluctuation for a stock that trades above $100.

From one Calgarian to another, stop being so paper handed

 

[Not_A-Cop_Maybe]

I don’t know why people are downplaying Indy when 1 in 6 people are playing it in a single month with the huge CoD drop as well. It will soon reach 5 million players and that’s somehow a bad game now? Throw a few more million on PS5 as well and that makes for great numbers on any SP title.

Yet Astro Sonys only first party title this year and apparently GOAT of GOAT has an attachment of what 1 in 35?

Fucking thank you!
Its nearly 5 million and the game literally came out like 2 months ago! Thats fantastic numbers for a NEW IP that just happens to have existing connections to a name brand.

The fact that this game also comes out on another console in a few months means this number will be higher. If this number goes up, that means more money was made.
How everyone doesn't seem to get that this is a win-win for Xbox confounds me. Any support this game gets only highlights the fact that a high quality product was put out.

Some reviewers called it their GOTY- a title that literally came out at the near end of the year.

 

[twilo99]

MS are the masters of spinning numbers and hiding facts.

Yes, that’s how they have billions in the bank… by spinning numbers