Could Xbox survive without Microsoft?

Alex Androski of The Game Fanatics ponders the future of Xbox under Microsoft’s new CEO.

[NatureOfLogic]

With Xbox One global sales not looking so hot, I can see MS getting rid of Xbox.

[Mikelarry]

all thier investments (pc, surface) aren't doing well the only division making them money is the console business, it would be silly for them to get rid of it

[Muffins1223]

Console has not made them money and only recently did the 360 start to bring in profitable amounts,but as a whole xbox division it has lost money and xbox one is selling horrible in Europe and will in asia. Its going to loose money this year and next year i grantee that.The thing they make money in is software dipshit and that's what their known for,not xbox. Its not silly when they are actually considering the idea of doing it now.Its not going to necessarily fail its just not going to have any profit and at best it will come close to breaking even with what they paid for,which its stupid to support something that does not make money.

[Utalkin2me]

The Xbox division is still in the red since the original xbox, so no it couldn't.

[LackTrue4K]

Microsoft ONLY brings in $$$ from there software!!!
pc/tablets, not so much....Xbox it's self profits suck.

[MasterCornholio]

What's wrong with you?

How could you ignore the monopoly that Microsoft has with windows and their Office Suite programs?

[ABizzel1]

Could Xbox survive without Microsoft?

As a console manufacturer No. They need someone with enough money to invest in the console production, which means they'll have to hope someone like Amazon, or Apple scoops them up.

If they do, try to make a console on their own they're going to have to really balance sales expectations and market reach. If I were them I'd focus on an American launch, then a European Launch 6 months - 1 year later, and finally WW launch 2 years later once production fees were down, so each console is sold at a reasonable price and profit.

But even then it's going to be hard. If the Xbox division goes solo, it'll be best for them to shrink into a game publisher, making Forza, Fable, Gears, Halo, etc... for PC and PS. They would be best served integrating XBL into PSN, and having a unified system where PC and PS gamers can play with each other through. FInally they could make peripherals like controllers, Kinect, etc for PC and PS. Software and Peripherals are the money makers in console gaming, and that would be the easiest way for them to make it in the industry.

[dcbronco]

It's amazing that people still believe Xbox isn't profitable. I know stock brokers like to pretend it's not so they can short sell stock and play their games to increase their own portfolio. But for people to be incapable of using common sense to realize that Xbox is very profitable and has been for years is something that is actually pretty scary.

All of the re-negotiated contracts, all of the die shrinks, case shrinks and packaging shrinks. Add power saw shrinks and demands. All of that saves a lot of money. Almost every game sold on the consoles nets MS a ten dollar royalty. Xbox Live subscriptions are sold at a profit. Items sold on Live are sold at a profit. Don't be fooled into believing Xbox couldn't survive on it's own. And definitely don't believe those who will hate MS no matter what. They don't live in reality. Xbox would continue to flourish.

Also Xbox and games in general are a growing area of commerce. It would pure stupidity to abandon it while it is growing. It already beats most forms of entertainment.

[Sayburr]

According to their financials the Entertainment Division is making a profit... They don't specifically breakout the Xbox from the rest of the division, but still "The Entertainment and Devices Division saw profits grow to $848 million for the full fiscal year. This is up from $380 million a year ago. Microsoft also shipped 1 million Xbox 360's in the quarter, which is down from 1.1 million a year ago. Xbox Live revenue grew 20 percent in the quarter."

[dcbronco]

The division has a lot of products, most don't make money. But basic knowledge of how the console business works makes it easy to see that Xbox makes a ton of money. The most expensive parts are the CPU and GPU and their cost goes down with die shrinks. The parts int he 360 went from 90nm to 65nm to 45nm then to being combined into one 45nm chip. Only a fool believes MS didn't save any money. Analyst know they did, but they are in the business of cheating people so they pretend it doesn't. I know many millions of Americans lost a lot of money on the market during the last couple of crashes but they continue to be fools for their 401ks. So brokers continue to cheat them. But back to the point.

Those dies shrinks have brought the cost of the entire GPU/CPU chip to under $30 for MS. Down from over $250 from the launch price of the parts. Yet the 360 still sells for $300. With the addition of a hard drive that any of us can get for $70 and some software they already own or can buy cheaply.

http://www.newegg.com/Produ...

MS makes over $100 on every Xbox sold. They said they would drop the price every year before launch. The high price of the PS3 allowed them to keep it higher then it should been. But I'm sure MS appreciates all those that believe they are losing money on the 360.It al;lows them to keep the price high.

[lolCHILLbro]

Xbox One sold quicker than any other Xbox, as far as MS is concerned Xbox One is doing great, only a fanboy would think its not selling well just because PS4 has sold more! PS4 is 25% cheaper and in 3x as many territories, Xbox One is doing fine, sorry to burst your fanboy bubble

[Utalkin2me]

This about Xbox division as a whole, and not just what the Xbox1 is doing.

[GhostTurtle]

Not to mention the games look 25% better.

[AngelicIceDiamond]

@Nature 3.9m Yep MS is on its way out the door.

[WilDRangeRrfc]

I have PS4 but MS are making more money than Sony last gen and so far this gen,don't forget Xbox Live has made around a Billion alone,plus they are making more on each console sold compared to PS4.I read an article the other day saying profit wise MS is ahead so I don't know why all the doom and gloom for Xbox,disagrees don't change facts,in the end though I expect PS4 to at least double X1 sales worldwide by end of this gen,and PS+ subscriptions to increase ten fold making PS4 the more profitable eventually,Sony need it and I am more worried about Sony as a whole than Xbox

[christocolus]

@nature

lol...You know that aint happening. right? The xbx one aint selling as well as the ps4 but that doesnt mean it aint selling really good.its selling faster than 360 did within the same period and faster than the wiiu.

It aint going anywhere.

@mikelarry

All their investments(pc, surface) aint doing well? lol, wth? you need to go back and read their latest earnings report before making such comments.

[maniacmayhem]

By some logic Sony should have sold of the PlayStation brand and name since it's own launch wasn't so hot.

Anyone remember that? The million of "Ps3 is Doomed" articles that most moaned and complained about on this site.

[Utalkin2me]

Well in defense the PS3 was clearly the better system with better hardware. Where the Xbox1 lacks in every aspect compared to the PS4. So i do not see how thats the same.

[Retroman]

could x-1 survive without MS 44 billion dollar support??

i'd say NOPE!!

[Mikelarry]

without knowing who the contenders looking to purchase the division its really hard to tell but i think without ms the xbox division will die as only ms has that deep pockets to really make the xbox one a viable system to entice both gamers and developers. i mean seriously which other company can really take a billion dollar hit (rrod fisaco) and act like its nothing

[XiSasukeUchiha]

Pretty much because of all IPs so MS make your decision now!

[isarai]

I honestly don't think so since many things Xbox has in its favor is from MS throwing money at it

[n4rc]

I think most of this is kind of ridiculous..

Xbox is worth as much to ms as a marketing tool.. Its not going anywhere.. None are.

PlayStation doesnt exist without Sony and xbox doesn't exist without ms..etc

[Hicken]

If the marketing tool isn't making enough money, they'll stop using it.

That's the whole damn point all you Xbox people just pretend doesn't exist. It doesn't actually matter if the Xbox division is making a profit. What matters is if it's making ENOUGH profit. If that were undoubtedly the case, investors never would have brought up the idea in the first place.

[n4rc]

You don't Axe a profitable division. Ever

Even if it made 100k a year.. Its marketing value adds to that and makes zero sense to offload anything making you money..

They dont need to free up resources so I really don't see the value in it..

And you Sony fanboys should find better uses of your time if I'm being honest

[4ShotKing]

Considering MS just bought the Gears IP and Titanfall 1 rights, I don't think they plan on selling the Xbox division anytime soon, but I do not expect to see a fourth Xbox console.

[Thepharaoh]

Console manufacturing is a lot more complex and expensive than simply doing what most electronic manufacturers do.

They're are Exclusive ips and third party relations
no w their are online interfaces, indie support, constant updates, and incredible competition.
Microsoft is one of the only companies that has the ability to perspire through this sort of thing

I really don' see any other company with the money or time that Microsoft has that could possibly support the Xbox

[kingdip90]

The way people defend against the idea of Ms selling xbox is funny.

"It makes money, won't happen"

Without looking into why investors and financial advisors suggest getting rid of it....

Yeah it's making money but some investors feel microsoft could make more money if they had a laser like focus on software instead of being a protracted software and hardware company.

It's making money but not enough to keep investors happy. Investors who btw if xbox is spun off will either get a lot of money from the sale of xbox or who will maintain a financial stake in it when it succeeds on its own. For them a spin off is win/win.

Don't dismiss it so readily as a possibility

[porkChop]

Xbox could definitely survive without Microsoft. The real question is WHO would be a better fit for running Xbox.

[Ripsta7th]

Dont think so, MS makes sure the brand is known

[S2Killinit]

I dont think MS will be selling the xbox. Also dont think xbox could survive without MS deep pockets. Besides, as much as im not a fan, xbox is doing fine, sales wise. PS4 is in my opinion the way to go for real gamers, but that dont mean xbox is bad. (Anti gamer/consumer aspirations aside)

[jgrigs09]

It's funny how so many people on here are SO desperate for Microsoft to dump the Xbox.

[porkChop]

Dude, don't even try bringing up fanboy crap. Microsoft's own investors have been trying to get them to sell off Xbox for years because it doesn't make any real money. I still want Xbox around, I just don't want Microsoft running it because they don't give a shit about games or gamers at all.

[Kingoftherodeo]

the answer to that question would be maybe. can't predict the future but its selling better than they expected and its making profit. microsoft wouldnt get rid of because of the brand/name that goes with it. when you mention Microsoft to those under the age of 20 they associate xbox with it. kinda like apple and the iPod, hardly anyone buys the iPod touch because for a few more bucks you can get the phone which is almost the same thing. but they want to continue the iPod name

[xkevmandc]

who's having money problems. Sony or MS.. Who about to go bankrupt. SONY or MS. Sony sold off PC division and TV- division. WHAT'S next???? lol remember Sega dreamcast. win Sega was in Financial troubles....if I was a Sony-fan boy I will not be talking anything about Microsoft xb1 or Nintendo...MS came around win Sega was in troubles. now Valve is coming win SONY is in Financial troubles..PS4 sales don't mean a dam thing.The Dreamcast sold 10.6 million units in its lifetime..

[Kribwalker]

That's just it. Xbox div makes money, even when other divs make more money, it's still a money maker, why would they want to sell it off? It's not like they are sony and desperate for money because they are on the verge of bankruptcy with a credit rating the equivalent to "junk"

Rip sony 2016, playstation as a brand will live on, that'll be about it

[ziggurcat]

I don't care what side of the fence you sit on, this article is just plain stupid.

[Artemidorus]

Depends on who takes on Xbox and what direction they want to go. I think Microsoft did a good job with the 360 and improvements will come with the One as the general public keep applying the pressure for improvements.

[Jdoki]

This isn't about spinning off the XBox division because it's doing poorly, it's about spinning it off as it takes so much money to make so little money.

When you compare the profit of the entertainment division to their core products, it's so tiny it barely registers. And yet MS are still 2billion down from the R&D / launches of Xbox products.

By spinning it off MS could potentially keep close ties to XBox without having to take the brunt of the costs (for example they could still provide the OS as this has synergies with their desktop and tablet strategies). Also, another company could focus 100% on XBox rather than having itself spread across multiple market areas.

It could be a good idea... Especially if they sold it to Sega :) (Not gonna happen as Sega don't have the money, but seeing Sony, Ninty and Sega going head to head again would be awesome)

[feraldrgn]

If anything, it would probably be more successful.

[SynestheticRoar]

Who would write all those checks for the media.

[Tzuno]

consoles are for games Ms but you beg to differ , now deal with it. I love the xbox brand but the men that take decisions for it are not gamers. it takes a gamer in this department.