Microsoft gaming a "disaster" News

Microsoft are winning.

Maybe a disaster from their perspective, but it worked out well for the consumers. The money they've lost, is money we've saved.

I'm sure the 360 will perform a lot better than the old Xbox. It already has a more promising software line up. Plus they're at least breaking even with each 360 sold, unlike the old machine which was sold at a loss.

Hmmm...I'd like to ask him what he sees as a viable option now?
Should MS just call it quits?
Ride out this gen and fade away?
I believe that the toughest part is already over for microsoft...

Besides, they made a lot of gamers happy...And it's not as if it really really needed that money anyway

I was totally gonna say what ecureuil said. maybe be a busniess diaster but not at all a gaming diaster. Not like Microsoft is gonna go bust anytime soon. erm...

He has a strange obsession with Japan this guy.

And yeah.. MS gave us consumers shitloads of free money ;)

Id ask him if he is mates with good ol JT.

Maybe hes changed tack and thought "I know! Rather than attack specific titles and publishers I will just get the format holders to pull out the gaming market! God I am clever!"

Where is Arnie when you need him?

Well, that's that then. MS best pack up shop and call it a day. :p

"Microsoft are winning. "

bullshit they are .

A: a one year lead

b:flooding the market with poorly made consoles.

c:Nintendo are doing way better at this present time in terms of time vs ratio sales.

Best PR money they've ever spent.

I could never have imagined myself being a vociferous supporter of Microsoft before the xbox, live and 360.Windows, word and office were never going to put a smile on my face

but these days......................lets face it I've turned into a fanboy

I wonder, would that be enough money to buy Sony or nintendo?

"Pushing 40 million consoles sold now, adding this gen and last.

Some disaster. "

source please on this

M$ are known channel swampers , proberly just figures sent out not sold

The C&C3 demo is actually available to dowload on XBL now folks.

/if your're interested that is

/if not go back to the thread and ignore me

Dear Mr. Ehrenberg,

Do you have a dog, and if so which fascist dictator is it named after?

You have to look at it from a financial view. Forget all the great games, superb online service etc. Their investors doesn't care about that at all.

Microsoft is losing big money on their gaming division, most likely the only part of the company thats losing money. So why should they continue to pour that amount of money into something that looks pretty bleak in terms of profit?

Japan is no longer the yard stick for success in the gaming industry, yet people who have absolutely no idea about said industry continue to see success in Japan as the holy grail of all things gaming.

MS have clearly lost a stack of cash on both XBoxes so far but less so on the 360 and will be in an even better position when Xbox 3 rolls around I beleive that they are and have been looking at the long term picture, in future I expect them to actually make a stack of cash from gaming.

Of course Sony will probably wipe the floor with them come the PS4, but hey what do I know about anything?!?

IMHO.

Swish. I've contributed quite a lot to that 5.4bn!

I somehow feel the love!

Surely at this point they (Microsoft) have to make it a success, else it will only be a huge loss for them (the shareholders)? They must be making a fair bit back now from X360 games sales right?

He doesn't understand does he? MS are trying to force Sony out of the hardware market and it's a long term strategy.

"Would we have been better served by returning the extra cash to shareholders rather than investing it in a franchise that seems to have questionable prospects for turning around? These are the kinds of questions Microsoft management should be asking. And hopefully, for shareholders' sakes, they are."

Questionable prospects? It seems to be doing fine from where I'm standing. Then again, as an investor, the above statement makes it absolutely clear what your real motivations are Mr Ehrenberg and somehow I don't think it has much to do with the idea of healthy market competition and/or consumer interests.

Wow, all this cos he couldn't get past the final level on Gears of War. Or something.

Didn't this get refuted by other analysts? There was an http://www.Xbox-scene.com article on it.

They will continue to throw money at the games division because they can afford to do so with a long term view of enventually making money and having a media hub in millions of homes around the globe.

Afterall snatching gamers from the playstation brand which has been so dominant over the last decade wasn't just a case of releasing a console and hoping people would jump ship. They need to change peoples perception of Microsoft which has never been positive and also the perception of the competition. This takes millions of dollors in much the same way politions in the US spend millions of dollors on their campaigns to become president.

They have a great product on its own merits but not everyone knows this to be true and it costs to change peoples minds.

I think he is missing the big picture here i.e the long term view. Microsoft are not where they are by being stupid. The 360 is not just about games for Microsoft its about moving into the Home Entertainment Market which will be very finanically rewarding over the next twenty years as technology comes together. Take Apple, they dominate in the online music/mp3 market as MS do in the home computer world. Apple got to thier current position via the iPod which in turn gave them the iTunes music store which may in the future mean Apple will be the major leader in digital disturbtion which will take over from CD's/DVD's one day and they get all this from the success of the iPod.

If the 360 wins the console war or is a huge success come the next round of console swhich wiill offer everything on them from sky+ services, tv services, movie's, shopping, teleconfercing and then a few years later devices that control everything from paying your gas bill to reminding you your low on milk, MS or Apple or Sony etc etc will off got there because of past successes

I don't see it as a failure. MS in tons of living rooms, IPTV coming soon, video marketplace in the US, game division moving toward profitability. 360 outselling PS3 in US, mostly on par in Europe and yes, disastrous in Japan but PS3 not doing much better there.

Sure, the Wii is gonna end up selling more - but they aren't competition for MS in the sense that Sony is with the PS3.

Who are you??? (Arnold S conan voice)

I have a wii and a ps3 as well as the xbox 360 and this is how my gaming goes:

Bought 360 have maybe 40 games love live and arcade.

Bought wii with Zelda and wii sports have not purchased any more software, show friends when they come round, play for 30mins then they want to play the 360.

Bought PS3 and motorstorm, now waiting for exclusives only because if they are multiplatform I will get the 360 version for achievements rumble and live.

Its not just the number of consoles sold that matter it is the amount of software and microsoft seem to be doing a good job in this area.

for 6 billion, you can give away 10 million of 600$ consoles

It's a failure until they actually make some money.

Games for Windows may not be a huge hit, but the 360 is doing just fine for itself.

Time for Sony and Nintendo to have a whip round to buy out Microsoft's gaming wing mwahahahahahahah :-)

Sales of the 360 are ok, but not good enough at the present time to recoupe those losses. Microsoft cannot be viewed as winning anything until they actually get into the black.

Financially they might not be the best but in terms of games I wouldn't call them a disaster. They have some pretty good franchises imo. They also have been in the business of making games longer than some others in the market.

HED != MGS.

We can't help but think Mr. Ehrenberg would fit right in to our very own comments threads. And if he did, what would you like to ask him?

I NAME YOU: JMM! ;p

Not worth boasting 75% marketshare if your not making money from it.

It's all very well making good game/consoles, but if your not profitable somethings got to give eventually.

I suppose if he was expecting market share on the scale of Windows then Xbox 360 is a disappointment, but if it outsells the PS3 (which it's doing in America at the moment) then surely MS is doing pretty well for a second attempt.

And Windows is an unfair comparison anyway, because it got market share more by default than through real competition.

Good for us gamers and bad for the suits, sometimes we do get a break.

Apart from this guys being the "analyst thing" he makes one very important point that Fanboys and Eurogamer (i guess) wants to ignore.

His conclusion was based on "objective numbers" taken from the Microsoft's financial statements, which show a total loss of USD 5.4 billion from its efforts.

"Would we have been better served by returning the extra cash to shareholders rather than investing it in a franchise that seems to have questionable prospects for turning around?"

5.4 BILLION DOLLARS that is a disaster for anyone except those that print money of Windows Licenses

Someone must have the numbers on the Playstation 2 success and how much Sony earned on the console. Compare it to the 5.4 Billion LOSS and try and figure out for how long Microsoft has to pump money into the XBOX before it breaks even. Then do some math and try and figure out when they will make a profit worth mentioning.

Then make a cup of tea and imagine the World when Microsoft has a Monopoly on the Console games and the PC Gaming platform. Then think of how you will be milked dry if you want to play.

Finally put the 5.4 Billion in stocks and bonds over the same time and checkout what Microsoft would have earned doing that.

surely its not about where it is now, but where it will be in 5- 10 years time when the xbox 1080 (or whatever it's called) will be the home entertainment hub of choice. I feel microsoft's strategy here is all about (xbox) live and digital distribution. You gotta invest to reap the rewards in the future, this 'anal yst' has got no imagination :)

Sounds to me like Roger Ehrenberg doesn't actually "get" what MS's strategy is. Its not really about making money from game sales.

muftak: "bullshit they are ."

Are you trying to say that the 360 doesn't have the biggest install base of the current three "next-gen" consoles?

Mr Ehrenburg is an accountant, such people reduce the world to a spreadsheet full of numbers and try to make decisions based on that viewpoint alone.

The more complex and difficult the business, the more dangerous such people are if they actually make the decisions in a company.

In a simple business, a man like him could be a successful as CEO. Making cheap generic baked beans for example [not Heinz, he would try to cut costs and ruin the taste and therefore the brand]

I held shares in Microsoft for six years from 1993-1999. One of the reasons I sold them was that eventually the current generation of management leaders would be replaced by a narrow focus-on-the-numbers chimpanzee like Ehrenburg.

Gates was a bastard, yes, but he was effective because he undestood business strategy and long term planning in the "strategy of technology."


Interestingly, since the Iraq War was recently mainly run by a similar sort of man to Ehrenburg, a civilian Businessman except for 3 yars service in the Navy 60 years ago, his name was Donald Rumsfeldt- and he made ALL the decisions.

Theorectically, the war would be won by a light cavalry backed by massive aerial firepower, he said. "Away with you General Shinseki, we do not need 300,000-500,000 troops, for I have seen the light and truth in my spreadsheet - you may retire or be sacked."

That is true financially, if the enemy is uniformed and organised as a conventional army. So in the US went, with 3 divisions. Then the conventional war finished and a war against terrorists using stealth tactics, shaped charge Bazookas (RPG-7) and suicide bombers began.

Then, looking at his spread sheet, Rumsfeldt said, NO! naughty troops on the ground! - you can't have any more M1A2 Abrams main battle tanks or Bradley IFV's, they are too expensive as are more troops to control Iraqs borders - you must be light cavalry and take your licks. [4000+ dead, 17,000+ VSI, 75%+ P.T.S.D.]

"It is true, for I have seen it in my financial projections - and the President wants his tax cut."

Back to Microsoft. Just as the massive long term investments in the gaming segment are about to pay off i.e. XBox360 is winning the installed base and software support, Mass Effect, Bioshock, Too Human, Fortza 2 are all coming soon to annihilate the PS3 in the next six months, Xbox live download business is booming, the Xbox Bill of materials falls making each console profitable, WHAT DO WE GET???

EHRENBURG the bean counter pops up:-

"look at all the wicked long term investments made, what a waste, you should have paid all the cash to share holders instead!!!"

All I can say is accountancy is a usefull tool in business decisions, but also a very poor master.

@Goban

"It's a failure until they actually make some money."

Hardly. Its called investment.

@Bill Door

"MS are trying to force Sony out of the hardware market"

No they aren't. The HW is a means to an end for MS (same as it for Sony actually, but not the same end).

Kagarootoo- "Hardly. Its called investment."

Investments need to make money, simple. Otherwise they are classed as failures. Has MS made money yet, No. Will they break even eventually, probably. But until it does it cannot be viewed as a success.

Games for Windows may not be a huge hit, but the 360 is doing just fine for itself.


Yeah, Games for Windows is a financial disaster, only just so balanced by the Xbox branch. :p

Games for Windows is just a standard. It doesn't cost them any money (well, a few marketing dollars maybe). If you mean the MS published PC games themselves, Flight Simulator, Age of Empires etc. are all a huge success. They are actually earning money with them.

"Not worth boasting 75% marketshare if your not making money from it."

Is that the new yardstick here at EG? Profitability?

He does have a point to make I suppose. With that much money spent, how long will it take for MS to recoup those costs.

However, Microsoft is not alone in their gamble that home entertainement and the fight for what sits under the telly and (probably more importantly) the sofware that is used to enjoy the games is going to be a lucrative one. Maybe not today, maybe not tomorrow, but soon, and for the rest of our lives.

I think they're making the prediction that PC and TV and Games will one day be one and the same and we're already beginning to see that with the Live film and TV service aswell as Apple TV etc.

5.4 BILLION DOLLARS that is a disaster for anyone except those that print money of Windows Licenses

That's a tiny little speck. One of the first googles: http://finance.yahoo.com/q/is?s=msft


Think those are nice numbers? Note the "All numbers in thousands" on the top. Yes, those are monthly numbers compared to your total.

Enough there to buy a small country every year.

/cries @ seeing his paycheck

EDIT: I'm a financial runt so I'm ready to get an arse kicking on this one.

"Would we have been better served by returning the extra cash to shareholders rather than investing it in a franchise that seems to have questionable prospects for turning around? These are the kinds of questions Microsoft management should be asking. And hopefully, for shareholders' sakes, they are."



Gamers response: Fuck the shareholders, we want Halo 3!