So why is Microsoft keeping the Xbox brand around?

This thing just bleeds money. According to many reports the brand has never been profitable from the early days of the original Xbox to now. Xbox 360 despite being their best-selling console costed them billions of dollars and never made it back.

https://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years

Then there were reports in 2015 they were still losing money on hardware on the X1.

http://learnbonds.com/122889/microsoft-corporation-msft-loses-money-on-xbox-one-sales/

I know console makers typically lose money in the first few years and recoup with software licensing but it doesn't seem like Microsoft ever made money let alone profits with the Xbox brand. Why are they keeping it around? It's been over 15 years and this thing still isn't turning into money. I used to love the Xbox and Xbox 360 but am puzzled by the Xbox One. Sony is making a killing and although the Xbox One isn't doing badly in terms of sales it doesn't seem like the future is bright for it.

I ask again, the Xbox division itself tends to ax things that cost them money. Why hasn't Microsoft sold or just discontinued Xbox yet? Not that I want them to but at this point it is simply confusing.

It's a good question, there has the be something in it for them, they would not support a branch that only bleeds money for no reason. MS has been rather swift at letting non profitable stuff go over the companys history, don't see why xbox wouldnt get the axe if it's no benefit to them.

Because MS doesn't want to disappoint there loyal fanbase. The big 3 always loses money on each console sold but however, the true reasons why MS isn't selling off Xbox Brand is the fact that XBL is what keeping them in business.

XBL Gold payment is what's really making them profits, not console sold. Back in the early days of Xbox 360, It was really just an experiment MS ran to see if people would buy into it, and they did so strongly that Sony followed suit hence PS+ since they couldn't get away with PS3 online free. They *could* have given up online gaming long enough to show MS this was not a cost effective route, and MS would have either caved or folded their Xbox division. Bottom-line: XBL Gold is what's keeping them alive and thus, not selling Xbox brand.

So does this answer your question?

Pretty damn simple really; because software and XBLG are the money makers and Pee Cee'ers won't pay for XBLG and just pirate the software. lol :P

No because according to the graph I showed you the Xbox Division is losing money and I'm 99.99% sure Xbox Live is factored in "Xbox Division".

Because the 360 was seen as a success. They thought their brand was bigger than it actually was and now they're seeing the true reality about where they stand in the business with Xbone. It's more eye opening when you realise the undesirable console only really sells well in NA and UK, and even in these markets they aren't ahead.

I'm also surprised lems aren't revolting against the fact Windows store users don't have to pay Live fees while Xbone owners do, but for sure as sh*t it's raking in tonnes of cash by those lem dummies.

A question no one knows the answer to.

They keep it around for the great games, the great consoles, the living room presence, brand awareness, and they make a killing off of software and live services.

They remain profitable, where as early on they struggled. More current than the really old links you posted above

http://venturebeat.com/2016/04/21/xbox-one-is-selling-better-but-lower-price-drags-down-microsofts-revenues/

Finally, it also pointed out that it is getting better profit margins from the Xbox division. The company’s “personal computing” segment, which includes Xbox, saw an increase in operating income of 57 percent from $1.05 million in Q3 2015 to $1.65 million in Q3 2016.

“Gross margin percentage increased year-over-year driven primarily by margin improvements in Surface and gaming,” reads the Microsoft report.

Surface is Microsoft’s Windows-based line of laptops and tablets.

While Xbox boss Phil Spencer and Microsoft chief executive Satya Nadella are likely thrilled about the improved software sales, increased Xbox One unit sales, and better profit margins, all of that would go down a whole lot easier if hardware revenues were just as healthy as we come to the end of the third year of this console generation.

They just don't need an RROD fiasco like last gen to screw them over now that they are profitable.

To sink more Japanese companies

then how did MS become billion dollar company if Pee Cee'ers pirate the softwares ?

Easy peasy lemon squeezy. Non gamers, aka, Bidness software. :P

Hell, the Xbox gamers could have stuck with console and just jumped over to Sony's PS3 online gaming was still free for them, and that massive migration to PlayStation would have been a massive wake-up call for MS. The only thing they'd have lost out on was a small handful of Xbox exclusives, and they could get those as soon as MS ditched the online subscription model. I did remembering reading that MS was gonna try to pull a Gold fee on PC gamers, but they realized that wasn't going to work on PC gamers who had no tolerance for that crap. Reason why Xbox gamers put up with it is because they have no choice, competition on PC rightfully killed GFWL.

Because alphabetically X is at the end of the chart when the suits review what initiatives to cut ties with.

Look at the Band!

Suit: What do we cut this year?

Lower level suit doing CYA: Take a look at our projects sir...

Suit: Azure? No way, that's our Skynet!

Band...what the heck is Band?

Phil: Whew, thank goodness mine starts with X...

Hate to be "that guy" but your own graph shows Xbox has been on the profitable side the last few years, or at least until 2012 before X1 launched. Assuming they can stay even minimally profitable, then they will eventually break even.

Do we have hard numbers for FY earnings of the Xbox division from 13-16 yet? Or is that included in their non-disclosure policy these days?

Yes but those small profits were offset by huge losses and the result was billions of dollars in losses.

That's called an investment. Why do VC's even bother with Uber when they are losing so much money, and not making a profit? They should just stop their funding...

An investment that's been bad for over 15 years and counting.

Not counting... FY08-FY12 is a profit, not sure about FY13-16, but I thought those were also profit years, so not sure what you're getting at...

Looking at the overall pictures. In its 15+ years of existence the Xbox brand has costed them more money than it gave them.

Like I said. You start with an investment, and then you get returns. Microsoft would've already cut their losses if it wasn't performing well enough to their standards (look at Windows Mobile). They are keeping Xbox around because it's performing well. This thread is a complete waste of space, because it doesn't make any sense to shutdown the Xbox division.

Proof?

Because MS see's Sony as a threat to windows and their software business. It's the whole reason MS launched the Xbox. In fact MS went to Sony and tried to get Windows on the ps2, but Sony said no.

Think about it. The Playstation 3 and 4 are multimedia boxes that don't run MS software. I use a Mac at work and my ps4 at home for all my entertainment needs. I am completely out of the MS software ecosystem. (And it's actually kinda nice TBH)

MS is desperately trying to get people back into their ecosystem, but other than the surface tablets it's not really working. Apple and Google dominate Tablets, and more importantly cell phones. Sony is now dominating video game consoles, and even amazon makes a TV stick that doesn't use MS software.

MS has been pushed out of the consumer software market. Which is why I think eventually they will pull an IBM and just focus on the business sector.

really ?

then how did Valve became billion dollar company by selling game software if Pee Cee'ers pirates ?

Really, a whole different story there now which has nothing to do with MS and their earned billions and trust me, Valve is no MS....

Yes, just more failed tactics but keep'em coming. lol :P

Looking at your picture, now they do make a profit. So why would they stop now that they actually make money? They tried to enter a market to make profit and they now reached that goal. If they can keep it there, they'll make more profit in the years to come until, at some point, they made more profit than they invested

So why is Microsoft keeping the Xbox brand around?

To piss off Sony fans. Thats the main reason. I can't think of any other legitimate reason.

@Juub1990: fear not

Xbox what is it good for

Nothing, now say it again

Oh no-there's got to be a better way

Say it again

There's got to be a better way-yeah

What is Xbox good for?

Nothing

Again speculation out the ass in this thread. You fanboys need to stop. If the Xbox brand was sucking it up, Microsoft would shut them down immediately. They have not done that so we have to think Xbox is doing good for them. They have been profitable, and they will get their investment back sooner or later. If the Xbox brand was dragging them down and costing them a shit ton of money Microsoft would cut them as fast as Nokia! I honestly believe Microsoft loves this space they are in and now that it ties directly back into the PC it is only a good thing for them.

Good job Microsft, on having an actual, diverse lineup of exclusives for your system.

Because the console industry is much bigger than just hardware sales...

Today is not opposite day.

Oh ok good. I was concerned for a second. Looks like I was right then.

To mask losses Microsoft has been rolling Android royalties (FAT FS patents) into the division that includes Xbox for a while now.

"If we start with the overall traditional [Entertainment and Devices Division] business that actually loses money before corporate allocations and back out the nearly $2 billion 95 percent gross margin Android phone royalties, we conclude that Xbox platform plus Windows phone and Skype lose about $2.5 billion per year, and we estimate that the Xbox platform may account for roughly $2 billion of this,"

-Source

@jcrame10 said:

@Juub1990: fear not

The funny parts is that Halo and Forza will be out this AGAIN.

Lol

I know right? The xbox one has received zero sales and all games for it have sold zero.

Wouldn't it be awesome for XBL to have a game full of action and dragons with 4 player co-op? They don't want to disappoint their fanbase after all.

Because they have enough money to fund a failing/failed system. Any other company would've pulled the plug

People who pirate the game were never going to buy it in the first place. If you look at Steam sales, PC software actually does really well.

They make money hand-over-fist with their online infrastructure. The Xbox brand is their avenue for making that money. They can't charge PC gamers for online... Look how that worked out.

Yeah, Halo and...and....

ohhhh..

Let me try that

Yeah, Uncharted and...and....

ohhhhh....

Fixed

Honestly the xbox is the only brand gaming could live without. They've done more harm than good ever since they came. The SCAM that is the "pay-to-play online" for starters...

Fixed two too too

@Juub1990: I was actually talking to a guy who worked at MS. He said the main reason they keep it open is its their "cool brand" its the only brand they own that their fans are passionate about. So it keeps the company recognizable to the younger audience.

@jcrame10 said:

@Juub1990: fear not

That is infuriating and hilarious at the same time. Scalebound canceled for Halo Gears Forza.

Yeah, sure fixed that.