Submitted by RicardJulianti 822d ago | video

Rick Sherlund owns Pachter – ‘Xbox is cool, but Microsoft has not made any Money off this’

Furious Francis from Playeressence talks about Michael Pachter, his inaccuracy as an analyst, and Rick Sherlund's take on Microsoft's income with the Xbox brand. (Industry, Microsoft, Xbox 360, Xbox One)

Attached Video
iamnsuperman  +   822d ago
What is with the creepy conspiracy theory music....

Also I am not sure what argument you are making in this video. It is the same one point for 10 minutes over and over again. Also when you thought you one upped him by talking about E-shop sales, you completely missed the point. The E-shop did come too late. It should have been around when Sony and Microsoft showed off their stores. That was the point pachter was making. You theory that he is wrong because the store sales are soaring is just mind blowingly stupid. That still doesn't change the fact the store has only come in 2012 and not years ago (when these things were new)
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AbortMission  +   822d ago
Dude, playeressence is a Nintendo fanboy website lol that Furious Fanboy clown has been exposed as a fanboy by some guys on YouTube. This is the same guy who claimed Pikmin 3 is a "system seller" and also claimed that 3rd parties are "scared" of Nintendo. They're nothing but extreme pathetic fanboys trying to justify their purchase *cough* Buyers Remorse.
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RicardJulianti  +   822d ago
Right because when Pikmin 3 released it didn't help move Wii U systems.

Try harder.
chadboban  +   822d ago
So then... what are you exactly? Every time I see you in the comments (I don't follow you around so I could be wrong about this) it's most of the time something negative.
AbortMission  +   821d ago
Right because a measly 20k jump in console sales for a Nintendo game coming out with no competition is such a "system seller" Lol. I love how you fanboys downplay terms like "next gen" and "system seller" just to accommodate for the Wii u's lacking hardware/sales.

And I only comment "negatively" on fanboys.
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chadboban  +   821d ago
"And I only comment "negatively" on fanboys"

Not from what I've read but whatever. I get so sick of these console wars anyway. They make grown ass folks act like damn children over which console is DA BEST. It makes me sick the way some of you behave.
BattleAxe  +   821d ago
Look out, Francis is on the war path!

Let's just get this out into the open. And just so people are aware, I have decided not to buy a next generation console at all, so I don't have a dog in this fight:

#1. Compared to Xbox Live and the Playstation Network, the E-Shop IS years too late. Both Sony and Microsoft have brand recognition associated with their respective market places and social ecosystems. Meanwhile, nobody outside of hardcore Nintendo fans knows what the E-Shop is, or even what the Miiverse is.

It's clear that when the Xbox One and the PS4 launch, all of the attention this holiday season will be focused towards Microsoft and Sony, but Sony in particular. At the end of the day when you look at worldwide numbers, the PS Vita is selling better than the WiiU based on year to date sales, and the funny thing is how people are talking about how bad the PS Vita is selling.

It's not complicated, the WiiU is in serious trouble, and so lets just hope that Nintendo's upcoming software releases can change the tide. Even if there is a large sales spike in Nintendo's hardware, it will be the hardcore Nintendo fan that buys theses games, and who will ultimately buy the WiiU. I don't believe that the WiiU will attract new gamers on anywhere near the scale of what the PS4 will, or even the Xbox One (unfortunately).

#2. Steve Balmer should have been fired years ago, and it's good to see him announce his departure. Xbox One was a complete public relations disaster, and I'm glad that they are turning back some of their policies that they originally announced around E3. I believe that Don Matrick and Steve Balmer were really holding Microsoft back, and I think there may be a great opportunity for Microsoft to chart a new direction once Blamer has finally left the company.

Personally I don't think Microsoft should leave the gaming industry, but it would make sense for them to drop the Xbox and concentrate on the PC. Recent news of Microsoft hiring a former STEAM executive to take charge in redesigning Games For Windows Live, leads me to believe that Microsoft might actually have something good to offer on the PC at some point in the not so distant future.

This would be great news for PC gamers who want to play Microsoft exclusive games on their PC's, and who knows, maybe they'll adopt a STEAM-like approach to doing business on GFWL, kind of like how EA is trying to copy STEAM's success with Origin. The great thing with Microsoft is that they have all of the assets and resources to put something great together for PC customers.

I say ditch the hardware (Xbox One) and concentrate on the PC, especially since PCs are the way of the future, and eventually we'll all be playing Playstation on the Playstation Client for PC at some point in the next 10 years anyway. I think that once Iwata finally gets the boot (and deservedly so), we'll all be playing Nintendo games on a Nintendo Client for PC, or maybe on Steam and Android devices. Nintendo is missing a massive market of consumers by keeping their games on Nintendo hardware only, and shareholders aren't stupid, they'll demand that Nintendo adapt to the new realities that todays technology offers, otherwise Nintendo will fizzle out into the dustbin of history.

The Wii was a fad, and they will never make another home console that will sell up around 100 million like the Wii has done. Soccer moms, senior citizens, baby boomers and casual gamers will not be buying the WiiU as they might have done with the Wii. Those people are playing on their smart phones, tablets, facebook and the Wiis that they bought 4 or 5 years ago. It's time to change the business strategy, and Francis, I know that you know that way deep down inside, you know I'm right.
Theyellowflash30  +   821d ago
All of that rambling and you proved nothing BattleAxe, if PSN and Xbox Live were so profitable, why isn't Microsoft and Sony making any money in their gaming divisons?
Belking  +   822d ago
This Rick guy is delusional if he thinks MS hasn't made any money off the xbox brand. XBL alone takes in over 1 billion a year...lol Xbox360 was making profits years ago.This stuff is hilarious.
Biggest  +   822d ago
You may not have a full grasp on the way business works. Profit on each device sold does not equate to overall profit. Xbox may be "making money" as we speak, but Xbox has a lot of loss to cover before it becomes actual profit.



Dlacy13g  +   822d ago
The problem is the Xbox has traditionally been lumped into The "entertainment and devices" division which includes much more than just Xbox. The loses in that division can be attributed to other things like Zune, Windows Phone (so far) Surface RT, and the like.

MS will be interesting to watch in the coming year though as they phase out Ballmer and whoever the new chief is steps up.
iamnsuperman  +   822d ago

That is completely true and it would be interesting to see how Microsoft reacts to this as that division needs a shake up. The question is what do they get rid of and what do they focus on. Tablets (despite the losses) and Mobiles are probably to important to pass up especially when Microsoft and consumers are moving towards a unified OS system but the xbox penetrates the home space (they need to see if that is still important now). Some people have said they should focus on a software future than a hardware future. It is going to be interesting what the new boss does.
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Belking  +   822d ago
Dude, I know how business works. Every division in ms has lost money. This doesn't mean they aren't making profits. Xbox division makes money off games,xbl, and additional stuff. Why you think sony has come aboard the online charge model....lol Xbox division does well. Believe that. Now sony on the the other hand is another story. It's pretty obvious they aren't doing as well. They didn't even start profiting on ps3 til 2011. Those profits were totally wiped out by ps4 development. That's why they had to sell off building assets to help with the cost and stay afloat.

Dude, you are misinformed. xbox division is profitable.


And that was way back in 2009...holla!
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Mikeyy  +   822d ago

Wow, just wow. Its funny how people have ragged on the ps3 for "not making any money". While ignoring the fact that the PlayStation brand is also in an entertainment division that had numerous products of varying performance. Then they turn around and use that same defense for the Xbox brand. MS doesn't have anywhere near the amount of products in its entertainment division then Sony has...
Manic2014  +   822d ago
They Did to better for the 1st quarter this year: http://www.vgchartz.com/art...
Dlacy13g  +   822d ago
@Mikkey yes the playstation line of products is part of the Sony Consumer and Products division... Both companies hide other devices and costs with in these divisions. That is why when people start trying to quote financials I question their sources. If you drill down on either company you can find specifically how certain hardware has done but far too often financial quotes are for the divisions as a whole and not the products and specific services they offered.
Muerte2494  +   822d ago
Then why propose a sell of specific part of that division if that's the only part that's profitable? I mean, why would investors single out Xbox Division only?

Don't know this ultimately doesn't matter. Xbox One will launch with a pretty good launch lineup. I guess this is why they aren't dropping the price. Kinect needs to be a success given all the R&D money that went into it.
n4rc  +   821d ago
Your right... But the value of the Xbox brand I believe is a marketing tool.. It draws people to other Microsoft services and gets their name into the minds of young future customers..

They didn't enter the space to make billions.. They already do that.. its a promotional tool imo
porkChop  +   822d ago
The Xbox brand as a whole has yet to make Microsoft money. They're still trying to recoup their losses from over the years, losses that are in the billions.
MonkeyNinja  +   822d ago
1 billion a year minus ads, money-hats to devs for timed-exclusivity deals, shady deals with the media, paying for celebs at conferences...

What he's trying to say is that compared to Microsoft's other divisions, the XBox brand barely turns a profit, so Microsoft would be better off handing it over to a company like Samsung. I agree.
RicardJulianti  +   822d ago
Here's the thing though.....MS may have been turning a yearly profit back in 2009...and possibly even SINCE 2009...

BUT, they have not posted a net profit for the lifetime of the 360...or the Xbox brand in general even with games, XBL and so forth. That's what Rick Sherlund is getting at when he says they haven't made money.

They may have spent less than they earned YoY, but LTD is a disaster. I wouldn't be surprised if losses are close to $10bn honestly.
aawells07  +   821d ago
It's funny how you criticise Pachter yet you're doing the same exact thing.
RicardJulianti  +   821d ago

It's funny that I'm not the creator of the video. I simply posted it here.
3-4-5  +   822d ago
By making money I think he is referring to profit.

They overspend hundreds of millions of dollars.

They spent about 200-400 million on this connect BS and they will NEVER recoup that money from JUST kinect products.

That isn't a smart way to do business.

The thing with xbox is, it's good, it's solid, but considering who Microsoft is, it should be a whole lot better as a brand.

I love my 360, but there have only been a few games that really impressed me this gen.

Everything that is missing from the xbox 360 can be found on the PS3/Wii or handhelds.

360 is great for sports games & FPS, which I like, but there aren't many good RPG's, or action adventure games or 2D/3D platformers, or random various genres we haven't even thought of yet.

It all feels watered down compared to the games I played on the OG Xbox.

We didn't get anything even close to Crimson Skies this generation.

Nobody has topped that game or eve come close yet in terms of online multiplayer fun and it's addictiveness.

80% of the games on xbox 360 are souless and shouldn't have been made or should have been made much differently.

Once again, 360 is solid, I've had great memories and experiences on it, currently running through Borderlands 2 for the first time and liking it, but it's not enough.

All the game types from SNES/GBA/PS1/N64 era were abandoned or changed so drastically that they aren't even fun any more.

PS4 seems to be going back to the drawing bored and realises " Hey, we've been forgetting these 15 genres that people love "
n4rc  +   821d ago
People need to realize one thing....

All these analyst and youtube economists all want to talk about what's bad for bUsiness and how shortsighted ms is..

They are one of the most profitable companies in the world and have been for what? 30 years now? these people claiming to be experts couldnt hold a candle to microsoft in terms of success..

Its absolutely ridiculous.. When your company rakes in 10+ billion a year.. Then you can talk about how little microsoft undetstands about business
kewlkat007  +   822d ago
Microsoft has been making money off Xbox division over the last 5 years but they are still in the RED as a whole because of other factors.

Counting RROD, devices like Zune, Surface and the "initial brand investments" has kept them in the Red.

I think, those device are all in the Entertainment Division.
Eddie20101  +   822d ago
This guy is not very accurate on what he is saying but as far as Microsoft making money from the Xbox division he partially correct.

Microsoft has made profit on sales of the system and games but they have never actually recouped the initial R and D investments in the division which were in the billions and were probably written off long ago by Microsoft but in the end was still money used to build the business and money they never got back.
assdan  +   821d ago
Have you heard of the XBOX? That thing was a MASSIVE money pit. And the profits of the 360 still hasn't made up for it.
No_Limit  +   822d ago
Can't believe I am saying this but Pachter is right on this one.
Eddie20101  +   821d ago
Nintendo is still making money and for the most part since the Wii, have been. Just there profits have went down a considerable amount. does not mean they should get out of the hardware business.
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Xsilver  +   821d ago
its called 3ds thats whooping ass
WrAiTh Sp3cTr3  +   822d ago
Pacther is right. Another thing I'm just now realizing is that he was right about PSN charging for online gaming.
KwietStorm  +   822d ago
Anybody could have assumed Sony would charge for PSN. In fact, a lot of people did. XBL subscribers year in and year out have told not just Microsoft, but the industry, that they are fine with it. So now Sony is using a similar model. The only reason they didn't do it sooner is because the gamers never would have accepted it in the middle of the generation. But look at the reception now. PS4 can do no wrong, and because PS+ is such a great service, it can be overlooked. Pachter just made an educated guess, that's all.
WrAiTh Sp3cTr3  +   821d ago
They way I'm interpreting your comment is that Sony added model because they seen how good they were doing with PS+. That's fine, but Pacther predicting this long before PS+ was thought about. I personally would have never thought Sony would go that route and I'm still surprised.
iceman06  +   821d ago
I agree. Seeing as though it was an "untapped" source of revenue when Xbox was released and, as you said, gamers didn't seem to have an issue with it...it was a pretty easy guess. Sony, just like MS, need as much revenue as possible. They didn't have a lot of non-traditional revenue sources outside of Home. Thus, they had to do something to generate revenue. They put out the PS+ service and it seems to be gaining a lot of steam heading into the next generation. It only makes sense to wrap the multiplayer into the service that way you can generate revenue and still trump the competition by offering a little something for the troubles. That being said, I hate that they have to do that...but I understand fully that these businesses aren't charities and have to make money some way.
KwietStorm  +   821d ago
No that's not what I'm saying. I'm saying paying to play online on PS4 has pretty much been accepted by the gamers themselves, because of a combination of PS+ being so good, PS4 being so widely appreciated this early, and just not having issue with it. The reasons Sony went with it, besides the obvious constant revenue stream, is because of the necessity for an upgraded infrastructure, in compliance with many of the new features coming with the system and network. If Sony made boatloads of money off PS3, then MAYBE they wouldn't look at it as a necessary source of revenue, but I'm sure the income will be a large help regardless.

As far as Pachter goes, yea regular gamers were saying the same thing before PS+ too, because Sony's financial problems were persistent for a good while, and everyone already knew XBL was a good source of revenue for Microsoft, so it didn't take a crystal ball or an insider to presume things would change. It's not like he KNEW this would happen. He makes a lot of educated guess. Some turn out to be true, some make him look like he has not a clue what he's talking about.
Dlacy13g  +   822d ago
lol... this guy is funny. Full of sh*t mind you but he is funny to listen to in a creepy way.
vikingland1  +   822d ago
This guy is going to educate us guys? what a statement.
hemmo1986  +   822d ago
Xbox business, Microsoft’s EDD lost approximately $4 billion over the course of the original Xbox’s life. That trend continued for the first two years of the Xbox 360, with EDD added another $3 billion in losses, before the division turned around.While the Xbox business been profitable in recent years, EDD’s financial contributions to Microsoft pale in comparison to the rest of the company. In fiscal year 2013 the division pulled in $848 million in profit (up from $380 in fiscal 2012), but that only accounted for 3.17% of the company’s total operating income. For comparison, Microsoft Business Division and Windows Division reported $16.2 billion and $9.5 billion in respective operating income for FY 2013.
Bias1973  +   822d ago
Sounds like a Nintendo Fanboy justifying a purchase. Pachter is not the only person saying that Nintendo is doing poorly on the console front. You are deflecting the problems of what Nintendo is doing, by screaming about Xbox? Xbox is building a brand, they spent billions getting the original Xbox on shelves, red ring of death hurt the 360, but Microsoft got that unit in 70 million homes and climbing. I can tell you one thing.

Sony sure takes them seriously, it is why the PS4 is 399.99, it is why even with the consumer hate for the Xbox One, preorders here in the states FLEW off the shelves. It's why Sony is cuddling up to indie developers, and being as aggressive as they were in Playstation 2 era.
WeAreLegion  +   822d ago
Exactly. Their pockets are deep. They can buy the affection of gamers. They don't have to earn it.
KwietStorm  +   821d ago
Of course they take them seriously, why wouldn't they? But everything Sony is doing right now is not Microsoft *focused* . The PS4 is also a direct result of the PS3's shortcomings. It's a different industry today, and they've been proactive in adapting their approach to it.
Dan_scruggs  +   822d ago
N4G Logic.

Nintendo posts 500 million loss - YOU SHOULD QUIT MAKING HARDWARE

Sony loses 6.4 billion last year - GREATEST COMPANY EVER PWNS THE COMPETITION

Microsoft's Xbox division has lost nearly $3 billion in 10 years - CANT WAIT FOR THESE GUYS TO DIE
Misaka_x_Touma  +   822d ago
so true
Eddie20101  +   821d ago
Not accurate on the Playstation loss. Your showing company wide Sony losses not just the Playstation losses.

IT was 2.8 for Playstaion division for the full year 2012. Partly because the hacking problem.

Sony the company lost 5.8 billion. The number quoted above was an estimate by Sony for the year.

As far as Microsoft goes there profit VS expenditure is very low and they never recouped the R and D money from starting the Xbox division, Which was in the Billions.
Not surprised though.
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Dan_scruggs  +   821d ago
Yeah that would firmly put Sony is last place in terms of profit. As Sony lost in a year what Microsoft lost in 10. Also Nintendo's loss was their first in 30 years(but they are doomed apparently)and Sony had 6 consecutive years of losses and Microsoft has had steady company wide profits over the course of the Xbox 's life that dwarf both Nintendo and Sony.
Eddie20101  +   821d ago
Not true Nintendos profits were much higher than Xbox's until that last couple of years.

For the amount of money that Microsoft throws around to make The Xbox didvision profitable the profits are very small.
zeroskie  +   822d ago
This guy is some crazy conspiracy theory fanboy. All he's doing is repeating what other people say over and over again, what does that prove?

I don't really like Pachter, but I have to agree that Nintendo hasn't made the best decisions recently. Now that doesn't mean they should exit hardware, but yeah they should rethink their strategy.

Get a grip Furious Francis, your video has even less evidence and reasoning than one made by Pachter. Smh.
Izzy408  +   822d ago
This guy would make a perfect candidate for Thorazine.
vikingland1  +   822d ago
LOl I had to give you a bubble for being funny.
a_adji  +   822d ago
The guy gave an opinion with proof unlike patcher and so why is he being knocked even with evidence by you fan boys on here. Truth hurts but it's the nature of the beast and to be honest nintendo know the business very well unlike Sony who got into the industry out of revenge for the previous Nintendo CEO and MS go came into the market so Sony didn't dominate. We all have our system of choice but let's not forget that it's a business first and foremost and these companies aren't your parents.

Only problem is he got the quote wrong. It was not haven't made any money but rather they've not made money.
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kewlkat007  +   822d ago
playeressence= Nintendo hardcore fanboy
Theyellowflash30  +   821d ago
Activemessiah  +   821d ago
Furious Francis... never seen him furious in any of his videos... I feel misled somehow.
ajax17  +   821d ago
Wow, what a lame ass video. How the hell did this get approved?!
Theyellowflash30  +   821d ago
Cause it's cited, sourced, and true. Just cause you don't like the outcome doesn't mean it shouldn't be approved.
edonus   821d ago | Spam
SonyAddict  +   821d ago
Pachter talks through his ass as always!,I stopped listening to that old fart a long time ago and it's great to see him getting owned!..made
my day that did!.

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