Microsoft just launched the Xbox One a few months ago, but the company is already looking at the future.
I hope MS makes some profit this gen. They're working hard to turn it around. I do think with the smaller loss on hardware they have a better chance to do so even if it is less popular than 360. I should point out that this isn't definitive proof they do plan to make another xbox, Sega actually had a dreamcast successor at least in the conceptual stage before they pulled the plug.
The xbox consoles historically have never been profitable for microsoft, microsoft makes their money back on xbox live subscriptions and software sales.
Microsoft "leads you to believe" they make back their money on Xbox Live Subscriptions and software sales. But the reality is they don't make anything, they actually loose money, then hide it in Android Patent royalties. http://www.gamesindustry.bi... This was revealed by a real Microsoft analyst Rick Sherlund
@theyellowflash30 hmmm,didn't know that
"The xbox consoles historically have never been profitable for microsoft." Wrong. http://www.gamasutra.com/vi... http://www.extremetech.com/...
That's almost all consoles, though, not just MS's. Software sales have always made the bulk of the money for consoles while console sales are just the catalyst for the software. MS also made money from ads on the 360.
Maybe the hardware they're talking about is VR or something like that. Just a thought
@McG, you must have missed Theyellowflash30's post. Those links you posted are not just Xbox but the entire division which includes the android patents mentioned above.
@MultiConsoleGamer "The xbox consoles historically have never been profitable for microsoft." Right. If you finish reading his message, he clearly meant xbox 360 _hardware_ hasn't been profitable. The money comes from the software sales and live subscriptions.
Neither have sony consoles, Nintendo have always made a profit on their hardware.
they have never made money with the xbox brand. Even with games or live subs. They hide this fact by merging the xbox brand with more lucrative activities (Entertainment & Devices).
1.1.4 And wrong... C'mon First line. "The Entertainment and Devices Division of Microsoft, which includes the Xbox 360, PC games, and Windows Phone, took in a profit of $32 million on top of revenues of $1.49 billion" The Entertainment and Devices Division is not the xbox only. THey merged the xbox brand here because it was doing poorly. The money comes from the android royalties.
@yellowflash So when does working for another company make you an employee of MS. This is from the story you posted. "Microsoft is hiding billions in losses from its Xbox gaming business, according to Nomura analyst Rick Sherlund." Where does it say that Rick Sherlund is a MS analyst? Can you please let me know? It's always awesome how you guys twists things to fit into your agenda!
Nice story Alex.
I get the impression that Microsoft will want to end this lost generation and will be looking to release the Xbone Two sooner rather than later.
@alexkoepp- Cool story, want a cookie?
@alexkoepp Wow man breath for God's sake! You know there is nothing left here for you, you clearly are the most biased chap around here, even Trufan1 vows on your sight. Trying to sound like a pro just leaves you more in shame, we normal people are not on your league so you will always know more than us we get it. Keep playing Halo till end of times and let gamers enjoy new games ahead.
@alexkoepp Lol. Wow you're a bona-fide Xbox drone. Micro$oft brainwashed you good. Let me know when you come back to reality where Xbox will NEVER be as good as PlayStation, and that's a FACT! Dealwithit :)
After reading Alex's biography especially this "Microsoft makes amazing stuff. I was a PlayStation guy, until the day I played Halo. The day I touched that at a friends house, well, I went out immediately bought an Xbox, and never again touched my PS2. Halo occupied me (and all gamers) for the next year. LAN gaming, oh my, greatest console experience ever. After that I was luck enough to be a beta tester for Xbox Live, first dibs on gamertag, F yeah!" I was like what the hell I'm I doing with this piece oh shit..._looks at the ps4 and slightly dusty ps3 underneath it_ Not really. OT: Lets hope they wont abandon ship, again, just like they did with the first xbox and the second (for the last couple years) and leave all those XB1 owners left hanging... Who I'm I to say history does not repeat its self?
I doubt MS is losing any money on 360 hardware nowadays; considering the cheapest is still about 200 bucks, there hasn't been any significant price cut in years. I bought mine in 2008 for the same price... I don't think I've ever seen any 9 years old console that expensive.
Sure, that was the case in the past. But reports I've seen suggest both MS and Sony are selling their consoles at a profit right out the gate. http://venturebeat.com/2013...
@theyellowflash That article was pure speculation... And what makes him a real Microsoft analyst? Here, let's do since basic math.. According to this link http://www.gameinformer.com... Microsoft had 46 million subscribers in 2013. Let's say only half (23 million) paid for gold, and let's make the funny assumption that on average they pay below retail price(which is $60, but let's go $40. If you do the math, in one year alone, Xbox live should bring in a year over $500 million. I didn't use $920 million, cause I don't know the operational cost of live. If Xbox was really bleeding that heavily, I think investors would have been had their day... As it's been common knowledge regarding android royalties. But then again, my thinking appears too simple... So it's probably wrong. @coolbeans Exactly
Wow, you think i don't know that? That doesnt change the fact that the smaller hardware loss means it'll be easier to make their money back and even start profitting on the hardware units sold. It'll be easier to make back on a 50 dollar loss than a 200 one. Cant believe everyone assumed i didn't know the basics.
"I hope MS makes some profit this gen" Microsoft always profits. period. so don't worry. *we also know there would be another generation after this generation, whose the one who said this gen will be the last?
Nobody makes significant money on hardware. Money is made on tied services and software always.
disagree. 1st xbox wasnt succesful in turning profits but it was more of an investment into the industry. 360 was profitable. exclude the XBL and it was still profitable. you really believe that the amount of 360 they sold with almost every single one making profit did not cover R&D? I highly doubt that. also cnsoles make money from game sales. do we need to include that as console making money? 360 made tons of money from software sales, almost every multiplat sold more on 360 and the exclusives made crazy numbers.
I bet it's to develop Kinect 3.0
Wheeze, you know when the XboX one is doing bad when Microsoft's talking up the next console more then their current one.
IN OTHER WORDS THEY ARE GOING TO COPY SONY YET AGAIN!!! LMAO!! seriously this company has no direction whatsoever they have back peddled on EVERYTHING and have just copied Sony and its getting embarrassing! crazy how a company with so much money hasn't got a single clue! They saw how Sony nailed everything with mark cerny at the helm and now are going to copy even that aspect of the Playstation division. This is getting more and more pathetic day by day.
The number one reason the xbox 360 was not profitable was all the money they spend making up for the RROD. All that money spent on exchanges techs to fix the systems, postage, etc. If they can avoid that kind of pitfall this time it will be profitable.
No matter how they make their money, they are not the company as a whole (not just games division) that reported a billion dollar plus debt. Hate on MS all you like, the company is still very profitable where as, its closest competitor whom maybe winning in console sales the globe over, but at the end of the day will it really be enough to get them out of so much friggen debt.
In fact how many consoles would a company need to sell to recoup that kind of deficit.
Haters gonna hate no matter what
The thing Microsoft needed to improve on was reliability of their hardware, it got taken care of with the X1. Their next console they need a good, consumer friendly strategy at the console reveal to develop consumer trust from the get go. They obviously know this already. Now Sony needs to not get overly confident about the success they have had, and keep improving their console/business. It should be an interesting battle between the two going forward.
looks up and notices peeps be hitting that disagree without doing their homework
Though to be fair they have made up for a world record reported loss in 2012
Pretty amusing read LonDonE. MS copying everything Sony does...really. Tell me this... Why does the PS4 have a traditional CPU in it instead of the ALL POWERFUL CELL? Why was their console cheaper this time? Why did they release their console sooner this time? Why is their console easier to develop for this time? I could keep going...all the things MS established last gen. It's funny how that works.
Damn so glad Alex got marked for trolling for that paragraph of made up nonsense. Such hot hot nonsense from that user. Quite the Microsoft apologist, taking it to new levels. OT: Is this MS finally admitting they ballsed up their specs? I think it is. Those bottlenecks will be with them this entire gen. A damned shame I bet. Feel sorry for Phil Spencer having to keep a straight face as he's lumped with a tainted product from clouded product vision from people who've all up and left the Xbox team. It better bring its A game though as you know full well Cerny already has the PS5 planned out
alright thats why sony has lost millions of dollars as well because of their gaming franchise?
@pyramidshead "It better bring its A game though as you know full well Cerny already has the PS5 planned out" What? Where did you hear that? Dont keep these things to yourself man! Link/s please!
News headlines like this scares gamers. And fanboys love seeing news like this. They better take that article down before people get the wrong idea. They are talking about the future but.... this headline.... doesn't a very good image make.
Incorrect, the Xbox division is not profitable, and there are many executives from the company who would rather sell the division off.
The Dreamcast was a successor system to the Saturn, which itself was pretty much dumped on the market. And its not going to be a good thing in general if there's an XB2 out in 3-5 years. At the very least its going to lead to confusing the market, especially when no one has really shown what the current consoles can do yet talk about them as if they're under-powered.
Most consoles have a shelf life of 5-6 years. Last generation was an anomaly. The first XBox was only out for 4 years and Microsoft managed to do very well with the XBox 360. They dumped it because it was bleeding them money and the PS2 was already dominating the market. They also couldn't get as much game support as Sony at the time. That's not to suggest coming out with a new Xbox is a good idea in 3 years. Once the system is 5 years old or older it's totally acceptable to have new hardware come out and Nintendo has already confused the market with the Wii U.
Agreed godmars... Except the 360 launched 4 years after the original Xbox and that did not confuse the market. Try again. On topic, this will be a short gen for Microsoft. I expect a new Xbox in 2017.... Unless they really turn things around. Now they have put the Xbox division into the OS division, all losses for this gen, and costs for next gen are already covered
People are reading far to much into this, SONY started RnD for what was to become the PS4 2 years into the PS3's life cycle and yet the PS3 is going on 8 years and counting.
If you don't believe me go google it Mark Cerny was quite adament about when the PS4 development or RnD started.
You also have to take into account that the Xbox One design was more or less driven by Don Mattrick at the helm. Phil Spencer can't do much hardware wise so ensuring that they don't repeat the same fate next gen is smart thinking.
Is Mark Cerny for hire?/s
We all know that this gen of consoles won't last as long as before. The next Xbox will be out in about 5 years. That'll force Sony to come out with a console too. I think next time MS will invest heavily in hardware. They learned many things this time and got rid of the dead weight like Don Mattrick and hired the right people. Sony has learned a few things too like security issues and server problems. Both companies have had trial and error. I hope both companies give us more powerful consoles. Both are underpowered. Devs were asking for 16GB before they released. They both came up short.
Buy a PC if you want more powerful gaming device. It's really not the devs that whine about 'underpowered console', it's you and the master race. Instead, devs are happy to get rid of PS3 & the 360.
3rd console curse.
Microsoft work hard only to make huge numbers for investors.. but definitely a company without a soul... without a direction... next xbox hardware cost 800$ and have a snapdragon 850 for cpu and 32 gb lpddr2...
MS has interesting luck. Look at windows 95 be, 98 nice, Me be, XP nice, Vista be, 7 nice, 8 be. xbox be, xbox 360 nice, xbox one be. But it mite change look at surface 1 be, 2 be, 3 nice. They hapen to be ahead of time, but alone and misunderstood.
I'm very surprised shareholders have great lighted another xbox after ms fumbled badly out of the gate with the xbone. I mean, how many millions have been wasted on kinect 2.0 R&D alone for them to unbox it half a year later? What about the millions spent of the Titanfall bundle advertising which still lost to the PS4 in the NPD report? If they really are making another console, hopefully this time they will actually focus on games and specs this time and not even consider DRM.
So when a public company wants to make a new product they dont have to ask permission from shareholders. Alls the shareholders can do is complain to board members. The board only has any actual power. But even then the CEO has more power than any board member. In order for the board to trump the CEO, they would have to vote on replacing the CEO with someone of there choosing and have a majority vote. Seeing as Nadella was just put in office a couple months ago, and came in with the mindset of keeping xbox alive because it was crucial to the companies plan, I think the board is pro xbox ATM despite the rumors. The only real shareholders that have publicly said to get rid of xbox, is a trust that just recently (within a couple years) bought a LARGE amount of shares. So they are new to the company and even though they bought Alot of shares they dont have alot of power. The MS plan is still to gain a large foothold in consumer's home and Xbox is crucial tonight considering how everyone is moving more away from using PCs as a homes main internet access. That is where the cloud comes into play as they push more into a interconnectivity of all of your devices under one ecosystem.
''lesson learned'', but then again do You think Sony isnt preparing for PS5?
This is quite early to look at a new console development. Thinking of Sega's rushing of the Dreamcast after the Saturn was still new.
they definitely going to make profit this gen. R&D couldn't have cost them too much, consoles making profit already, sales are healthy and should easily go over 30million. XBL should keep revenue up.
Thats what i was trying to say, the XB1 has more potential than either of its predecessors to make money. It'll probably sell 40 million to 60 million depending on how long this gen is. Its coming off the heels of a popular system and isnt being sold at a ridiculous loss.
I hope they lose their arse on the X1 tbh, prolly won't happen cuz #teamDorito in the US of A but MS deserves it for the crapola they continue to pull (reverse 2013 E3, reneg on DevKit promises, etc etc etc etc)
Damn people really do beleive everything they read on here. Even when the statements are proved by another more trusted site to be wrong. You kids these days. Please stop with ur anger and hatred. It makes you look childish
alex, is that supposed to be English? Because none of what you said made any logical sense. And McG, you need to do a little something called reading comprehension instead of blindly rushing to defend Microsoft, as usual.
I hope MS doesn't announce new console in two years if X One proves to be a failure.
Why do u even care bout a company gaining profit for? When we buy their consoles it goes to their pockets. I'd rather be worrying bout more new powerful graphics and better games for this generation and next. you do realize M$ is a billion dollar company. At lease SONY listen to the DEV and makes a processor that everyone can understand and program great games this gen
Super Creator ??
That's how they call it. Basically someone at the very top of the design food chain.
yeah, it seem that way but still the name is really silly unless hmmm....can he fly ?!
Agreed...super creator ...o.O...hell lets call the next Xbox 'super Xbox' ...the seed of the super creator. My question is why so soon? Why announce it? .....And Why not call him super-mega-ultra-typhoon-sport scar-leglock-explosion creator?
Maybe drop Xbox One like the original xbox and come out with Xbox 1080? Yeah, it is weird that they would even announce it.
"why so soon"?
Because there will be 5 years worth of research, design and management.
The things they will need to do is:
1. Review everything that happened in Xbox this and previous gens.
2. Review everything that happen to all the other consoles.
3. Look at the current tech out there, history and trends.
4. Look at what tech is coming out in the years to come.
5. Settle of a format of how the games will be stored (On line, disk or what ever).
6. Get the right processor.
7. get the right graphics card.
8. design a dedicated system to get the most out of the CPU and graphics card.
9. incorporate any extra peripherals the company wants to push.
10. keep an eye on the price of research, production and the final product.
11. try and keep a head of the curve with the tech so it's powerful but at a good price.
12. Make sure you end up with a better product than the other consoles.
Someone would be very busy in the next 5 years!
@ ravinash , Then please explain what the XB1 devs were doing for the past 5 years. Because it is obvious that they weren't doing any of those things you mentioned. lol j/k
Sony caught Ms soo off guard with the ps4 reveal they have been back peddling ever since... Let's be real about it. Everything Ms has done since (reversals, games with xbl, apps no longer behind a paywall)is an attempt to match sony which is great because it benefits us, but unfortunately hardware is hardware an Ms are stuck with the inferior specs that no amount of buzzwords like 'cloud and dx12' will change. Ms will not want to be caught out again specs wise so it's good they are planning from now Kudos ms