Microsoft Is Making An Astonishing $2 Billion Per Year From Android Patent Royalties

Microsoft is generating $2 billion per year in revenue from Android patent royalties, says Nomura analyst Rick Sherlund in a new note on the company.
He estimates that the Android revenue has a 95% margin, so it's pretty much all profit.

This money, says Sherlund, helps Microsoft hide the fact that its mobile and Xbox groups are burning serious cash.

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theBAWSE1686d ago ShowReplies(16)
bleedsoe9mm1686d ago (Edited 1686d ago )

console launches are very expensive sony sold every except shuhei yoshida's toupee to get liquid enough for their launch . funny thing about stock analysts they actually don't like companies spending money .

kneon1686d ago

It's not just the launch. If you add up the profit and losses since the first xbox Microsoft have yet to make money with the xbox. That kind of performance doesn't make investors very happy, that's why it's often suggested that they sell off the division.

bleedsoe9mm1686d ago

the first xbox was a loss leader just to get their foot in the door , the 360 and its services were very profitable

kneon1686d ago

The RROD cost them billions, they have yet to recover all their costs. If the xb1 is profitable early on then perhaps the breakup talk will go quiet. On the other hand if it does poorly then expect it to continue and potentially intensify.

bleedsoe9mm1686d ago

if you want to look at ms failed ventures xbox is not high on the list of things that are dragging down stock prices

AndrewLB1685d ago

What's hilarious is how all the Sony fanboys constantly rip micro$oft (<--example) for being incredibly greedy and how they rip off consumers, yet once you get back into the real world, you'd realize that Microsoft is currently about even on their Xbox division.

Bleedsoe9mm- No, the 360 was no different. Microsoft didn't "rape" consumers, "screw" gamers, or all the propoganda from uninformed idiots.

Sony has made far more profit from their gaming division, and to thank their lemming-like followers they release a console that can't do 1080p/60 as standard. At least microsoft has the excuse of not making any money off Xbox, so they couldn't go crazy on hardware this time.

kneon1685d ago


Whether or not Microsoft loses money has no bearing on whether or not they are ripping off their customers.

I don't understand how anyone doesn't see the fact that they charge you to access services for which you've already paid as ripping people off.

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Dehnus1686d ago (Edited 1686d ago )

That is because arsehole groups.. I mean "Activist Funds" like Value act only think in the short term. They rather stay in a slowly declining market of profit (Like MS and there Business services and Server software) then trying to get into new markets.

They forget for instance that MS knows very well that Servers are more and more moving to Open Source solutions. MS also knows very well that the consumer market is where the money is. THey also know that the time of "paid operatings systems" is also on their decline. Either you get an Open Source OS or you'll be using a cloud based system in about 10 years.

So what Value Act wants is basically delayed suicide, well murder as they will pull out with a profit before that happens. At the expense of a lot of scientists and Engineers now (MS research) and later the whole company... losing their jobs. They would make a short term very high gain, and get richer, while they socialise the loses for the company to the normal taxpayers in the form of unemployment costs and bailouts.

They did this before with Motorola and they aren't the only "fund" out there doing this crap. They defend it with sayings like "Cutting the fat!" or "We make them profitable again!" or "We make them more profitable!". But it is always a short term gain, and a long term loss.

Sadly that is what most stock owners care about. There are exceptions like Isoa Okawa (SEGA's stockholder after SEGA wend bankrupt for the n'th time) but such "sugar daddies" are rare.

The few companies that survived this and aren't sold off/bought out, are set back years. They either go bankrupt in the end anyway, or they take for ever to regain some form of "healthy business".

iceman061685d ago

The selling everything to get liquid had more to do with the change in paradigm from cell architecture to AMD chipsets. They had to build factories to build the Cell. Once those were no longer needed, they sold off those properties. True, Sony has a set of financial issues all it's own and they are currently addressing them through restructuring, less aggressive forecasting (stop guessing at the money market), and a new approach to consoles (less hit up front).
MS, on the other hand, had the issue of investors that didn't see the return that was expected with the Xbox brand. After 10 years of "heavy" investment, they keep seeing money being thrown at it to modest to no real gains. The issue is simply that they thought that they could get a fast buck and game's industry dollars are not fast. When they are, they must be carefully managed and applied to the future of the brand.

quarkist1686d ago

Console business is like a drug, you keep losing and still don't give up! :D

1686d ago Replies(2)
Games_R_Us1686d ago

Wow, some analyst says MS should drop out. Wow, thats amazing. Gee I am an analyst too, how about I predict Sony folds due to loosing 95% of its value since 1985? Here is MS with more cash in the world than most companies and this shit is spun. Anything for hits.

Yes, you got me to click.

Now deal with the trolls!

JustPlay41686d ago (Edited 1686d ago )

They probably should will they probably not becauses they have tons of money to cover the cost but none of it comes from xbox, why?

Xbox brand is worth 4.9 Millon

Micsroft as a company is worth about 230 Billion

Manic20141686d ago


The xbox brand is worth $11 billion at estimate. They have lost billions but since 08 they have been recouping the loss from Xbox live and the 360 slim sales.

JustPlay41686d ago (Edited 1686d ago )

@MMEHTA Sorry I was wrong website was bad i guess

devwan1686d ago

@MMEHTA "They have lost billions but since 08 they have been recouping the loss from Xbox live and the 360 slim sales."

Yes, trouble is they've gone and invested millions upon millions more in their next venture - xbox one.

This cycle can only end if they do so well that they break even and begin to generate real profit. I'm not sure anyone sees that happening right now with the fiasco that has been xbox one so far. It's been nothing short of a catastrophe.

Themba761686d ago

they will never catch apple keep dreamin.

sentury1111686d ago

Yeah the company they saved when they were broke.
Things change and MS is still very profitable.

JustPlay41686d ago

They will they never catch up to google more like it

mcstorm1686d ago

@JustPlay4 you do know Microsoft are worth more than Google? Also Themba76 no one can say they will never catch Apple as these things come in cycles. Look back 10 years ago and people would of said Apple would be worth more than Microsoft or that Samsung would of been bigger than Sony. The technology world can change over night and it goes round in cycles too. Look at Nokia who were untouchable but then along came the IPhone and it took the market by storm. Then everyone was saying Android will never be bigger than IOS yet it did.

It has also been said about Windows Phone but it is now growing and has 10% of the market around the world.

No one knows what will and wont be a success even in the gaming world its hard to say what will sell and what will not. Look at the stick the 3DS was getting and everyone one here was saying the PSV would walk all over it but Nintendo turned it around.

TheGreenMan1686d ago

@ Paul

You fail to understand how business works. It's about properly leveraging your assets and maximizing return on investment. The fact is, MS makes a much better return in its other divisions when compared to the Xbox. Investors see this and want MS to "trim the fat" and focus on its money-makers. The Playstation brand on the other hand, is quite successful for Sony (even though the company is not doing well as a whole); therefore, investors and analysts aren't calling for Sony to exit gaming.

iceman061685d ago

Think we said the same thing, in different ways!!! Bubs back at ya!

iceman061685d ago

Firstly, this is FAR from the first analyst to propose this. It's been reported multiple times. Second, IF we were talking about'd have a valid argument. Sony has not been turning a profit either and actually lost more money on the PS3 then MS did with the Xbox. MS has a shit ton of cash...correct. The investors want to continue a venture that costs them more than the effort and losses are worth!?!? See, that's the issue. WE see MS and think endless buckets of cash. Investors see MS and think...that's money out of MY pocket!
Personally, I don't think Xbox will fold. However, if there is not much improvement. There WILL be pressure to restructure, augment, and scale the operation to achieve a much better profit margin.

TheGreenMan1685d ago

Very well said sir....bubbles for you.

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