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Microsoft Q2 2021 Destroys Sales and Profits (Xbox +40%)

jhjfss

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Jeesus! MS as a whole makes more profit in a quarter than Nintendo and Sony do in whole year. Gaming division wise they are third.
i wasnt talking about microsoft, just the xbox division. I keep reading every week how nintendo is crushing it and they still make less money than the xbox division?
Im talking about the 5B in revenue xbox made last quarter, which seems more than nintendo.
 
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jezhumphrey75

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It’s just not cinematic enough.

Flight Sim is also shit, because the planes don’t have any ‘deep’ dialogue. What I really want to know is if my Boeing 767 has a brother called Sam, that hasn’t been mentioned in any of the previous Flight Sim games, that we can care about.
lmao....please close the thread this comment is gold...end it here.
 
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Hezekiah

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Perhaps the silliest comment yet. 🤣

"MS hiding income because it's poorer than expected."

Let me simplify it like this for ya. When it comes to "Microsoft" and "income"... the last word that should be used following that is "poorer".

Sorry, but I don't know how to say it any simpler. When it comes to income, there ain't shit poor about Microsoft.
They hide Xbox profit margin for the same reason they hide console sale figures - because they're a long way behind the opposition.

Somehow this got translated into "Microsoft doesn't care about selling consoles, only services" - even though consoles are the main source of growth in this area, and 'hardcore' mobile gaming is niche.

Why give Xbox revenue figures, but not profit figures if the Xbox division isn't important?
 
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Loope

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Where are you from pal?

In the UK (not Europe) I’ve never known a console to be as popular as the Wii, Game Boy (including variants), DS and now Switch. Everyone and their aunt, nanna and dog had/has one. The 360 and PS4 were both insanely popular also but Nintendo have the broad appeal.

Sony is popular in mainland Europe, but people talk about it on here as if PlayStation outsell Xbox and Nintendo 10 to 1, and that’s simply not the case.
Portugal. I realize my perception might be skewed, but it's all i've seen all the time. I had an X360 and i had to order games from amazon.uk, i would enter a store and there was only PS3 games and one stand for X360 games and Nintendo games.
 
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prinz_valium

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Cool but what did the Xbox division make???
Xbox ist part of the Windows division.
Xbox, or any other service or product is not big enough to be a single division worth reporting. That's not their company structure.

They don't even report LinkedIn Profits or margins. And that's still basically a whole different company.
 

Hezekiah

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Xbox ist part of the Windows division.
Xbox, or any other service or product is not big enough to be a single division worth reporting. That's not their company structure.

They don't even report LinkedIn Profits or margins. And that's still basically a whole different company.
So where are people getting Xbox revenue figures from? Why report revenue and not profit?
 

KingT731

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i wasnt talking about microsoft, just the xbox division. I keep reading every week how nintendo is crushing it and they still make less money than the xbox division?
Im talking about the 5B in revenue xbox made last quarter, which seems more than nintendo.
Possible explanation is 3rd party software sales and services. Nintendo's profit margin is nuts though.
 
Dec 10, 2020
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Maybe I am making a mistake, but from what I know those are numbers for Q2 2021 only and therefore all percentages are compared to them of Q2 2020.
If we look at the quarter (Source: https://www.windowscentral.com/xbox...neration-looms-microsoft-q2-2020-earnings?amp )
Those numbers are not that good and for some areas even bad.
Mostly they just recouped back to the numbers they had Q2 2019 + an additional 6 - 20 % per subfield.

I am surprised that not a single journalist is taking this into consideration when reporting about those numbers. Its easy to have a big growth in % when the base value was so bad compared to the years before.

Well, people don't care😁
 

John Wick

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i wasnt talking about microsoft, just the xbox division. I keep reading every week how nintendo is crushing it and they still make less money than the xbox division?
Im talking about the 5B in revenue xbox made last quarter, which seems more than nintendo.
Nintendo might rake in less revenue but their profit margin will be higher.
 

John Wick

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Xbox ist part of the Windows division.
Xbox, or any other service or product is not big enough to be a single division worth reporting. That's not their company structure.

They don't even report LinkedIn Profits or margins. And that's still basically a whole different company.
Could it be that maybe the Xbox division isn't very profitable? A lot like how Sony wasn't during PS3 and early PS4 days.
Xbox is part of MS so that's not an excuse as they report certain positive figures from it all the time.
Like the $7 billion purchase of Bethesda that puts Xbox division in the red already. I think it's a good way of maybe keeping certain dickhead shareholders from becoming to interested in the divisions profitiblity.
 
Aug 28, 2019
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Could it be that maybe the Xbox division isn't very profitable? A lot like how Sony wasn't during PS3 and early PS4 days.
Xbox is part of MS so that's not an excuse as they report certain positive figures from it all the time.
Like the $7 billion purchase of Bethesda that puts Xbox division in the red already. I think it's a good way of maybe keeping certain dickhead shareholders from becoming to interested in the divisions profitiblity.
That's not how investments work; the $7 billion would be written down at some point, or spread out over years as a cost.

They are in an investment period... their bean counters probably aren't super happy, but the goal is revenue growth during a period like this.

It's an advantage for them up until their board of directors is unhappy; PlayStation is actually at a disadvantage as a division because the companies profits are largely bound to that division. Sony is of course doing incredibly well, and are producing fantastic products.. better than MS (by most arguments).. which is impressive.. but as a division Xbox right now has a blank check with a lot less pressure to "profit" right now because they think they can grow the business and become a leader in game streaming tech.

There's a ticking clock at MS though; they likely have internal goals of lofty GamePass / revenue numbers for 1,3,5 years out... and if they are far off of those goals, the board will start asking them for a change.

Spencer has convinced their CEO they are like an amazon.com right now.. amazon famously lost loads of money for 4 straight years, only to become one of the richest companies in the world fairly quickly after that. Will Xbox mirror that? I fucking doubt it, but that's where they stand right now.
 
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ZywyPL

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i wasnt talking about microsoft, just the xbox division. I keep reading every week how nintendo is crushing it and they still make less money than the xbox division?
Im talking about the 5B in revenue xbox made last quarter, which seems more than nintendo.

You keep reading it because console warriors on the internet keep forgetting (or purposely ignoring) that hardware sales and software sales are two completely different, dare I say opposite factors. Consoles are sold at a loss in most cases, they're just a vessel for software, if there's a profit made it's a very tiny one, software is where all the profit comes from, for example - a huge chunk of Playstation revenue comes from PS+ alone, that's something neither hardware nor software sales can tell us, only Sony's own financial reports, then there's 1st party software sales, then 3rd party software sales, which includes full games, DLC's, season passes, microtransactions, lootboxes and what's not, everything they allow to be published on their console brings them basically free money, lot's of it, that's where all those billions are made. Same deal with MS of course.

Nintendo on the other hand, since they decided to leave the typical home console market and went their own path, have cut themselves out from that huge 3rd party revenue source, so despite their consoles selling a ton, they don't being much money by themselves, and when you look at the software sales, sure, at the first glance their 1st party titles are crushing everyone else, but that's just a few titles a year, whereas if you look at both 1st and 3rd party sales combined, turns out Nintendo is nowhere near in terms of software sales of what's being sold on PS/XB consoles, plus all the previously mentioned online services, DLCs, MTX etc. which as far as I am aware aren't nowhere near as widespread/popular popular on Switch. That's the main, basically sole reason why we never see price drops of Nintendo's hardware and software, that's their only source of income.
 

prinz_valium

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So where are people getting Xbox revenue figures from? Why report revenue and not profit?
Because when you sell Xbox related stuff, it's easy to account for that and report it.
If your sales and marketing team, that is responsible for Windows, Surface, Bing and Gaming is doing some cross promotions it makes no sense to break down the expenses. Just like you don't break down the CEO pay because he is occupied with 80% cloud stuff, and only 2% gaming stuff. That's what company net profit figures are for.
 

M16

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microsoft moved xbox from a product/console to a service.
what this means is that they get a recurring revenue every month.
to grow and sustain their user base, they need to keep growing their portfolio of games
they can now go out and purchase big publishers like bethesda all day long because they have that revenue guarantee in their back pocket.
sony is fucked
 
Oct 2, 2017
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microsoft moved xbox from a product/console to a service.
what this means is that they get a recurring revenue every month.
to grow and sustain their user base, they need to keep growing their portfolio of games
they can now go out and purchase big publishers like bethesda all day long because they have that revenue guarantee in their back pocket.
sony is fucked
Lol, stick to playing games. Running a game business would not be your strong suit.
 

Dabaus

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That's not how investments work; the $7 billion would be written down at some point, or spread out over years as a cost.

They are in an investment period... their bean counters probably aren't super happy, but the goal is revenue growth during a period like this.

It's an advantage for them up until their board of directors is unhappy; PlayStation is actually at a disadvantage as a division because the companies profits are largely bound to that division. Sony is of course doing incredibly well, and are producing fantastic products.. better than MS (by most arguments).. which is impressive.. but as a division Xbox right now has a blank check with a lot less pressure to "profit" right now because they think they can grow the business and become a leader in game streaming tech.

There's a ticking clock at MS though; they likely have internal goals of lofty GamePass / revenue numbers for 1,3,5 years out... and if they are far off of those goals, the board will start asking them for a change.

Spencer has convinced their CEO they are like an amazon.com right now.. amazon famously lost loads of money for 4 straight years, only to become one of the richest companies in the world fairly quickly after that. Will Xbox mirror that? I fucking doubt it, but that's where they stand right now.
There's no such thing as a blank check, especially in business. They literally just tried to DOUBLE the price of xbox gold, which is the only thing that actually makes xbox profit. You dont do that if you have a blank check.
 
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There's no such thing as a blank check, especially in business. They literally just tried to DOUBLE the price of xbox gold, which is the only thing that actually makes xbox profit. You dont do that if you have a blank check.
That's called hyperbole. Not sure why you think "blank check" is meant literally lol.. they clearly are being far more aggressive than their competitors, because they RIGHT NOW have a lot of leeway with their CEO.

And like I said in that post, it's clear some bean counters aren't happy. As I've said in other posts, that's why they are doing price hikes.

But they also quickly reverted; so the bean counters ae losing for now.

I can just hear Phil in meetings begging them to revert the decision with the promise of BILLIONS of customers in the future lol
 
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prinz_valium

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Click that link and see where it takes you

LOL

anyway, source lol?
Click the link and see where it takes you. Open your eyes.

LOL

 
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NullZ3r0

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Sony would never come out bad of the PS3 gen, they have such an immense mindshare all over europe since the PS1 days, that it would be almost impossible to fall flat on their faces. It helped that they chose the right way, games and more games. They're (in my opinion) the juggernaut of gaming. Nintendo has been around for longer but the mindshare in Europe/US is not the same.
If this were true, Sony wouldn't even be in business because Sega and Nintendo would still rule the roost. Mindshare can only get you so far. Don't be so ignorant of history.
 

John Wick

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microsoft moved xbox from a product/console to a service.
what this means is that they get a recurring revenue every month.
to grow and sustain their user base, they need to keep growing their portfolio of games
they can now go out and purchase big publishers like bethesda all day long because they have that revenue guarantee in their back pocket.
sony is fucked
Why is Sony fucked?
They could release a gamepass competitor quite quickly if need be. Also they have more games and back catalogue they could bring to such a service.
 

aries_71

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Congratulations to MS.

I hope Sony and Nintendo do equally well. We need a strong game industry.
 

Dabaus

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So much salt in this thread. They just cant accept it. :messenger_tears_of_joy:
We're accepting it. But some of us are also giving context. 5 billion in revenue during a holiday quarter with the launch of a new 500 dollar console during a pandemic where everyone is inside playing video games isnt as big a deal as youre making it out to be. Nintendo and sony make 5 billion and also make a profit from that during non holiday quarters. We have no idea if xbox even makes money but they just tried to double xbox live gold so probably not.

Edit: I dont think alot of people understand how expensive and risky gaming is. When Sony has quarters where the make 8-9 billion in revenue they only pocket like 1 billion of that in actual profit. 5 billion in revenue could mean MS still loses money on the xbox division, hence a doubling of xbox live gold.
 
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pasterpl

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We're accepting it. But some of us are also giving context. 5 billion in revenue during a holiday quarter with the launch of a new 500 dollar console during a pandemic where everyone is inside playing video games isnt as big a deal as youre making it out to be. Nintendo and sony make 5 billion and also make a profit from that during non holiday quarters. We have no idea if xbox even makes money but they just tried to double xbox live gold so probably not.

Edit: I dont think alot of people understand how expensive and risky gaming is. When Sony has quarters where the make 8-9 billion in revenue they only pocket like 1 billion of that in actual profit. 5 billion in revenue could mean MS still loses money on the xbox division, hence a doubling of xbox live gold.

they have sold out their new consoles in all of the biggest markets (the biggest launch out of all Xbox generations as described by their CEO)
they‘ve had 6 games in steam top sellers of 2020
they have increased gamepass subscribers to 18 million (almost doubling yoy)

all this without big AAA games that we know will start to be released as of this year (halo, new forza, new forza horizon, new gears, avowed, fable, hellblade 2, perfect dark, starfield, tes6, new wolfenstein, Indiana Jones, new dishonored, and probably many more that are not yet announced)

yeah, they are in horrible position, all this and they still got access to ms money if needed
 

Vasto

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We're accepting it. But some of us are also giving context. 5 billion in revenue during a holiday quarter with the launch of a new 500 dollar console during a pandemic where everyone is inside playing video games isnt as big a deal as youre making it out to be. Nintendo and sony make 5 billion and also make a profit from that during non holiday quarters. We have no idea if xbox even makes money but they just tried to double xbox live gold so probably not.

Edit: I dont think alot of people understand how expensive and risky gaming is. When Sony has quarters where the make 8-9 billion in revenue they only pocket like 1 billion of that in actual profit. 5 billion in revenue could mean MS still loses money on the xbox division, hence a doubling of xbox live gold.

Reaction Disappointed GIF by MOODMAN
 

iHaunter

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Expected. Xbox One sales were pathetic. It's a 40% jump because their previous numbers weren't competitive with Nintendo and Sony. Service revenue is not shocking considering GamePass is leaving its' infancy.

That being said, competition is always good. Delaying Halo was the right call. I'm curious to see how their ownership of Bethesda will turn out.
 
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prinz_valium

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We're accepting it. But some of us are also giving context. 5 billion in revenue during a holiday quarter with the launch of a new 500 dollar console during a pandemic where everyone is inside playing video games isnt as big a deal as youre making it out to be. Nintendo and sony make 5 billion and also make a profit from that during non holiday quarters. We have no idea if xbox even makes money but they just tried to double xbox live gold so probably not.

Edit: I dont think alot of people understand how expensive and risky gaming is. When Sony has quarters where the make 8-9 billion in revenue they only pocket like 1 billion of that in actual profit. 5 billion in revenue could mean MS still loses money on the xbox division, hence a doubling of xbox live gold.
What do you think where their $5.2bn divison profits are coming from?

From $2bn Surface revenue?
From $2bn Bing revenue?
From $5bn Xbox revenue?
From $6bn Windows revenue?

How much did each subsegment contribute to the total share? How are the margins of those product and service categories?

$1bn from Surface? Well they have a higer profit margin than Apple, nice.
Bing? The last service turning profitable and ad spend was cut down fist in 2020 because of the pandemic.
$5bn from Windows alone? Nice they have a 85% profit margin. Why even bother with Cloud or Office, that only have a 45 to 50% profit margin.

Guess what. It's coming from all of them and Xbox is contributing a sizable portion of that.
But I guess MS is making profits out of thin air.
 
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Dec 10, 2020
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What do you think where their $5.2bn divison profits are coming from?

From $2bn Surface revenue?
From $2bn Bing revenue?
From $5bn Xbox revenue?
From $6bn Windows revenue?

How much did each subsegment contribute to the total share? How are the margins of those product and service categories?

$1bn from Surface? Well they have a higer profit margin than Apple, nice.
Bing? The last service turning profitable and ad spend was cut down fist in 2020 because of the pandemic.
$5bn from Windows alone? Nice they have a 85% profit margin. Why even bother with Cloud or Office, that only have a 45 to 50% profit margin.

Guess what. It's coming from all of them and Xbox is contributing a sizable portion of that.
But I guess MS is making profits out of thin air.

Someone in this very thread on previous page said to you that these profit numbers aren't provided by Microsoft, isn't it?

EDIT : don't show again that screenshot crap because operating income isn't the same as net income. This crappy screenshot of yours shows difference more than $2.3bn in income for the whole company.
 
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prinz_valium

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Someone in this very thread on previous page said to you that these profit numbers aren't provided by Microsoft, isn't it?

EDIT : don't show again that screenshot crap because operating income isn't the same as net income.
Operating income is operating profits.
Net income doesn't exist for division. That's a company accounting thing. Or does xbox make money with the 120bn cash holdings from Microsoft? Should that be account for and attributed to Xbox?

Are only business illiterate people on this site?
Guess what Sony is reporting for GNS?
Operating Income.

Guess what Nintendo is reporting, too.
Operating Income and Net Income



Jesus. The quality of this site really went down after the reset era exodus in this regard.
 
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Operating income is operating profits.
Net income doesn't exist for division. That's a company accounting thing. Or does xbox make money with the 120bn cash holdings from Microsoft? Should that be account for and attributed to Xbox?

Are only business illiterate people on this site?
Guess what Sony is reporting for GNS?
Operating Income.

Guess what Nintendo is reporting, too.
Operating Income and Net Income



Jesus. The quality of this site really went down after the reset era exodus in this regard.

Operating income ISN'T THE SAME as Net Income for the company. As the number for the whole company provides that. You can clearly google what is the difference between the two.
 
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Dabaus

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What do you think where their $5.2bn divison profits are coming from?

From $2bn Surface revenue?
From $2bn Bing revenue?
From $5bn Xbox revenue?
From $6bn Windows revenue?

How much did each subsegment contribute to the total share? How are the margins of those product and service categories?

$1bn from Surface? Well they have a higer profit margin than Apple, nice.
Bing? The last service turning profitable and ad spend was cut down fist in 2020 because of the pandemic.
$5bn from Windows alone? Nice they have a 85% profit margin. Why even bother with Cloud or Office, that only have a 45 to 50% profit margin.

Guess what. It's coming from all of them and Xbox is contributing a sizable portion of that.
But I guess MS is making profits out of thin air.
Please understand, revenue isnt profit. Like I said, PlayStation will have 8-10 billion dollars in revenue but only about 1 billion of that goes to actual profit. Gaming is extremely expensive with low margins. That’s why so few companies get involved or are afraid to.
 
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ZehDon

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Why is Sony fucked?
They could release a gamepass competitor quite quickly if need be. Also they have more games and back catalogue they could bring to such a service.
I don't think Sony are fucked, but they're unquestionably behind. According to Jim Ryan, Sony's games are too special to add to streaming services, leaving their PS Now service as the place to play games years and years after people stopped caring about them. They could dump every game they have onto that service, and it would still take several years to build the service's brand like Microsoft have done with Gamepass. Quote me on this: they're going to be playing catch up towards the tail end of the generation when they have to cave into PlayStation fans demanding a Gamepass equivalent. By that point, assuming that if just a handful of Microsoft's exclusives land as GOTY contenders, Gamepass itself will be pushing 30-40 million subscribers.
 

Eanox

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i wasnt talking about microsoft, just the xbox division. I keep reading every week how nintendo is crushing it and they still make less money than the xbox division?
Im talking about the 5B in revenue xbox made last quarter, which seems more than nintendo.
Net Sales | ¥578,701M | ¥1,022,668M (~$9.39B)| ¥1,250,000M |
This is the results same fiscal last year for Nintendo.

Sony Revenue : ¥2463.2bn / $22.64B (+2.6% YoY from
Same time last year.
Gaming Revenue : ¥632.1bn / $5.81B (-20% YoY from ¥790.6bn / $7.00B - Q3 FY2018

Also, I think you are confusing the reports. Q2 for MS is October to December while Q3 for both Sony and Nintendo is Oct- Dec.

I edited my post.
 
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prinz_valium

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Please understand, revenue isnt profit. Like I said, PlayStation will have 8-10 billion dollars in revenue but only about 1 billion of that goes to actual profit. Gaming is extremely expensive with low margins. That’s why so few companies get involved or are afraid to.
Sony's GNS profit margin is around 20%
Nintendos operating profit margin is around 30%

Microsoft is somewhere above Sony and below Nintendo.
That's more than $1bn on $8bn revenue.
Even tho the margin is obviously going down during the release of a new console generation.


Non platform holder gaming companies have even higher margins.
Activison is above 30%, too
And EA is close to 30%

 
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