One thing you guys need to remember is that what stockholders and financial analysts often pay more attention to are the promises that are made, and whether or not a business is on track, per what was forecasted.
From what I can remember, there was no promise that games division was going to be profitable with the original Xbox, or even for fiscal year 2007. If MS said that it was going to lose X amount of money in a certain period, and that's what happened, then that's acceptable. Of course, the ideal situation is that you do better, but you can't exactly be punished for doing what you said you were going to do. The next step is then to see what the company is going to forecast for the future. If all a company ever does is say that they're going to lose money, well obviously that's not a good business plan, and it will fail.
Robbie Bach has said that E&D will be profitable in FY '08. Focus on that. Yes, the division has lots of money previously, but that was expected. You can criticize that the Xbox didn't make any profits, but that's not really the point. However, now is the time that this will change. Whether or not it actually happens, of course, remains to be seen.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
No, you're right. They are relying on Halo 3 and GTA IV to drive sales. I don't care how awesome Mass Effect and Assassin's Creed and all the rest look, those aren't the type of games that sell systems in large amounts. Halo 3 and GTA IV do fit into that category and it will be interesting to see just how many people were waiting for Halo 3 to buy the 360 versus those that bought the system already and are waiting for the game. Same with GTA IV.
I personally know 3 people who recently bought a 360 after seeing videos of Assassin's Creed and Mass Effect. Those games are going to be selling systems.
I think the both of you are right. All of those games are going to sell systems.
Personally, I think MS's poaching of GTA from being a Sony exclusive (timed exclusive, but exclusive none the less) and the fact that MS is selling their version of GTA IV as the "complete GTA IV experience" is going to be the biggest thorn in the side of Sony and the PS3. Look at the charts...GTA III, VC, and SA are three of the four HIGHEST selling video games for the PS2 (including the highest seller over all, SA). Now that has been all-but-nullified this generation.
Why would MS be preparing to throw in the towel on the eve of what could be the BEST fall/winter release season for console games and when you could argue that their biggest rival (PS3) in back on their heels?
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
I'm thinking no. Look I don't know for sure. All I see is red, money lost, stocks being sold, people leaving the company, conventions being canceled. I've been in jobs where people got shit canned and there's always little hints indicating that things are about to go tits up. Perhaps I'm a little biased because of that but from what I'm seeing, my prediction is that the xbox 360's the last xbox and Microsoft's done.
We'll know for sure once September rolls around and the holidays come and pass.
So you're Joe Schmo from marketing getting shit canned to a giant corporation backing out of a massive industry? This is your reasoning?
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
It didn't turn a profit in 2007. So what? Happens in all kinds of businesses, for different reasons, all the time, and without context it doesn't mean much.
Is Microsoft in a good position to turn profits from the Xbox in the future? If you're saying they're not, why not? Track record isn't good enough. You have to explain why they lost money in the past and why they'll lose money in the same way again.
Why would I have to explain why they lost money in the past? Lack of strong titles and their targeting of the mainstream perhaps? Failure to secure enough of the market before the competitors had a chance to catch up?
I don't know to be honest, nobody really mentionned the why. What I do know is I don't see them doing anything differently with their current business model. There hasn't been a change in respect to Live! pricing. Granted their lineup is a little stronger, perhaps that might turn the tide. Personally I think it's a little too late.
So what're you saying is that they've lost money in the past, and therefore will lose money in the future? Because with that logic, every investment ever made shouldn't have made money.
That's not what I said. I said that because they've been losing money, the fact that the competition has arrived and is gaining ground and the fact that their approach hasn't appeared to change, they will continue to lose money.
That's the logic.
And it's not because I'm drawing conclusions regarding one investment, in this case a bad one or poorly approached one that it applies to every single investment scenario ever conceived. That's a non sequitur.
All I see is red, money lost, stocks being sold, people leaving the company, conventions being canceled.
You will see more Microsofties selling their stock, especially today. MSFT hit a 52-week high. I chatted with several co-workers about how bloody high the stock has been. I'm thinking about selling some of my shares. Does that mean I have no faith in the company? Or that I think MS/games/etc. is going downhill?
Hell no. I'm looking to move and buy a new house, and frankly, this is a great time to cash out some of my stock. Yes, I think it'll continue to go up over time, but I know that it'll constantly bounce around and it's been a good idea to take advantage of the highs when I can.
One thing I've learned over the years ... the people in this business are people too. We have our families, hobbies, our own personal finances, etc. I don't fault any executive for selling their stock, because they have the right to do so, just like I do.
Of course the one thing I have absolutely no tolerance for is insider trading. That's illegal and immoral. But 99% of the time, people selling stock is not because of that.
Microsoft's approach isn't changing because it doesn't have to. They've been trying to lock down exclusives, improve their hardware, and offer something none of their competitors do (a compelling online service). They've even been trying (unsuccessfully) to make headway in Japan. There's really nothing Microsoft could be doing differently other than trying to emulate Nintendo.
I still don't think the Wii is really taking customers away from Microsoft and Sony, so much as making new gamers and providing a solid second console at such a low price (if you can find one).
Apparently, almost none. Give it another week to see what the fire sale has done, but I bet that'll be just a blip. You need two things to sell games. Great games, resonable price. PS3 has neither right now.
One thing you guys need to remember is that what stockholders and financial analysts often pay more attention to are the promises that are made, and whether or not a business is on track, per what was forecasted.
From what I can remember, there was no promise that games division was going to be profitable with the original Xbox, or even for fiscal year 2007. If MS said that it was going to lose X amount of money in a certain period, and that's what happened, then that's acceptable. Of course, the ideal situation is that you do better, but you can't exactly be punished for doing what you said you were going to do. The next step is then to see what the company is going to forecast for the future. If all a company ever does is say that they're going to lose money, well obviously that's not a good business plan, and it will fail.
Robbie Bach has said that E&D will be profitable in FY '08. Focus on that. Yes, the division has lots of money previously, but that was expected. You can criticize that the Xbox didn't make any profits, but that's not really the point. However, now is the time that this will change. Whether or not it actually happens, of course, remains to be seen.
Yeah but executives promised the same thing for FY '07
So what're you saying is that they've lost money in the past, and therefore will lose money in the future? Because with that logic, every investment ever made shouldn't have made money.
That's not what I said. I said that because they've been losing money, the fact that the competition has arrived and is gaining ground and the fact that their approach hasn't appeared to change, they will continue to lose money.
That's the logic.
And it's not because I'm drawing conclusions regarding one investment, in this case a bad one or poorly approached one that it applies to every single investment scenario ever conceived. That's a non sequitur.
But you said you didn't know why they were losing money; if you don't, then it doesn't make any sense to predict whether they would continue to do so or not. Why would their "approach" even mean anything to you if you don't know how it affected their money loss.
All I see is red, money lost, stocks being sold, people leaving the company, conventions being canceled.
You will see more Microsofties selling their stock, especially today. MSFT hit a 52-week high. I chatted with several co-workers about how bloody high the stock has been. I'm thinking about selling some of my shares. Does that mean I have no faith in the company? Or that I think MS/games/etc. is going downhill?
Hell no. I'm looking to move and buy a new house, and frankly, this is a great time to cash out some of my stock. Yes, I think it'll continue to go up over time, but I know that it'll constantly bounce around and it's been a good idea to take advantage of the highs when I can.
One thing I've learned over the years ... the people in this business are people too. We have our families, hobbies, our own personal finances, etc. I don't fault any executive for selling their stock, because they have the right to do so, just like I do.
Of course the one thing I have absolutely no tolerance for is insider trading. That's illegal and immoral. But 99% of the time, people selling stock is not because of that.
This is one of the senior executives selling 6 million dollars worth.
Meiz, you don't know what you're talking about. What you need to understand is that the initial loss was always part of Microsoft's plan. The XBox in its entirety was one big initial loss for MS; an investment to get a foothold in the gaming industry, and it did a pretty good job all things considered. Losses are not always a bad thing. Microsoft has never made a secret of the fact that the 360 would make losses at first before it started to turn a profit, but that time is pretty much imminent.
Zek, trust me dude, you arent the first person to try to explain that to him, he dosen't listen
Balefuego on
[SIGPIC][/SIGPIC]
0
Clutch414Dodge Swinger.......WHENEVER IT FEELS RIGHT!!!Registered Userregular
edited July 2007
I don't understand how you think that MS's approach hasn't changed this gen.
Look at the games that used to be third-party exclusives for Sony last gen that MS has either lured away: GTA, Ace Combat, Devil May Cry, Katamari, etc.
Also, add to that the fact they going to cut production costs this generation on the 360 (which they couldn't do so much last gen) and how can you say that they haven't adjusted their strategy?
I think the both of you are right. All of those games are going to sell systems.
Personally, I think MS's poaching of GTA from being a Sony exclusive (timed exclusive, but exclusive none the less) and the fact that MS is selling their version of GTA IV as the "complete GTA IV experience" is going to be the biggest thorn in the side of Sony and the PS3. Look at the charts...GTA III, VC, and SA are three of the four HIGHEST selling video games for the PS2 (including the highest seller over all, SA). Now that has been all-but-nullified this generation.
Why would MS be preparing to throw in the towel on the eve of what could be the BEST fall/winter release season for console games and when you could argue that their biggest rival (PS3) in back on their heels?
Exactly. People buy these systems for the games. The ultimate question of which one to buy comes down to "Where are the games I want?". People have loyalty to games, not the companies. Look at Nintendo's drop from SNES to N64. People wanted Mario/Zelda/Metroid. They don't care what system it's on. Brand loyalty when it comes to the system does not exist.
So ultimately it comes down to the games. And in this case, the 360 wins by default, cause it's shitloads cheaper then the PS3. That, plus big high profile games they've managed to poach from Sony, puts them ahead. And once your ahead, you only gain speed. The larger your user base, the more developers want to work on your system, the more games you have, the more games you sell, the more money you make, and so on.
And, whether your fanboy heart wants to admit it or not, this holiday season is the deciding time. Both consoles have lots of big name games coming out. If the 360 can pull ahead here, they've pretty much won. And I don't see the prospects as good for the PS3. It's not gonna die or anything, but it's not gonna do as good as Sony wants either.
Like I said before, this isn't the time to fold. This is the time to go for the kill. And MS is smart enough to know that.
So what're you saying is that they've lost money in the past, and therefore will lose money in the future? Because with that logic, every investment ever made shouldn't have made money.
That's not what I said. I said that because they've been losing money, the fact that the competition has arrived and is gaining ground and the fact that their approach hasn't appeared to change, they will continue to lose money.
That's the logic.
And it's not because I'm drawing conclusions regarding one investment, in this case a bad one or poorly approached one that it applies to every single investment scenario ever conceived. That's a non sequitur.
But you said you didn't know why they were losing money; if you don't, then it doesn't make any sense to predict whether they would continue to do so or not. Why would their "approach" even mean anything to you if you don't know how it affected their money loss.
When I say I don't know why is because I don't have a fly on the wall in the X-box division's HQ. I enumerated a few possibilities. The fact that they're supposedly losing 126$ per console could be another one.
The reason their approach means anything is that it's been rather static. Usually, if you're in a situation where you're losing money in the marketplace companies implement different marketing strategies in order to be able to turn a profit. If there were any recently, they're rather transparent other then what seems to be a more solid lineup.
So what're you saying is that they've lost money in the past, and therefore will lose money in the future? Because with that logic, every investment ever made shouldn't have made money.
That's not what I said. I said that because they've been losing money, the fact that the competition has arrived and is gaining ground and the fact that their approach hasn't appeared to change, they will continue to lose money.
That's the logic.
And it's not because I'm drawing conclusions regarding one investment, in this case a bad one or poorly approached one that it applies to every single investment scenario ever conceived. That's a non sequitur.
But you said you didn't know why they were losing money; if you don't, then it doesn't make any sense to predict whether they would continue to do so or not. Why would their "approach" even mean anything to you if you don't know how it affected their money loss.
When I say I don't know why is because I don't have a fly on the wall in the X-box division's HQ. I enumerated a few possibilities. The fact that they're supposedly losing 126$ per console could be another one.
The reason their approach means anything is that it's been rather static. Usually, if you're in a situation where you're losing money in the marketplace companies implement different marketing strategies in order to be able to turn a profit. If there were any recently, they're rather transparent other then what seems to be a more solid lineup.
So they were losing $126 per console...AT LAUNCH. This means absolutely nothing now.
The problem is that the original source it links to (some page on http://www.directionsonmicrosoft.com) is now showing a 404. For all we know, the writer there might have misquoted an executive.
If you can find an actual press release or financial statement promising E&D profitability in FY '07, then I'd love to see it. You should be able to find one easily, if it exists. It's certainly not hard to find similar articles with FY '08. Until then, your claim is hearsay.
If you can prove me wrong, then go for it. I'll gladly take my lumps if I'm mistaken.
This is one of the senior executives selling 6 million dollars worth.
So? BillG sells stock all the time. Are you saying that senior execs aren't allowed to sell their stocks at all? Or that they have to get permission before they do so? I'm afraid it doesn't work that way.
By law, senior execs are supposed to disclose when they sell large amounts of stock. This is the case for all companies. It's to battle against illegal insider trading (which as I said before, is bad). Thus, by law, an exec selling stock isn't supposed to mean anything ... because otherwise it would imply illegal insider trading. So, an exec (and I'm talking about any exec, not just a MS one) selling stock means that they're just selling stock, and you shouldn't read anymore into it.
tl;dr - If a Nintendo exec sold millions of shares of their stock, does that mean Nintendo is teh d00med? Or a Sony exec? Of course not. Like I said in my original post, execs are people too. Heck, maybe they're like me and trying to buy a new house, and need some cash for a down payment. It is summer and the house buying season, you know ...
Meiz, you don't know what you're talking about. What you need to understand is that the initial loss was always part of Microsoft's plan. The XBox in its entirety was one big initial loss for MS; an investment to get a foothold in the gaming industry, and it did a pretty good job all things considered. Losses are not always a bad thing. Microsoft has never made a secret of the fact that the 360 would make losses at first before it started to turn a profit, but that time is pretty much imminent.
Yeah I realize that loses are not a bad thing. I was impressed with their gusto in getting their foot in the door with the xbox. I wasn't surprised to hear that the 360 was making losses initially. But then I read that the whole endeavor up until now cost them 5-6 billion, they're lost 200+ million in the most recent quarter and they're banking on FY '08 in order to turn the tide. Then I'm like, man, has it really been 6 years. Then the news of the hardware problems amounting to 1 billion in losses on top of the current deficit and that's why I'm thinking things are not looking good as far as long term investments go.
So what're you saying is that they've lost money in the past, and therefore will lose money in the future? Because with that logic, every investment ever made shouldn't have made money.
That's not what I said. I said that because they've been losing money, the fact that the competition has arrived and is gaining ground and the fact that their approach hasn't appeared to change, they will continue to lose money.
That's the logic.
And it's not because I'm drawing conclusions regarding one investment, in this case a bad one or poorly approached one that it applies to every single investment scenario ever conceived. That's a non sequitur.
But you said you didn't know why they were losing money; if you don't, then it doesn't make any sense to predict whether they would continue to do so or not. Why would their "approach" even mean anything to you if you don't know how it affected their money loss.
When I say I don't know why is because I don't have a fly on the wall in the X-box division's HQ. I enumerated a few possibilities. The fact that they're supposedly losing 126$ per console could be another one.
The reason their approach means anything is that it's been rather static. Usually, if you're in a situation where you're losing money in the marketplace companies implement different marketing strategies in order to be able to turn a profit. If there were any recently, they're rather transparent other then what seems to be a more solid lineup.
Meiz, you don't know what you're talking about. What you need to understand is that the initial loss was always part of Microsoft's plan. The XBox in its entirety was one big initial loss for MS; an investment to get a foothold in the gaming industry, and it did a pretty good job all things considered. Losses are not always a bad thing. Microsoft has never made a secret of the fact that the 360 would make losses at first before it started to turn a profit, but that time is pretty much imminent.
Yeah I realize that loses are not a bad thing. I was impressed with their gusto in getting their foot in the door with the xbox. I wasn't surprised to hear that the 360 was making losses initially. But then I read that the whole endeavor up until now cost them 5-6 billion, they're lost 200+ million in the most recent quarter and they're banking on FY '08 in order to turn the tide. Then I'm like, man, has it really been 6 years. Then the news of the hardware problems amounting to 1 billion in losses on top of the current deficit and that's why I'm thinking things are not looking good as far as long term investments go.
Implementation of Windows Vista has just happened. Games for Windows brand is taking off in a big way, the zune and all the other Msoft entertainment devices are all coming to fruition. Stop thiinking of the entertainment division as JUST the 360. The whole reason they went into the home console business was to integrate all their shit into one to put a Msoft product in every home. To an extent this is working.
So what're you saying is that they've lost money in the past, and therefore will lose money in the future? Because with that logic, every investment ever made shouldn't have made money.
That's not what I said. I said that because they've been losing money, the fact that the competition has arrived and is gaining ground and the fact that their approach hasn't appeared to change, they will continue to lose money.
That's the logic.
And it's not because I'm drawing conclusions regarding one investment, in this case a bad one or poorly approached one that it applies to every single investment scenario ever conceived. That's a non sequitur.
But you said you didn't know why they were losing money; if you don't, then it doesn't make any sense to predict whether they would continue to do so or not. Why would their "approach" even mean anything to you if you don't know how it affected their money loss.
When I say I don't know why is because I don't have a fly on the wall in the X-box division's HQ. I enumerated a few possibilities. The fact that they're supposedly losing 126$ per console could be another one.
The reason their approach means anything is that it's been rather static. Usually, if you're in a situation where you're losing money in the marketplace companies implement different marketing strategies in order to be able to turn a profit. If there were any recently, they're rather transparent other then what seems to be a more solid lineup.
So I read pages 1-10 but 11-20 not at all. You guys heard about the european not X07 event? Yeah, MS is throwing some kind of event that is not X07 in europe. So can some one update me on the doomed theories as of the news of the euro event and also PAX?
The problem is that the original source it links to (some page on http://www.directionsonmicrosoft.com) is now showing a 404. For all we know, the writer there might have misquoted an executive.
If you can find an actual press release or financial statement promising E&D profitability in FY '07, then I'd love to see it. You should be able to find one easily, if it exists. It's certainly not hard to find similar articles with FY '08. Until then, your claim is hearsay.
If you can prove me wrong, then go for it. I'll gladly take my lumps if I'm mistaken.
That's damned low. Because the article is a year old and most likely doesn't exist anymore you want me to find a press release or else you're dismissing it as hearsay? It's an independent source and it charges money now, 800$ for a basic subscription. That article was probably one of the "samples" they had on the site. So, no, I don't think I'll be able to find another source in which both kotaku and ars technica decided to write an article about. I don't see how you can simply dismiss it. Tell you what, how about you pay the 800 bucks to prove the article never existed in the first place, how about that?
This is one of the senior executives selling 6 million dollars worth.
So? BillG sells stock all the time. Are you saying that senior execs aren't allowed to sell their stocks at all? Or that they have to get permission before they do so? I'm afraid it doesn't work that way.
By law, senior execs are supposed to disclose when they sell large amounts of stock. This is the case for all companies. It's to battle against illegal insider trading (which as I said before, is bad). Thus, by law, an exec selling stock isn't supposed to mean anything ... because otherwise it would imply illegal insider trading. So, an exec (and I'm talking about any exec, not just a MS one) selling stock means that they're just selling stock, and you shouldn't read anymore into it.
tl;dr - If a Nintendo exec sold millions of shares of their stock, does that mean Nintendo is teh d00med? Or a Sony exec? Of course not. Like I said in my original post, execs are people too. Heck, maybe they're like me and trying to buy a new house, and need some cash for a down payment. It is summer and the house buying season, you know ...
The reason I'm reading into it is because he sold it before the investment paid off. I think that's a valid concern.
So what're you saying is that they've lost money in the past, and therefore will lose money in the future? Because with that logic, every investment ever made shouldn't have made money.
That's not what I said. I said that because they've been losing money, the fact that the competition has arrived and is gaining ground and the fact that their approach hasn't appeared to change, they will continue to lose money.
That's the logic.
And it's not because I'm drawing conclusions regarding one investment, in this case a bad one or poorly approached one that it applies to every single investment scenario ever conceived. That's a non sequitur.
But you said you didn't know why they were losing money; if you don't, then it doesn't make any sense to predict whether they would continue to do so or not. Why would their "approach" even mean anything to you if you don't know how it affected their money loss.
When I say I don't know why is because I don't have a fly on the wall in the X-box division's HQ. I enumerated a few possibilities. The fact that they're supposedly losing 126$ per console could be another one.
The reason their approach means anything is that it's been rather static. Usually, if you're in a situation where you're losing money in the marketplace companies implement different marketing strategies in order to be able to turn a profit. If there were any recently, they're rather transparent other then what seems to be a more solid lineup.
The problem is that the original source it links to (some page on http://www.directionsonmicrosoft.com) is now showing a 404. For all we know, the writer there might have misquoted an executive.
If you can find an actual press release or financial statement promising E&D profitability in FY '07, then I'd love to see it. You should be able to find one easily, if it exists. It's certainly not hard to find similar articles with FY '08. Until then, your claim is hearsay.
If you can prove me wrong, then go for it. I'll gladly take my lumps if I'm mistaken.
That's damned low. Because the article is a year old and most likely doesn't exist anymore you want me to find a press release or else you're dismissing it as hearsay? It's an independent source and it charges money now, 800$ for a basic subscription. That article was probably one of the "samples" they had on the site. So, no, I don't think I'll be able to find another source in which both kotaku and ars technica decided to write an article about. I don't see how you can simply dismiss it. Tell you what, how about you pay the 800 bucks to prove the article never existed in the first place, how about that?
This is one of the senior executives selling 6 million dollars worth.
So? BillG sells stock all the time. Are you saying that senior execs aren't allowed to sell their stocks at all? Or that they have to get permission before they do so? I'm afraid it doesn't work that way.
By law, senior execs are supposed to disclose when they sell large amounts of stock. This is the case for all companies. It's to battle against illegal insider trading (which as I said before, is bad). Thus, by law, an exec selling stock isn't supposed to mean anything ... because otherwise it would imply illegal insider trading. So, an exec (and I'm talking about any exec, not just a MS one) selling stock means that they're just selling stock, and you shouldn't read anymore into it.
tl;dr - If a Nintendo exec sold millions of shares of their stock, does that mean Nintendo is teh d00med? Or a Sony exec? Of course not. Like I said in my original post, execs are people too. Heck, maybe they're like me and trying to buy a new house, and need some cash for a down payment. It is summer and the house buying season, you know ...
The reason I'm reading into it is because he sold it before the investment paid off. I think that's a valid concern.
Did you not see the part where he said that MSFT reached a 52-week high? That's why he sold his stock. Nothing to do with the H+E division.
How did his investment not pay off? How much were those stocks worth at purchase? was 6 mill a ridiculously low amount that would show he bailed before investments reached fruition.
When I say I don't know why is because I don't have a fly on the wall in the X-box division's HQ. I enumerated a few possibilities. The fact that they're supposedly losing 126$ per console could be another one.
The reason their approach means anything is that it's been rather static. Usually, if you're in a situation where you're losing money in the marketplace companies implement different marketing strategies in order to be able to turn a profit. If there were any recently, they're rather transparent other then what seems to be a more solid lineup.
How did his investment not pay off? How much were those stocks worth at purchase? was 6 mill a ridiculously low amount that would show he bailed before investments reached fruition.
When I say I don't know why is because I don't have a fly on the wall in the X-box division's HQ. I enumerated a few possibilities. The fact that they're supposedly losing 126$ per console could be another one.
The reason their approach means anything is that it's been rather static. Usually, if you're in a situation where you're losing money in the marketplace companies implement different marketing strategies in order to be able to turn a profit. If there were any recently, they're rather transparent other then what seems to be a more solid lineup.
I know when he sold it. You said he sold it "Before it paid off" I was wondering how you came to this conclusion.
The red ring thing MAY have ended up affecting stock prices, but it didn't however, your payoff comment would lead the reader to believe that the stock had some imaginary value at which point it would be smart to sell....a value that hadn't been reached, I was wondering what the backing to that line of thinking was.
I know when he sold it. You said he sold it "Before it paid off" I was wondering how you came to this conclusion.
The red ring thing MAY have ended up affecting stock prices, but it didn't however, your payoff comment would lead the reader to believe that the stock had some imaginary value at which point it would be smart to sell....a value that hadn't been reached, I was wondering what the backing to that line of thinking was.
Because everyone is stating that the xbox is going to pull a profit. Why sell it now and not wait until that holds fruition, the stock stabilizes and he can sell it when the stock's even higher?
I know when he sold it. You said he sold it "Before it paid off" I was wondering how you came to this conclusion.
The red ring thing MAY have ended up affecting stock prices, but it didn't however, your payoff comment would lead the reader to believe that the stock had some imaginary value at which point it would be smart to sell....a value that hadn't been reached, I was wondering what the backing to that line of thinking was.
Because everyone is stating that the xbox is going to pull a profit. Why sell it now and not wait until that holds fruition, the stock stabilizes and he can sell it when the stock's even higher?
Maybe he wanted to buy a summer house in Tibet. Stop analysing something like you know even the slightest bit about the situation.
That line of reasoning counts towards NEVER selling the stock, remember, it is MS stock, not 360 stock. MS is always going to be releasing some product down the line which would pump up profits and their stock price. At some point you have to sell. You can't wait forever, and the 360 is such a small part of MS that I can't see it's profits really affecting MS stock price as a whole .
stranger678 on
0
Clutch414Dodge Swinger.......WHENEVER IT FEELS RIGHT!!!Registered Userregular
I know when he sold it. You said he sold it "Before it paid off" I was wondering how you came to this conclusion.
The red ring thing MAY have ended up affecting stock prices, but it didn't however, your payoff comment would lead the reader to believe that the stock had some imaginary value at which point it would be smart to sell....a value that hadn't been reached, I was wondering what the backing to that line of thinking was.
Because everyone is stating that the xbox is going to pull a profit. Why sell it now and not wait until that holds fruition, the stock stabilizes and he can sell it when the stock's even higher?
You're saying that like he sold off ALL of his stock.
That's damned low. Because the article is a year old and most likely doesn't exist anymore you want me to find a press release or else you're dismissing it as hearsay? It's an independent source and it charges money now, 800$ for a basic subscription. That article was probably one of the "samples" they had on the site. So, no, I don't think I'll be able to find another source in which both kotaku and ars technica decided to write an article about. I don't see how you can simply dismiss it. Tell you what, how about you pay the 800 bucks to prove the article never existed in the first place, how about that?
Who else has been providing sources here?
Yes, I'm saying it's hearsay, until I can actually read the article. It's not a diss on you, but it's just how it works. It's very easy to quote things and not back it up, and people do it all the time.
It looks like we're both right: "Because Microsoft sells each Xbox game console at a loss, in hopes that future game sales will generate net profits, Bach predicted that the Xbox business would continue to lose money through FY'07, finally becoming profitable in FY'08 (one year later than Microsoft has predicted in the past)."
So I will take my lumps. Someone did predict profitability in FY'07, although it also looks like that was re-forecasted for FY'08 (don't know when that happened though). Whether or not that is re-forcasted again, of course, remains to be seen.
The reason I'm reading into it is because he sold it before the investment paid off. I think that's a valid concern.
Wha? Investment paid off? What are you talking about?
Every employee gets stock as part of their compensation (bonuses, promotions, raises, etc.). I have no idea how much Robbie Bach has of stock, but I'm pretty sure he didn't sell all of it. If he's like me, he sold just enough to cover his needs. Since I'm not Robbie's financial advisor or his wife, I don't know what "his investments" are, or what his financial plans/goals, etc. Nor should we, as that's his personal life.
People always like to gossip whenever anyone sells stock. It's fun to think of it as some uber conspiracy plan, but unless you're doing some illegal (like Martha Stewart did), the actual reasons for doing so are rather benign.
Posts
From what I can remember, there was no promise that games division was going to be profitable with the original Xbox, or even for fiscal year 2007. If MS said that it was going to lose X amount of money in a certain period, and that's what happened, then that's acceptable. Of course, the ideal situation is that you do better, but you can't exactly be punished for doing what you said you were going to do. The next step is then to see what the company is going to forecast for the future. If all a company ever does is say that they're going to lose money, well obviously that's not a good business plan, and it will fail.
Robbie Bach has said that E&D will be profitable in FY '08. Focus on that. Yes, the division has lots of money previously, but that was expected. You can criticize that the Xbox didn't make any profits, but that's not really the point. However, now is the time that this will change. Whether or not it actually happens, of course, remains to be seen.
- Don't add me, I'm at/near the friend limit
Steam: JC_Rooks
Twitter: http://twitter.com/JiunweiC
I work on this: http://www.xbox.com
I think the both of you are right. All of those games are going to sell systems.
Personally, I think MS's poaching of GTA from being a Sony exclusive (timed exclusive, but exclusive none the less) and the fact that MS is selling their version of GTA IV as the "complete GTA IV experience" is going to be the biggest thorn in the side of Sony and the PS3. Look at the charts...GTA III, VC, and SA are three of the four HIGHEST selling video games for the PS2 (including the highest seller over all, SA). Now that has been all-but-nullified this generation.
Why would MS be preparing to throw in the towel on the eve of what could be the BEST fall/winter release season for console games and when you could argue that their biggest rival (PS3) in back on their heels?
His logic is undeniable.
He so has to die.
That's not what I said. I said that because they've been losing money, the fact that the competition has arrived and is gaining ground and the fact that their approach hasn't appeared to change, they will continue to lose money.
That's the logic.
And it's not because I'm drawing conclusions regarding one investment, in this case a bad one or poorly approached one that it applies to every single investment scenario ever conceived. That's a non sequitur.
Hell no. I'm looking to move and buy a new house, and frankly, this is a great time to cash out some of my stock. Yes, I think it'll continue to go up over time, but I know that it'll constantly bounce around and it's been a good idea to take advantage of the highs when I can.
One thing I've learned over the years ... the people in this business are people too. We have our families, hobbies, our own personal finances, etc. I don't fault any executive for selling their stock, because they have the right to do so, just like I do.
Of course the one thing I have absolutely no tolerance for is insider trading. That's illegal and immoral. But 99% of the time, people selling stock is not because of that.
- Don't add me, I'm at/near the friend limit
Steam: JC_Rooks
Twitter: http://twitter.com/JiunweiC
I work on this: http://www.xbox.com
Expensive ground.
The ground it is being run into.
I still don't think the Wii is really taking customers away from Microsoft and Sony, so much as making new gamers and providing a solid second console at such a low price (if you can find one).
Apparently, almost none. Give it another week to see what the fire sale has done, but I bet that'll be just a blip. You need two things to sell games. Great games, resonable price. PS3 has neither right now.
Yeah but executives promised the same thing for FY '07
Source:
http://www.kotaku.com/gaming/microsoft/Xbox-360-profitable-by-july-145250.php
But you said you didn't know why they were losing money; if you don't, then it doesn't make any sense to predict whether they would continue to do so or not. Why would their "approach" even mean anything to you if you don't know how it affected their money loss.
This is one of the senior executives selling 6 million dollars worth.
Look at the games that used to be third-party exclusives for Sony last gen that MS has either lured away: GTA, Ace Combat, Devil May Cry, Katamari, etc.
Also, add to that the fact they going to cut production costs this generation on the 360 (which they couldn't do so much last gen) and how can you say that they haven't adjusted their strategy?
Exactly. People buy these systems for the games. The ultimate question of which one to buy comes down to "Where are the games I want?". People have loyalty to games, not the companies. Look at Nintendo's drop from SNES to N64. People wanted Mario/Zelda/Metroid. They don't care what system it's on. Brand loyalty when it comes to the system does not exist.
So ultimately it comes down to the games. And in this case, the 360 wins by default, cause it's shitloads cheaper then the PS3. That, plus big high profile games they've managed to poach from Sony, puts them ahead. And once your ahead, you only gain speed. The larger your user base, the more developers want to work on your system, the more games you have, the more games you sell, the more money you make, and so on.
And, whether your fanboy heart wants to admit it or not, this holiday season is the deciding time. Both consoles have lots of big name games coming out. If the 360 can pull ahead here, they've pretty much won. And I don't see the prospects as good for the PS3. It's not gonna die or anything, but it's not gonna do as good as Sony wants either.
Like I said before, this isn't the time to fold. This is the time to go for the kill. And MS is smart enough to know that.
When I say I don't know why is because I don't have a fly on the wall in the X-box division's HQ. I enumerated a few possibilities. The fact that they're supposedly losing 126$ per console could be another one.
Source:
http://arstechnica.com/news.ars/post/20051123-5621.html
The reason their approach means anything is that it's been rather static. Usually, if you're in a situation where you're losing money in the marketplace companies implement different marketing strategies in order to be able to turn a profit. If there were any recently, they're rather transparent other then what seems to be a more solid lineup.
So they were losing $126 per console... AT LAUNCH. This means absolutely nothing now.
If you can find an actual press release or financial statement promising E&D profitability in FY '07, then I'd love to see it. You should be able to find one easily, if it exists. It's certainly not hard to find similar articles with FY '08. Until then, your claim is hearsay.
If you can prove me wrong, then go for it. I'll gladly take my lumps if I'm mistaken.
So? BillG sells stock all the time. Are you saying that senior execs aren't allowed to sell their stocks at all? Or that they have to get permission before they do so? I'm afraid it doesn't work that way.
By law, senior execs are supposed to disclose when they sell large amounts of stock. This is the case for all companies. It's to battle against illegal insider trading (which as I said before, is bad). Thus, by law, an exec selling stock isn't supposed to mean anything ... because otherwise it would imply illegal insider trading. So, an exec (and I'm talking about any exec, not just a MS one) selling stock means that they're just selling stock, and you shouldn't read anymore into it.
If you want to know more about it, read here: http://en.wikipedia.org/wiki/Insider_trading
tl;dr - If a Nintendo exec sold millions of shares of their stock, does that mean Nintendo is teh d00med? Or a Sony exec? Of course not. Like I said in my original post, execs are people too. Heck, maybe they're like me and trying to buy a new house, and need some cash for a down payment. It is summer and the house buying season, you know ...
- Don't add me, I'm at/near the friend limit
Steam: JC_Rooks
Twitter: http://twitter.com/JiunweiC
I work on this: http://www.xbox.com
Yeah I realize that loses are not a bad thing. I was impressed with their gusto in getting their foot in the door with the xbox. I wasn't surprised to hear that the 360 was making losses initially. But then I read that the whole endeavor up until now cost them 5-6 billion, they're lost 200+ million in the most recent quarter and they're banking on FY '08 in order to turn the tide. Then I'm like, man, has it really been 6 years. Then the news of the hardware problems amounting to 1 billion in losses on top of the current deficit and that's why I'm thinking things are not looking good as far as long term investments go.
They are making $75 per console as of May
Implementation of Windows Vista has just happened. Games for Windows brand is taking off in a big way, the zune and all the other Msoft entertainment devices are all coming to fruition. Stop thiinking of the entertainment division as JUST the 360. The whole reason they went into the home console business was to integrate all their shit into one to put a Msoft product in every home. To an extent this is working.
2005? Is that article still relevant?
That's damned low. Because the article is a year old and most likely doesn't exist anymore you want me to find a press release or else you're dismissing it as hearsay? It's an independent source and it charges money now, 800$ for a basic subscription. That article was probably one of the "samples" they had on the site. So, no, I don't think I'll be able to find another source in which both kotaku and ars technica decided to write an article about. I don't see how you can simply dismiss it. Tell you what, how about you pay the 800 bucks to prove the article never existed in the first place, how about that?
Who else has been providing sources here?
The reason I'm reading into it is because he sold it before the investment paid off. I think that's a valid concern.
I stand corrected.
Did you not see the part where he said that MSFT reached a 52-week high? That's why he sold his stock. Nothing to do with the H+E division.
Your statement lacks backing, please elaborate.
What are you standing on?
Here's the article, again.
http://www.engadget.com/2007/07/12/xbox-360-exec-robbie-bachs-personal-red-ring-of-death-insider/
It was right before the red ring press release. Granted the stock didn't really budge but it was a bit fishy.
This amuses me, but it was bottom'd
The red ring thing MAY have ended up affecting stock prices, but it didn't however, your payoff comment would lead the reader to believe that the stock had some imaginary value at which point it would be smart to sell....a value that hadn't been reached, I was wondering what the backing to that line of thinking was.
Because everyone is stating that the xbox is going to pull a profit. Why sell it now and not wait until that holds fruition, the stock stabilizes and he can sell it when the stock's even higher?
Maybe he wanted to buy a summer house in Tibet. Stop analysing something like you know even the slightest bit about the situation.
You're saying that like he sold off ALL of his stock.
No dude, we decided back on page 12 that he just wanted a kick ass boat. MS guys love boats.
Anyway, I think I found the article you were looking for: http://www.directionsonmicrosoft.com/sample/DOMIS/update/2006/09sep/0906fbhif.htm
It looks like we're both right:
"Because Microsoft sells each Xbox game console at a loss, in hopes that future game sales will generate net profits, Bach predicted that the Xbox business would continue to lose money through FY'07, finally becoming profitable in FY'08 (one year later than Microsoft has predicted in the past)."
So I will take my lumps. Someone did predict profitability in FY'07, although it also looks like that was re-forecasted for FY'08 (don't know when that happened though). Whether or not that is re-forcasted again, of course, remains to be seen.
Wha? Investment paid off? What are you talking about?
Every employee gets stock as part of their compensation (bonuses, promotions, raises, etc.). I have no idea how much Robbie Bach has of stock, but I'm pretty sure he didn't sell all of it. If he's like me, he sold just enough to cover his needs. Since I'm not Robbie's financial advisor or his wife, I don't know what "his investments" are, or what his financial plans/goals, etc. Nor should we, as that's his personal life.
People always like to gossip whenever anyone sells stock. It's fun to think of it as some uber conspiracy plan, but unless you're doing some illegal (like Martha Stewart did), the actual reasons for doing so are rather benign.
- Don't add me, I'm at/near the friend limit
Steam: JC_Rooks
Twitter: http://twitter.com/JiunweiC
I work on this: http://www.xbox.com