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Opinion Rumor Business A huge purchase is imminent within 1 month from now

ZywyPL

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Nov 27, 2018
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The way MS has turned their fanbase into a bunch of beggars is insane to me. Every year now you’re going to have the green army flooding the internet with acquisition wishlists. Y’all embarrassing as fuck.





Apply 2x a day, should help you.
 

Bernd Lauert

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Apr 15, 2018
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True. And I don't believe Xbox has the revenue to sustain this many studios and games in development.

PlayStation, as of their latest FY reports, was half the size of Xbox, and had operating expenditures of $22 billion. 12 studios vs. 23 studios.

Xbox has a yearly revenue of $13 billion (their highest ever), but that's no way enough. If PlayStation's operating expenditure is $22 billion, Xbox's would be $35 to $40 billion (especially with xCloud support, powered by XSX). Until Xbox increases their revenue to at least $30 billion, they'd be leaking over $10-$20 billion every year. I do not see how they'll be able to make another big acquisition and afford another 3,000+ employees.
Humor Boomer GIF
 

Dabaus

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Apr 23, 2018
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When you havent had a memorable game for almost a generation and half that you settle for salivating over corporate acquisitions. Notice how nintendo and sony fans dont sit around fantasizing ALL DAY, EVERYDAY, about which company they should buy next. To the extent that the conversation even exists its in a defensive measure.
 

SaucyJack

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Aug 8, 2013
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So you're worried about their ROI? How many shares do you own? 😂
All these are going to be exclusive. Shit even Deathloop and Ghostwire are timed. I just think it's funny reading all the " no way TES6 and Starfield and Fallout are exclusive"

Did I not just say they're going to be exclusive in the post you quoted? 🤷‍♂️

I’m not remotely worried about their ROI, why are you making a fairly interesting business discussion about feelings?

You can play fantasy M&A if you wish, but in the real world Phil Spencer has to get his strategy for Xbox endorsed by Satya and the board. If he wants to make an acquisition he needs to make a business case. You can bet your ass that ROI is front and centre in that conversation.

In the next few years (say 3) if Xbox isn’t hitting performance targets then Spencer will be fired and replaced. This is how it works. Don Mattrick was once a rising star.

And as you ask I own about $8k ish of MSFT.
 

Bryank75

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yea Sony had the player base, good selection of well known IPs, and world domination on console market currently. even without gamepass equilavent service they will survive.

The only problem is that Sony need more studios, aka major acquisitions ,at least 1 or 2.

Money is the problem here for Sony, unless they come out with another major surprise

I don't think money is an issue unless they are going against MSFT directly for a western company. In that case...yes, it could be more of an issue.

However they have plenty of cash.... I link an article about Sony's free cash flow.


"On consensus forecasts the shares are trading on PER FY3/2023 16.8x with a free cash flow yield of 8.8%. This yield is double that of consensus estimates for Apple on 4.2%, Facebook (NASDAQ:FB) on 4.0%, Amazon (NASDAQ:AMZN) on 3.2% and Alphabet (NASDAQ:GOOG) on 4.5%. Game publishers too have lower free cash flow yields such as Electronic Arts (NASDAQ:EA) on 5.5% and Activision Blizzard (NASDAQ:ATVI) on 5.2%."

As I've pointed out many times here on Gaf, Sony also has very very low debt compared to most companies out there too.
 
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Heisenberg007

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So you believe that the rest of the personal computer division roughly costs less than 5 billion and generates around 44 billion in revenue. Guess it could do.

The three months ended June 30 2021 costed Microsoft 9.2bn up from 8.8bn for the same quarter the last year.

Anyone know if Microsoft has studios like VASG? I have a shitty estimate using LinkedIn with some studios missing for both platforms holders.
It's important to note that these added costs are very recent. They just acquired Bethesda ~6 months ago. These cost estimates are from 2021 and beyond.
 

Heisenberg007

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This is why I was talking about consolidation of operations. They need to streamline that cost base AND make the studio system more productive. Look at 343 Industries with 750 employees toiling to get out their first game since 2015, needing to rope in every spare resource across Xbox Studios for the last year; compare that with 400 employee Insomniac. PlayStation Studios certainly make mistakes and has had failed projects, but they are generally a slick operation pushing out a constant stream of new titles. Xbox Studios needs to get to a similar place.
Agreed. Having said that, there is still a lot of room for improvements in PlayStation Studios as well. While many of their studios are now well-oiled, some still struggle (e.g., Polyphony). But XGS just doesn't run well at all.

And not just 343i. Look at Ninja Theory: released Hellblade in 2017, got acquired in 2018, announced Hellblade 2 in 2019, and as of June 2021, Hellblade 2 hasn't even entered full production yet.
 

reksveks

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It's important to note that these added costs are very recent. They just acquired Bethesda ~6 months ago. These cost estimates are from 2021 and beyond.
Yes they are going to be estimates but they would have had a decent idea of the quarterly costs of running Bethesda.

Thoughts on the cost of the non-xbox part of that division and the revenue that it generates?

Using the following as my source in case others are wondering where I am getting the numbers

 
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Heisenberg007

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You’re right.

Strategically MS had a massive hole, hence the expansion of 1st party. A necessary move if they were genuinely committed to gaming. Zenimax was, I believe, more opportunistic (the perfect storm mentioned in an earlier post) and Spencer has done really well to persuade the board to go big here. IMO he really has to prove now that these investments, combined with the Gamepass, Xcloud strategy is going to deliver the results that the Corporation expects. I would be genuinely shocked if he’s allowed to go big again before delivering results.
Absolutely. That's the reason why I said that I don't believe Xbox will go for another big acquisition. They have exhausted their quota for now, until they prove the ROI is there.

Now the question is, are they growing as quickly as they need to? Because if they are indeed leaking more than $15-$20 billion every year, that's not sustainable. They have made a big bet on revenue projections, and honestly, I think they may have overestimated the impact of Gamepass and Bethesda's acquisition. Otherwise, if they were truly happy with the progress, they would be shouting Gamepass subscriber count from the rooftop. They haven't revealed updated numbers since January 2021.

If growth has indeed plateaued, I do not see how Phil could convince MS to give another cheque for $10 billion. One question would obviously be what's the ROI on previous investments? Or, at the very least, how's the MoM growth percentage?

I work in a multi-billion dollar company as a senior manager. If I have to get even a modest $100,000 extra marketing budget approved, these questions come up and need to be answered. It's common. Businesses are there to earn money, and it all depends on ROI -- not wishes on internet forums.
Sony, on the other hand, are more obviously in a growth phase. They’ve told investors that they’re planning to spend $18 billion over the next 3 year cycle and gaming is the clear focus here. We have seen three modest acquisitions this year and I think we’re going to see a lot more over the next 3 years.

For the record I'm not particularly expecting Sony to acquire a publisher either, but I wouldn’t be surprised to see them do a bunch of modest deals.

Weirdly Mojang doesn’t seem that big a deal now. 🤣
They could buy a publisher, but that's not really their style. Unless they want to hurt Xbox fans by taking away IPs, just like MS did with Bethesda. Though I do not like that.

And to your point, in addition to purchasing those 3 studios, they have also spent money on purchasing Evo, doubling their stakes in Epic, got a 1.93% capital in Kadokawa, and partially funded Discord's Series H funding for a PlayStation partnership.
 

Bernd Lauert

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So how does it work? What magical formula has Xbox found to increase cost efficiency by 100%?
It certainly doesn't work like you described. Quick maths: Xbox game devs are maybe 10k people at most (likely much less). If we assume the cost is $10k per month per employee, we're at $1.2b cost for a year.
 

Heisenberg007

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Nov 16, 2020
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Yes they are going to be estimates but they would have had a decent idea of the quarterly costs of running Bethesda.

Thoughts on the cost of the non-xbox part of that division and the revenue that it generates?

Using the following as my source in case others are wondering where I am getting the numbers

I am not familiar with the non-xbox part of that division, so I can't really comment on that.

But for the Xbox's division, the cost can be easily estimated by comparing it with PlayStation. I am confident about that.
 
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Magic Carpet

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Apr 2, 2020
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Let me see if I have this right, Amazon is buying Steam and will use Steamdeck as the new platform.
Microsoft will ask Amazon to allow Gamepass on the system And if Amazon refuses Microsoft will retaliate by buying Nintendo.
Sony meanwhile will become a game studio that specializes in Disney games. Sony will also buy EA and take all of Europe as the main supporters.
Disney will be moving the headquarter to Germany and focus on how to get more content into China.
China will continue to China.
Eventually Disney buys Sony and has all the media in the world excluding games.
 
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damiank

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Jun 22, 2021
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Scalebound was cancelled because big bad phil came along and thought the game was absolute trash. He immediately called kamiya and told him exactly what he thought about the game and kamiya as a human being. The result is platinum will never work with Microsoft again as long as phil is there.
To put it simply, Phil blocked itself from Kamiya.
 

purvispisgah

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May 10, 2007
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What if.... Valve's buying Valve?

third eye no GIF

‏‏‎ ‎
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at 90% Discount!

Tim And Eric Reaction GIF
Valve doesn't do those kinds of discounts anymore.

(I'm just salty because the summer and winter sales aren't fun like they used to be 😭)
 

Jboemios

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Apr 26, 2020
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I own a Series X and I still find this never ending masterbation over acquisitions to be insane. This non stop consolidation of all things media but massive corporations does no one any good other than keyboard warriors who have no life.
You are not a truly xbro
 

reksveks

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Jun 4, 2020
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I am not familiar with the non-xbox part of that division, so I can't really comment on that.

But for the Xbox's division, the cost can be easily estimated by comparing it with PlayStation. I am confident about that.

I am very confident that there is no chance that Microsoft or anyone else is making 44bn revenue off 5bn cost that would be the greatest hardware margin out of all laptop/tablet manufacturers.

Out of date but the margins haven't changed that much as far as I can tell.

 
Apr 22, 2021
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My 3 guesses, Microsoft buys:

Sega - obviously
Ubisoft - they're acting suspicious lately
Fifa - based on the XSX reveal trailer where soccer/football was featured along with Halo/Forza
Buying FIFA is the equivalent of buying a publisher. They basically corner the European market from Sony. I don’t see it tho.
 
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envyzeal

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Jun 11, 2021
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I really don't like how the industry is behaving lately with all this big acquisition spree, both Sony and Microsoft. Feels like we're heading backwards when it was Nintendo versus Playstation and if you didn't have both systems you'd loose a huge chunk of library.
 

Dabaus

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Apr 23, 2018
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Absolutely. That's the reason why I said that I don't believe Xbox will go for another big acquisition. They have exhausted their quota for now, until they prove the ROI is there.
Now the question is, are they growing as quickly as they need to? Because if they are indeed leaking more than $15-$20 billion every year, that's not sustainable. They have made a big bet on revenue projections, and honestly, I think they may have overestimated the impact of Gamepass and Bethesda's acquisition. Otherwise, if they were truly happy with the progress, they would be shouting Gamepass subscriber count from the rooftop. They haven't revealed updated numbers since January 2021.

If growth has indeed plateaued, I do not see how Phil could convince MS to give another cheque for $10 billion. One question would obviously be what's the ROI on previous investments? Or, at the very least, how's the MoM growth percentage?

I work in a multi-billion dollar company as a senior manager. If I have to get even a modest $100,000 extra marketing budget approved, these questions come up and need to be answered. It's common. Businesses are there to earn money, and it all depends on ROI -- not wishes on internet forums.

They could buy a publisher, but that's not really their style. Unless they want to hurt Xbox fans by taking away IPs, just like MS did with Bethesda. Though I do not like that.

And to your point, in addition to purchasing those 3 studios, they have also spent money on purchasing Evo, doubling their stakes in Epic, got a 1.93% capital in Kadokawa, and partially funded Discord's Series H funding for a PlayStation partnership.
These are both great points. Phil has yet to prove to ANYBODY, much less Microsoft executives, that his gamepass experiment can even work. Theyve given him close to 10 billion in just acquisitions alone and besides lists of studios, he has NOTHING to show for it yet. It doesnt make sense that theyre going to spend another 10-20 billion on a publisher again when Phil has yet to prove that he can even manage what they already have. We'll see i guess.
 

DarkMage619

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The way MS has turned their fanbase into a bunch of beggars is insane to me. Every year now you’re going to have the green army flooding the internet with acquisition wishlists. Y’all embarrassing as fuck.
To say this after the absolute meltdown Sony fans had because a goofy kid with glasses dared to say he liked one PS5 heatsink over another. Talk about embarrassing. The lack of self awareness is stunning.
 

ComputerBlue

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Dec 6, 2013
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I hope not, I’m kind of annoyed at it to be honest. I think exclusives are a good thing, but when they’re developed internally. I don’t like the acquisition of publishers or developers because then it takes away games from other platforms, I don’t like timed exclusive, I don’t like exclusive deals. It’s all shit IMO.
 

smithg5

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Nov 4, 2014
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You guys are no fun.

When Sony was getting home run after home run starting with E3 2013, it was exciting to watch a company that previously had a string of missteps with the PS3 build something incredible.

I feel the same way now with Microsoft. They’re coming off one of the worst blunders in consumer electronics history to build an irresistible stable of studios and IPs delivered buffet-style with a low price subscription. The whole story is great entertainment, especially when Sony is so strong right now. Just enjoy the ride and stop grumbling so much.

Good games will get made no matter what, and competition will just pump more money into that over time.
 
Jun 1, 2021
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I know he has clarified it now.
Steve Saylor's channel is great and I do watch all his content but I think that people really should attempt to understand his area of expertise and where his comsultation business lies rather than just throwing stuff they want to be true at him.
 

Andodalf

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Went to Zaxbys when to my surprise who did I see but Phil Spencer! I thought to say hi, but before I could, he went up to the cute company rep at the counter and appeared to drop something. Before I could see what it was, He loudly announced to the room “Oops, I dropped my monster Checkbook for my magnum Acquisitions” and winked at me.


👀👀👀🤯🤯🤯
 

Hezekiah

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Jul 16, 2020
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I'm saying won't not can’t. I've said multiple times that MS can afford to buy almost anyone they wanted, but M&A is not as simple as that. M&A has to be in service of corporate objectives, meet internal rate of return objectives, etc, etc.

Microsoft's record acquisition is half what EA would cost. They’re not going to smash their record for the Gaming division.

Now, on the other hand, if you were to tell me that they’re going to spend $50 billion on Cloudflare or someone like that then I’d totally buy that.
Which is already supporting a subscription service which is a money sink 😄.

As I said yesterday it's all about ROI.

Also could you imagine if the sports games went exclusive. The backlash would be massive lol.
 

SaucyJack

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Which is already supporting a subscription service which is a money sink 😄.

As I said yesterday it's all about ROI.

Also could you imagine if the sports games went exclusive. The backlash would be massive lol.

On the subject of LinkedIn ……..


 
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Hezekiah

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This reminds me of how people said that Ms would never let Xbox spend a crazy sum of money like 4 Billion! It’s just way more money than they ever spent before, and MS “hated” Xbox! And if it cost more than 4 Billion? Well MS would shut them down sooner than pay!


And we all know what happened next, and those people, are salty a year later.
Yes we know what happened, fanboys celebrated. And then bragged about how MS has way moar money to spend.
 

Hezekiah

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On the subject of LinkedIn ……..

Was LinkedIn a bigger bust than Nokia?

MS wasted $8bn on Nokia, and one of the big things that came out of it is the number of employees (25,000) they took on as part of the acquisition, and the fact they cut over one-third of those jobs.

That's the thing with big takeovers like Zenimax, the associated costs are huge and ongoing. Lots of restructuring and governance issues to consider.
 

reksveks

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On the subject of LinkedIn ……..


I don't think LinkedIn has been integrated particularly well but that first URL seems very click-baity personally and not sure I can take it seriously cause it seems to be using a twitch icon for some reason. It is all very conspiratorial as well about 'vendors paying analyst's' but ehh. LinkedIn learning is the only part that seems possible a good growth area.
 

SaucyJack

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Was LinkedIn a bigger bust than Nokia?

MS wasted $8bn on Nokia, and one of the big things that came out of it is the number of employees (25,000) they took on as part of the acquisition, and the fact they cut over one-third of those jobs.

That's the thing with big takeovers like Zenimax, the associated costs are huge and ongoing. Lots of restructuring and governance issues to consider.

Potentially yes, at the moment it’s just an asset they massively overpaid for.

Nokia is a strange one. It should have been a good purchase but it was so hopelessly managed that one wonders if it was meant to succeed at all.
 
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Jigsaah

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Jan 31, 2018
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Looking back at the initial tweet. "4 companies own everything". Sounds a bit exaggerated if you ask me.

(not in any particular order)
1. Sony
2. Microsoft
3. Tencent
4. Nintendo?

I don't really see Sony and Nintendo as owning everything. Microsoft sure as hell is trying. Sony's growth is more organic. Does Nintendo buy...anything? So that leaves Tencent...and they just lost 190 billion in value due to China Laws.

My money is on Microsoft...maybe Tencent making this huge purchase.
 
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Derktron

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No he didn’t. He was deliberately floating a strawman to poke fun at and potentially start an argument with his opposition. Unfortunately the grown ups are on this thread at the moment and nobody had much more than a nibble on the bait.
Funny how a rumor about Microsoft can cause so much chaos with people, people hate Microsoft but keep Microsoft in their minds and mouth. Funny how that works.
 
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SaucyJack

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I don't think LinkedIn has been integrated particularly well but that first URL seems very click-baity personally and not sure I can take it seriously cause it seems to be using a twitch icon for some reason. It is all very conspiratorial as well about 'vendors paying analyst's' but ehh. LinkedIn learning is the only part that seems possible a good growth area.

I agree, the first one is click baity but does have some good points. The medium one is better.