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.

[bleedsoe9mm]

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 .

[kneon]

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.

[bleedsoe9mm]

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

[kneon]

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.

[bleedsoe9mm]

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

[AndrewLB]

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. http://www.forbes.com/sites...

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.

[kneon]

@AndrewLB

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.

[Dehnus]

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".

[iceman06]

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.

[quarkist]

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

[Games_R_Us]

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.
Congrats.

Now deal with the trolls!

[MightyNoX]

https://i.chzbgr.com/maxW50...

:)

[JustPlay4]

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

[Manic2014]

Seriously??

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.

[JustPlay4]

@MMEHTA Sorry I was wrong website was bad i guess

[devwan]

@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.

[Themba76]

they will never catch apple keep dreamin.

[sentury111]

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

[JustPlay4]

They will they never catch up to google more like it

[mcstorm]

@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.

[TheGreenMan]

@ 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.

[iceman06]

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

[iceman06]

Firstly, this is FAR from the first analyst to propose this. It's been reported multiple times. Second, IF we were talking about SONY...you'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.

[TheGreenMan]

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

[iceman1346]

$2 Billion?????? that's alot of $$$$$$$$

[BobBelcher]

analysts... psh...
http://www.destructoid.com/...

[MRMagoo123]

lol destructoid.

[devwan]

lol basing "research" on eBay listings

[MajorMayhem70]

@ Paul B
Second time I've read a comment of yours and it's the second time I agree with you. You alright with me man.

This site is a trip. Any and everything negative concerning MS or XB1 and it gets plastered on Front Street. Smh.

I don't want to see either company lose. Competition is always good.

[Tctczach]

I know. There was an article how indie devs get the unity engine to develop on for free(which is amazing). But it wasn't on the front page because it was titled in an awful way and COD still remains 720p.

[ELpork]

Msoft is essentially one huge slush fund. Xbox is just one small portion of the company, I highly doubt that any of that is being taken seriously... Or maybe it is, fuck if I know.

[ziggurcat]

this is about as ridiculous as suggesting sony drop their playstation division...

[cyhm3112]

i hope they will drop it. Then maybe Sega can come back with a new console. With xbox' presence, no way it could happen.
I like Sega's consoles much more than MS's.

[hellvaguy]

No way sega comes back as a console if ms bows out. They already lost all investor confidence and consumer credibility for hardware. Plus they already whored out all thier exclusives that gave them an edge in the first place.

Apple, Steam, or Google maybe, but sega's days have long since past.

[tudors]

Sony Loses $2.2 Billion in Market Value After Forecast Cut http://www.bloomberg.com/ne... They all loosing money, why do you think they want to keep moving forward within the DLC arena? and even though they are loosing money the forecasts are better, anyway I think MS makes something like 2 billion on android royalties? though I would need clarification on that.

[christocolus]

lmao...i dont see that hapening atleast not in the next decade..

[dansdooz]

yes of course they are losing so much money with consoles! what a load of bs, if the console business wasnt profitable for them do you think they would of made another one?

[MikeNike310]

Wow if this is true then Microsoft is only in it for sport... In some strange way I really respect that.

[xrachellouisex]

if they make what they need, and are selling everything made - at a profit, then this seems unlikely.If anyone is, it is sony with PS4 - they may be outselling MS's xbox, but every PS4 is sold at a loss. If they make what they need, and are selling everything made - they still have overall loss, whereas MS has an overall profit. even if it's a very small profit, it's still profit.

[Tctczach]

I think Sony has cornered enough of the market to be profitable. Arty least with their game sales. It seems their support from this website alone would keep them afloat.(haha) Even though the company practically bleeds money....

[Tctczach]

Their Android royalties pretty much pay for the xbox. Think of it like they put their hands into a bank vault and just grab money. Thats how profitable that is to Microsoft. This is why they want to spin out the xbox part of the company. They feel like it could become profitable....just not android profitable.

[EffectO]

Only a fool would believe this.

[BattleTorn]

What a stupid false article..

It's just bait for the drones to come and reveal that they true desires are for Xbox to literally fall off the end of the earth.

You commenters like TemparDante (below) who'll say "Mark my words, people buying the Bone are going to be screwed hard" 'I knew it! Xbox is DOA'

Proof:
http://www.vgchartz.com/art...

[kenshiro100]

An analyst probably knows more than both of you combined. Its not news you want to hear so you scream b.s.

Just LOL.

[RealtorMDandDC]

@Battletorn.

Business Insider is actually a very reputable publication.

investors has been putting pressure on MS to spin off the Xbox brand.

Links:

Date 11/06/13 http://www.ubergizmo.com/20...

Date 11/01/2013
http://www.geekwire.com/201...

Date: 10/31/13
http://www.ft.com/cms/s/0/3...

[humbleopinion]

Yet there are many fools here in N4G and outside.

Go here:
http://www.microsoft.com/in...
and search for "Entertainment and Devices Division"
Microsoft has increased their revenue from the Xbox division (which also includes skype and surface) by 10% in the past to years.

It makes around 10 BILLION DOLLARS and had an operating income of close to ONE BILLION DOLLARS the past year. It was profitable in the past 4 or 5 years. Why would someone in their right mind drop a business which is so profitable!?

But this is what happens when every idiot can declare himself analyst, without even being able to comprehend quarterly and annual reports. And for every fool you have a trail of idiots that will believe him because "it was written on the internet so it must be true"

[Manic2014]

They have lost billion's during the years but since 2008 they have been gaining a steady profit from the Xbox division, though they still ned to recover the loss from RROD.

[tiffac008]

These analyst are not looking at whatever profit the Xbox division is doing right now. To them the total loses of the division since the Original Xbox is all that they see, which is not fair since MS has proven the division is now profitable. These analyst just can't wait till the division finally recoups all the loses at the beginning.

[iceman06]

But, that's their job. It's not about a concept of "fairness". It's business. If a business has one area that is losing money while the others are not. It's only natural to analyze what the issues are and how they can be changed. The investors have been pressuring Balmer and the likes for years to make money or get out. They want to see profits akin to what their other divisions are making. They could give a damn about what the Xbox 1 CAN do or how good Titanfall is. Their bottom line is...will it remain profitable or will it take money out of my pockets?

[tiffac008]

But its no longer losing money Ice, what the analyst are getting at, is the Xbox division has not yet recouped all its loses since the Original Xbox. That's different from not being profitable. They want a fast return on the Xbox investment which I understand but to say its not profitable is misleading.

[Hazmat13]

well sony was also in hot water after the production cost of PS3, seems Microsoft is also feeling the burn. hope they stick with X1, i mean I'm a playstation first but if sony just went under that would suck. so hope they stay in the race. Long Live Gaming!

[tigertom53]

LOl enough said

[mhunterjr]

Nah, if it wasn't for RROD, Xbox division would be considered a cash cow, there's no way investors would overlook that potential so long as such faults are ironed out. They are selling the Xbox One at no loss, are looking to bolster their cloud service, and are finally realizing their goal of bringing windows to the living room. The next generation might be delivered exclusively in the cloud, there's no way MS won't attempt to maintain this foothold.

[Dehnus]

Ah, that investment group again, Value act. The same guys that ruined Motorola and turned it into a sham of it's former self. Getting thousands of people fired. Oh yes on the short term it is so much better to drop it, and stay in a market of server software and business services that is slowly declining for you in favour of a superior open source based ecosphere.

But hey at least for those few years... you had your dividend and your profits while MS Research Employees lost their jobs on top of other engineers from the other departments. Only a gloom omen for the rest of the company to go bankrupt and like Motorola .... be just bought out for their patents.

Investment groups like Value Act make me puke! They are what is wrong with the economy, they say they slim things down to "improve them".. but their track record clearly shows it is always a short term gain for them, and the losses get paid by the government/society in manners of bailouts and unemployment help.

Fuck you Value Act and the bleeding arse you and your kind of people come from.

Sorry I feel quite strongly about these kind of "funds" and "Activist Investment groups". After seeing what they did to great companies like Motorola (the minds behind so much technological innovation). It would be a shame if any group of used tampons like that, would ruin a company like Sony, Microsoft, Apple, Nintendo, Dell, etc.

This isn't capitalism.. this is phoney capitalism which is very close to mobster like behaviour.

[TemplarDante]

Mark my words, people buying the Bone are going to be screwed hard when MS leaves the industry. They did it with (ironically) the Xbox 1 (OG).
The new CEO will be handpicked and the Xbox division will be spun off, that is to say annexed from MS and run as a seperate company. It wont last if its posting losses like this!
In any case, If I was an MS investor, I would be pretty pissed if I read articles like MS spent $100000000 making the Bone controller etc. Wasted expenditure. Its going down and its going to be one hell of a boom when it does.

[Cueil]

if you're a MS investor and you don't understand that Microsoft doesn't give a shit what you think then you've got something to learn

[boribori831]

I hate fanboys especially the Sony kind

[BX81]

I do t think ms would be giving away free xbox ones or KI if this was the case. Now if he said we could make that much more by doing something else I could believe that, but to make it seem like the division is leaking that much money? That I don't believe. And who ever wrote this article get off your ass and do a damn interview with direct questions. I'm tired or reading half assed articles with words like "suggested" . Either he said it flat out or he didn't. A monkey can type on a damn keyboard gentlemen, that puts you in the same group. If you wanna be a journalist go out there work for it and get hard facts. If not you're just a blogger or the monkey with the keyboard

[Ma1nframe]

I've said it before and I'll say it again. The "XBOX" brand has not made micro$oft one red cent in all its years of existence. This is a FACT! Nothing surprising in that article.

[Cueil]

if you think that then you're a fool... it's been the Xbox business covering up loses Xbox Live brings in more then this by itself

[NateCole]

I find this odd. I thought MS were doing well in the console business

[solidboss07]

Their losses are soon to get much worse with the Xbone in retail.

[rapidturtle]

I highly doubt that the Xbox is loosing that kind of money.

[Blachek]

They aren't, the original article is from an analyst for Nomura Holdings, a Japanese Financial company that manages some of Sony's assets.

He made a reference that wasn't illustrated in the nowgamer article about losing money over a selective period of the 360's life cycle.

Sony FAP bait.

[makeaveli]

Heres the thing… the only reason that we gamers can rejoice this generation of having a PS4 at 399.99 and not 599.99 like last time is competition. If it wasn't because MS Xbox 360, who knows how much we will paying for a PS4 599.99 ? 999.99? who knows.. At the end of the day competition is good and helps keeping everyone in check. To bad MS decide to use Sonys Playbook this generation and became the arrogant one and now Sony seems to be more humble this time around. Love Xbox but damn MS what the F you're doing ?

[Belking]

Bogus..lol we know that's not true. MS just released their numbers not to long ago.

[Jdoki]

Strange. I thought after MS restructured the Entertainment division a few years back that the Xbox was proving profitable for them. but I don't follow sales very closely so probably I'm wrong.

I know the initial costs to get in to the console marketplace was about 5billion, and then there's the billion for RRoD warranty - but these were written down.

If Xbox really was losing 2billion a year I have no doubt the big shareholders and investors would all be up in arms.

[Blachek]

The article references the loss being hidden in the books, but I don't believe that for a second.

If I had a vested interest in a company, I would imagine they would be capable of illustrating to me how each division is performing.

It's silly to think they wouldn't care to investigate the performance of their own investments.

[gamer2013]

Every time Sony wants to do something with PlayStation they have to sell a building and MS is in trouble? So all the years of charging for everything including online play have amounted to nothing but debt for MS? I call bullshit on this article! A gaming site posting this kind of flamebait garbage makes me sick of the fucking Internet.

[PsychoSupaman]

Minima's pic is the first thing you see when you click the link..?!? Ok,, whatever..

[Jamaicangmr]

This guy can't be serious smh! Total BS article he only came to that figure if you remove everything else that's profitable. I assume by this that Microsoft is making a profit off Xbox360 and yes they aren't making money off X1 but thats not out yet.

BS.

[NMEMEDIC]

Why would anyone believe this? This website is full of made up crap and you people eat it up.

[NMEMEDIC]

What a fake made up BS.

[FrigidDARKNESS]

This isn't true just saw a report the xbox games division is making money.

It is Sony that is losing money on all fronts with losses in their games division.
http://www.bbc.co.uk/news/b...

[Nekroo91]

Oh your also an expert in MS financial department?! Your awsome Frigid.../s

http://www.sony.net/SonyInf... this looks like sony is losing money with games?! its actually growing xbot.

And guess what xbox is almost gone and why?! because their biggest investor who actually invested 2 billion last year, wants to sell their stocks.

Next time dont make a fool of yourself once again, like everyday

[ATWILL]

You're right, Sony's Playstation division is making money and will make more now that PS+ is needed for MP. However, the company as a whole is losing billions year after year...maybe that's what he's getting at. Xbox isn't going anywhere soon either...Xbox is profitable.

[FrigidDARKNESS]

No next time you should know that their is no growth when Sony shares plummed by 11% . The BBc article is correct you can't spin it.

[Nekroo91]

sony as a overall company, not the gaming department which is growing. and if you think that MS is doing alright...with the failure of surface and most of their products.

dont forget Samsumg only needs 5% to own the xbox and they have enough money for that, if a major investor wants to sell their stocks MS will lose the xbox...

[OC_MurphysLaw]

I think this analyst is taking things out of context. This year R&D costs are hitting the books plus MS said they set aside $1 Billion in a game development fund. That money would have to be accounted for and show up as an expense. Plus you need to factor in the deal they just made to buy Nokia Phone... It all adds up

[TerryMMA85]

You can't make an omelette without breaking a few eggs.

Xbox will do just fine this generation.

im more concerned with the next gen after xbox one.

[TheLastVoiceOFsanity]

as A NINTENDO FAN, i knew this business model that sony &microsoft are using couldn't possibly be a good idea. maybe if the xbox go's away its only a matter of time before sony goes back to the normal business model where you make a profit on your system. i also think sony, microsoft,& nintendo should lower the price of all 3rd party software depending on how cheap it is on pc. it doesn't make since that console gamers pay $60 for a game and pc gamers get it on release for as low as $40 & then after that discounts.

[CC-Tron]

FUD.

[ATWILL]

That's bullshit. There have been plenty of past articles that say Xbox is barely profitable. Software and Xbox live make up a lot of the profits but that's not surprising.

[jgrigs09]

It's funny because Playstation 3 was costing more than that. Love that they ignore that. Also, Xbox one is predicted to break even. As much as people love to deny it, they are most likely going to break even. As for the PS4, they are predicted to lose 60 dollars per console. Why ignore this n4g? A share also adviced Sony to separate their entertainment department including PS3

[jgrigs09]

Share holder*

[MCTJim]

Just read the article. FUD at its best. The division is profitable...its not operating at a loss. How did this get approved?

I can same the same thing about Sony..if they dropped the PS4 they would be profitable because all their money comes from selling off real estate. See I can spread FUD too.

[FrigidDARKNESS]

Of course its more lies and FUD from the folks on the other side. The NASDAQ reported that the company is making money.
http://usfinancepost.com/mi...

[dlocsta]

Any idiot who gives stock to this is truly that, an idiot. Xbox is profitable from the revenues from Xbox Live alone. How the hell are revenues generated from royalties supposed to support THREE device areas!?! If that is the case Microsoft will not need to sell a single Xbox One and live off of the royalties for the use of DirectX in Blu Ray players on Sony devices. <Sounds completely stupid doesn't it? That is because it is. People, get your heads out of your a$$ and stop believing everything you read. Oh! And take a damn business class!

[ATiElite]

CRAP STORY!

MS is making a KILLING on licensing fees on the X360.

$60 to play online is FREE money for MS.

Every Xbox360 sold for like the last 5 or 6 years has been ALL profit for MS as they were able to make the X360 cheaper faster than expected.

COD averages 13m in sales on the Xbox360 and if every COD gamer buys a year of XBoxlive that right there is $780,000,000m that goes Directly into MS Pockets not too mention another $260,000,000 in Licensing Fees it makes from 13m COD units sold on Xbox360.

MS may have lost $2B in research and Design for X360 or XB1 and also have to pay for Xboxlive expenses but TRUST ME Microsoft makes that back up in a hurry.

if anything Microsoft Surface and CRAPPY windows phone is hurting MS, I haven't seen anyone with those.

I can't go 3 steps without seeing an iphone, ipad, Kindle, Samsung Galaxy Note, Samsung Galaxy Phone, with the user wearing Beats Headphones. it's so crazy it's to the point where I'm thinking they are just handing these things out for FREE somewhere and I'm missing out LOL

[Nintenja]

The only company to profit from console sales is Nintendo. Sony and MS have to sell low. To make a profit would make the system cost to much.

[ThatCanadianGuy514]

The xbox Done

[rainhell77]

Sony is right behind them Google it!

[Blachek]

This isn't an independent overview. This is an agenda, and a poorly argued one. The source is a "Financial Analyst" with "Nomura Holdings" who is a financial constituent of Sony, both Japanese owned companies with a similar vested interest. ( http://www.bloomberg.com/ne...

If you want what makes sense, follow this logic. Microsoft lost a ton of money with the launch of the last console generation with the failure of many units... they swallowed the cost to save what face they could. In the time span since however, they have been inserting the console division into a substantial amount of profitable enterprises.

Just to name the top 3:
Xbox Live Gold Subscriptions
Micro Transactions
Digital Orders

Sony has the same idea. Both consoles will be more profitable than the last. Each acting as a 'credit card' of sorts where once people have them the obstacles between them spending money and not spending money are removed.

The original article is a shot at the Console Division based on the last few years, not a prediction of the future. One which will be bright for both Companies.

[bligmerk]

Sony is still struggling to stop staggering losses in different divisions. For them, the HDTV market has exploded and collapsed at the same time. Mainly, the Koreans came out with suddenly cheaper and better technology. But in all fairness, there are multiple electronic giants taking multi-billion hits.

Still, this analysis of the *REAL* *ACTUAL* Xbox division losses puts to rest this MS lapdog xbot BS lipflapping about how "MS is making money on the Xbox".

Despite popular belief, Sony is still making money since entering the console market, a very small net from PS2 that covered the losses of the PS3. If you look at the past 10 years of Sony management though, those were the darkest years of the company and since Kaz has taken over, there is efficiency upheaval going on. They have taken huge write-offs, laid off people, killed obsolete product lines. A lot is banking on the PS4 being a huge success. Business is long term, let's re-evaluate the economics in two years.

As for the XBone, MSFT stock holders should spin it off as an independent company.

[kenshiro100]

Its funny how you people LOVE to drag Sony into something that has nothing to do with Sony.

[Flames76]

Another scared fanboy article to stir up some trouble.Just because the PS4 will be losing $60 a console when it launchs you dont have to take it out on the other console.Its already been confirmed the Xbox One will be making money from day one at launch.Which considering the power and everything it comes with is amazing.Hell since september 2007 the Xbox 360 has been making profit while the PS3 has lost over 5 billion this gen.The Xbox division is healthy as can be and raking in the money.Hell this past holiday the Xbox division turned a profit of 1.2 billion.So please take your pathetic self and go find something else to right about.Hey try writing about the truth sometime

[noregrets726]

Also a good reason to start talking about the xbone.

[Moe Sizlak]

This Article is complete BS. Xbox live alone is one of the only microsoft brands that brings in consistent revenue on a yearly basis. To make an accusation like that without any numbers to support it is laughable to say the least!!!

[carlocgc]

PS4 and Xbone are charging you a fee each month to play online how is this ok in 2013. On PC you can game online for FREE and thats how it should be... its like mcdonalds charging you for the burger then charging you to take a bite.

[ipach]

i imagine microsoft would get a pretty sizable pile of money if they spun it out and did an IPO with it. IPO market is super hot right now, twitter being the latest example of the crazy willingness investors/people have to own these (barely if at all profitable) companies... XBOX makes a nice ticker, too.

[eliasg]

actually XBOX is generating profit for years now. Stop lying.

[ATiElite]

CRAP STORY!

MS is making a KILLING on licensing fees on the X360.

$60 to play online is FREE money for MS.

Every Xbox360 sold for like the last 5 or 6 years has been ALL profit for MS as they were able to make the X360 cheaper faster than expected.

COD averages 13m in sales on the Xbox360 and if every COD gamer buys a year of XBoxlive that right there is $780,000,000m that goes Directly into MS Pockets not too mention another $260,000,000 in Licensing Fees it makes from 13m COD units sold on Xbox360.

MS may have lost $2B in research and Design for X360 or XB1 and also have to pay for Xboxlive expenses but TRUST ME Microsoft makes that back up in a hurry.

if anything Microsoft Surface and CRAPPY windows phone is hurting MS, I haven't seen anyone with those.

I can't go 3 steps without seeing an iphone, ipad, Kindle, Samsung Galaxy Note, Samsung Galaxy Phone, with the user wearing Beats Headphones. it's so crazy it's to the point where I'm thinking they are just handing these things out for FREE somewhere and I'm missing out LOL

[eliasg]

The division is bleeding due to other facts not XBOX. Then was project zune , now is the surface or windows phone, not the XBOX. The income from XBOX live alone is more than a billion annually, this is insane.

[srd4484]

"analyst Rick Sherlund has suggested that Microsoft's Xbox division is costing the company $2 billion per year"

he said "SUGGESTED". He doesn't even know it to be a fact.

You readers are suckers for everything posted on the internet.

Post some real numbers or don't post anything

[feraldrgn]

http://www.neogaf.com/forum...

"Analyst: Xbox "generates" $2 billion in losses for MS. Hides it with patent royalties"

If it was just profiting, I doubt there would be shareholders dropping out (or threatening to).

[FAT MAN GO BOOM]

It is never a good sign when they merged and got rid of the XBOX Division completely...

Now it is apart of MS entertainment and Devices... why... so they can HIDE the HUGE debt that Xbox is making... you can only go so far loosing 2 billion every year...

Well no way around it... Xbox loosing 2 billion is not good.. NO WAY Xbox fans can spin that...

That said... Can't wait till launch...

[InTheZoneAC]

just nintendo and sony...the way it's meant to be

just like when sony killed sega and sony killed hd-dvd, I'm lovin' it!

[KingDadXVI]

Number one Xbox has been in the black for years. Yes, if you count from the beginning of the Xbox brand with the total money lost versus total money earned then they are still in the Red by about 2.5 Billion but the brand is making money now and has been for years. You do not terminate a division that you spent billions on to make profitable just to get rid of it once it makes money.

I agree with others feelings that they should have left the Xbox Division separate as opposed to rolling it into the overall entertainment and devices division but having worked in large companies for years I can tell you that that was done simply as a shadow play for investors. It lets them say that they are being more efficient and also follows along with their overall plan to merge all entertainment media types together there by strengthening the brand.

It should also be noted that several market analysts have stated that the Windows Surface 2 and other brands using Windows 8.1 are going to de-thrown Android in the coming year.

Make no mistake MS may be dirty bastards but they are no more dirty than any other company trying to make money.

What is truly comical here is that MS has more earnings due to patent licensing on one platform (Android) than Sony can seem to make selling both their North American and Japanese headquarters. If anyone is bleeding cash and needs a $2 Billion dollar transfusion it is Sony.

LOL.

[bornsinner]

no need to sell buildings ... sony

[larrysdirtydrawss]

Before this ridiculous fanboy argument over power no one ever cared about the power of a console. It was about games and innovation. All of a sudden you people care?

It didn't matter last gen and it won't matter this gen, especially with the X1 still pumping out killer graphics.

you mean graphics that will kill the console,because they're not as good as their competitions(ps4)?

[McScroggz]

If true, this is why I'm worried about Microsoft's Xbox division. Love or hate Microsoft, but there are several venues where they make an incredible amount of cash - the likes that Sony surely envies. I think the original Xbox lost Microsoft billions, but it established a foothold into the industry. The Xbox 360 has also lost money for Micsrosoft, although the revenue from Xbox Live Gold might mitigate or even create revenue (I don't know). If Microsoft spends a ton of money this generation only to see more loses or moderate gains, Microsoft will absolutely get out of the game industry.

And I don't want that!

Sure, Microsoft tried some real shady stuff with the Xbox One. Their strategy of buying third party exclusives and other abrasive tactics are things I dislike. However, Microsoft has helped the industry grow. Even though Xbox Live is scoffed at now for offering little other than multiplayer access, but in the beginning the service was so much better than anything on consoles at the time. Under the right management, Microsoft could be incredibly invaluable to the industry because of the bankroll of the company and the assets that could be used.

The biggest issue is the Xbox division isn't being lead by people who are passionate about creation the way Sony's current team is, and until the Xbox division gets the right leadership I, and a lot of people will be very skeptical of the company. Still, I sincerely hope Microsoft get's its stuff together because healthy competition only makes things better for us gamers.

[NnT3291]

If MS quit the console business, Apple will step in. Bunch of hipsters bragging about their $1000 console, that will be the worst nightmare for gamers

[Hayder]

I think it's sad that Microsoft and Sony continue to make losses yet they continue to provide a gaming industry for the public. All they get is little bitches on sites like N4G complaining about the stupidest shit... yeah start hitting the disagree button kids

[cell989]

gotta say I agree with you lol, Im partly guilty here. You do bring up a good point, these companies make money off of us, but also loose billions in R&D and all so that we have top notch entertainment

[cell989]

they are so arrogant, they are kings of Software but they go way out of their limits to conquer the hardware market too, loosing billions in the process sigh....

[felidae]

and they will make even more money when the xbox one is out!

[TBONEJF]

When it comes to competition. M$ is a greedy bytch and lazy. They don't want to compete just like the sorry a$$ Apple banning device every where. Sent from my XPERIA Z1

[horndog]

Meanwhile sony is relying heavily on the ps4 to improve another $ **y quarter. Lol!! I say sony will fold not in the too distant future

[PharaohX]

Idiot Flamebait Article. Xbox Division is healthier than Sony! FACT - Do your research or check the market for one.... Sony has been bleeding, shifting CEO's and such for years. Xbox

[LordDhampire]

Just because a CEO stays in place ian't a good thing....Microsoft has needed a new CEO for years now, companies are just to afraid to step on toes. Microsoft got cocky and kinda just relied on the fact that they were Microsoft, now they are realizing people won't just buy off brand...Microsoft is a brand people like to hate on look at windows 8...while I don't like no start menu its not that nad ans gets tons of hate.

The true problem with Microsoft is the lack of innovation, zune copy of ipod, xbox copy of Playstation, windows phone trying to be iphone, surface trying to match ipad and android.

And while other companys arn't original (google) microsoft is doing a half ass job at everything

[LordDhampire]

What does this have to do with gaming?

This isn't techspy

[zRude]

When it comes to maxing out the console. PS4 as i saw was or is already maxed out when it comes to the power. And so is xBone.

So was PS3 and X360 when they came out.
But apparently some nitwits believes that maxing out the power, is same as games cant look any better over time.
And all who believes that are just simply idiots.

Sure the power capacity is maxed. But developers will an always have been able to learn how to optimize the power of the console during it life span.

Just like they learned in x360. Compare first x360 games to the latest ones. You will see the difference. And in all games the hardware was maxed out. But not optimized.

Sure xbone loses at the moment to ps4 when it comes to power. But developers will learn how to optimize their games to xBone to significantly increase the graphical performance. And so will happen in PS4.

As someone said in some random forums;
Bucket filled with 4 big rocks, and a bucket filled with fine sand. Are both full. But on has more stuff in it.

So like it or not. xBone will easily go to 1080p graphics and higher in its life span. As will PS4.

Unless you people believe that last gen and next gen lives in different realities ? And that games cannot evolve and improve during their life span, as they have ALWAYS had in all gaming consoles ever created.

And as a PC gamer i have noticed one funny thing.
When it comes to Console vs Console. Fanboys always fights about which has the best graphics.
But when you take it to Console vs PC.
The fanboys start to weep "Ofmg Graphics isn't everything!"

So yeah. People likes to ref the resolution differences in CoD Ghost between PS4 and xBone. But heres a sad little fact. CoD Ghost takes around 10-20 more gigs space than BF4 does, and BF4 does looks 100x better than the still same old CoD, that so much hyped their new engine. And it still looks old. So when it comes to comparing games on consoles. Don't take the s*itty CoD Ghost in the calculations.

[xkevmandc]

to all who are hating on MS then you are a fool, out of the 3 who's make the most money..$2 Billion Per Year From Android Patent Royalties. That's sound like play money they are giving to Xbox. If you know business then that a smart move, have another company pay your losses. Lol Microsoft made $51.12 billion in total revenue with an operating income of US $18.52. billion and a total net income of $14.06 billion. approximately $69.24 billion per year.. can you make THAT....lol. In the fiscal year ending in July, Microsoft made $426 million on $8.1 billion in revenue on the Xbox 360. I just saying....

[JetBlack]

Making An Astonishing $2 Billion Per Year From Android Patent Royalties - Failed to build a console.