Apple files to strike Microsoft testimony over console profit claims

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  • Reply 21 of 26
    crowleycrowley Posts: 8,199member
    Peza said:
    crowley said:
    Peza said:

    It's a fact, profits are not made on console sales. 
    Nintendo's policy is to not make a loss on hardware.

    https://www.nintendolife.com/news/2016/10/nintendo_switch_wont_be_sold_at_a_loss_two_million_units_to_ship_in_time_for_march
    Sony and Microsoft consoles then. Nintendo just recycle old games on new platforms too, they've been making a lot of money from the strategy and the Switch, which is expensive for what it is. But so is an iPhone so.. still sell in the millions.
    Wtf even is this?  Some of Nintendo's new releases for the Switch have been acclaimed as among the best games of the generation, so Nintendo don't "just" do that at all.  And the non-sequitur swipe at the iPhone?  I think a lot of people would disagree with your appraisal of the iPhone as "expensive for what it is" quite strongly.
    watto_cobra
  • Reply 22 of 26
    For reference, here's an article from 2013 regarding the launch of the Xbox One. Technically, the hardware + manufacturing cost for the console itself is already less than the retail price at launch. Other costs related to launching the product are what put it into the red. The hardware costs will continue to drop over the lifetime of the console. Note the quote that states the losses from hardware for both Sony an MS are connected to the initial launch and aren't perpetual. 


    "The IHS teardown found that all the hardware in the Xbox One costs $457, plus an estimate of $14 to manufacture it. That means the console costs only $28 less to make than Microsoft is selling it for, and that’s before taking into account the other costs associated with producing and selling the device."

    and

    "
    “For both Microsoft and Sony, their latest-generation video game console hardware is unprofitable at the time of release, requiring the companies to subsidize it initially,” said Steve Mather, senior principal analyst for IHS. “However, these companies easily can largely compensate for their losses though sales of highly lucrative game titles.”

    https://www.bizjournals.com/seattle/blog/techflash/2013/11/microsoft-selling-xbox-one-at-a-loss.html
  • Reply 23 of 26
    PezaPeza Posts: 192member
    crowley said:
    Peza said:
    crowley said:
    Peza said:

    It's a fact, profits are not made on console sales. 
    Nintendo's policy is to not make a loss on hardware.

    https://www.nintendolife.com/news/2016/10/nintendo_switch_wont_be_sold_at_a_loss_two_million_units_to_ship_in_time_for_march
    Sony and Microsoft consoles then. Nintendo just recycle old games on new platforms too, they've been making a lot of money from the strategy and the Switch, which is expensive for what it is. But so is an iPhone so.. still sell in the millions.
    Wtf even is this?  Some of Nintendo's new releases for the Switch have been acclaimed as among the best games of the generation, so Nintendo don't "just" do that at all.  And the non-sequitur swipe at the iPhone?  I think a lot of people would disagree with your appraisal of the iPhone as "expensive for what it is" quite strongly.
    Im sure on 'this site' people would disagree with the value prospect, I'm sure outside Apple fan sites people would argue it is expensive, sorry if you don't like that.
    and you also seem to have no understanding of Nintendo's history AND your putting words in my mouth, I never once stated it's rare 'new' games are anything but highly acclaimed, or it's old games for that matter.
  • Reply 24 of 26
    PezaPeza Posts: 192member
    crowley said:
    Peza said:

    And as for losing millions, your hatred is strong here, last year Microsoft announced record earnings, the last quarter alone Xbox reported revenue of 3.6 billion dollars, up 50% year over year. So no they are not losing any money. 
    Revenue is not profit.  They also bought Bethesda for $7.5bn last year.

    To my knowledge Microsoft has never disclosed profits for the Xbox division.  Many people would say that not disclosing them is an indication that they're not good.

    Even if they are profitable now, it's likely that they're still net negative for Xbox overall due to the huge hole they got themselves into in the early years, significantly due to the hardware issue with the 360.

    crowley said:
    Peza said:
    crowley said:
    Peza said:

    And as for losing millions, your hatred is strong here, last year Microsoft announced record earnings, the last quarter alone Xbox reported revenue of 3.6 billion dollars, up 50% year over year. So no they are not losing any money. 
    Revenue is not profit.  They also bought Bethesda for $7.5bn last year.

    To my knowledge Microsoft has never disclosed profits for the Xbox division.  Many people would say that not disclosing them is an indication that they're not good.

    Even if they are profitable now, it's likely that they're still net negative for Xbox overall due to the huge hole they got themselves into in the early years, significantly due to the hardware issue with the 360.
    That was a low ball estimate of what it cost them in one year.  The issue persisted over a few years.

    Peza said:

    And they've more then made that money back over the years since. 
    That's exactly what we're discussing and no evidence has been presented for such a claim.

    Peza said:

    Also I think it's safe to assume they are making a profit if revenues are up as much as they are.
    An incredibly problematic assumption.  Revenue and profit are not proportionate.  If costs are also also rising at a similar rate or greater then they could very well be making a loss.

    Peza said:

    But you can't say for sure either way, if they are or aren't making profit, if they don't publish the figures. 
    I agree, and I didn't.  You did.



    First comment: that was an accepted estimate even accepted by Microsoft. And it has little relevance to the argument anyway and is no proof of Microsoft lying as you claim. Even the report you linked to states a quote of a similar amount and hardly the huge increase above a billion you seem to be implying:

    "Microsoft said it would take a $1.05 billion to $1.15 billion charge against earnings for the quarter that ended June 30."

    Second comment: I'm glad we agree.

    Third comment: Your REALLY stretching it if you claim a company making record earnings in the billions isn't making any profit... I would invite you to provide proof to backup your claim here. Especially if you somehow believe a corporation the size of Microsoft is incapable of making up a billion dollar loss over several years. 

    Fourth comment: Glad you agree and yes you did (see top quote from you).

    edited May 12
  • Reply 25 of 26
    crowleycrowley Posts: 8,199member
    Peza said:
    crowley said:
    Peza said:

    And as for losing millions, your hatred is strong here, last year Microsoft announced record earnings, the last quarter alone Xbox reported revenue of 3.6 billion dollars, up 50% year over year. So no they are not losing any money. 
    Revenue is not profit.  They also bought Bethesda for $7.5bn last year.

    To my knowledge Microsoft has never disclosed profits for the Xbox division.  Many people would say that not disclosing them is an indication that they're not good.

    Even if they are profitable now, it's likely that they're still net negative for Xbox overall due to the huge hole they got themselves into in the early years, significantly due to the hardware issue with the 360.

    crowley said:
    Peza said:
    crowley said:
    Peza said:

    And as for losing millions, your hatred is strong here, last year Microsoft announced record earnings, the last quarter alone Xbox reported revenue of 3.6 billion dollars, up 50% year over year. So no they are not losing any money. 
    Revenue is not profit.  They also bought Bethesda for $7.5bn last year.

    To my knowledge Microsoft has never disclosed profits for the Xbox division.  Many people would say that not disclosing them is an indication that they're not good.

    Even if they are profitable now, it's likely that they're still net negative for Xbox overall due to the huge hole they got themselves into in the early years, significantly due to the hardware issue with the 360.
    That was a low ball estimate of what it cost them in one year.  The issue persisted over a few years.

    Peza said:

    And they've more then made that money back over the years since. 
    That's exactly what we're discussing and no evidence has been presented for such a claim.

    Peza said:

    Also I think it's safe to assume they are making a profit if revenues are up as much as they are.
    An incredibly problematic assumption.  Revenue and profit are not proportionate.  If costs are also also rising at a similar rate or greater then they could very well be making a loss.

    Peza said:

    But you can't say for sure either way, if they are or aren't making profit, if they don't publish the figures. 
    I agree, and I didn't.  You did.



    First comment: that was an accepted estimate even accepted by Microsoft. And it has little relevance to the argument anyway and is no proof of Microsoft lying as you claim. Even the report you linked to states a quote of a similar amount and hardly the huge increase above a billion you seem to be implying:

    "Microsoft said it would take a $1.05 billion to $1.15 billion charge against earnings for the quarter that ended June 30."

    Second comment: I'm glad we agree.

    Third comment: Your REALLY stretching it if you claim a company making record earnings in the billions isn't making any profit... I would invite you to provide proof to backup your claim here. Especially if you somehow believe a corporation the size of Microsoft is incapable of making up a billion dollar loss over several years. 

    Fourth comment: Glad you agree and yes you did (see top quote from you).
    I never claimed Microsoft was lying.  You claimed that Microsoft's total cost of the 360 hardware's issues was $1bn, and the link I provided showed that Microsoft took over a billion dollar hit in one quarter alone.  I also didn't say that the 360 was the only reason Microsoft have to make up a lot of losses from Xbox.  They splurged cash on the Xbox 1 too.  They also lost money on the Xbox One, and now they're spending money hand over find on acquisitions and subsidisising GamePass and building out xCloud.

    Why are you categorically claiming that "they've more then made that money back" and then saying you agree with me that there's no evidence for you claim?  Make up your mind.

    I'm not claiming Microsoft are losing money on Xbox, I'm saying that we don't know.  You're the one saying definitve things like "So no they are not losing any money."  I don't need to prove that I don't know something, you need to prove that you do.  Estimates have had Xbox Division with revenue increasing but still taken overall losses, not even that long ago: https://www.forbes.com/sites/insertcoin/2014/08/11/why-its-perfectly-fine-if-microsoft-has-lost-400m-on-xbox-one/?sh=52075fe85666

    Nope, never said definitively one way or the other.  Because I don't know.
  • Reply 26 of 26
    spock1234spock1234 Posts: 98member
    Peza said:
    Your wrong, they do not make any profit on console hardware sales, … 

    ………the last quarter alone Xbox reported revenue of 3.6 billion dollars, up 50% year over year. So no they are not losing any money
    You are contradicting yourself within the same post. You don’t even know the difference between profit and revenue, and yet expect to be taken seriously! 

    Peza said:
    “It's a well known fact that consoles are sold at a loss or cost.” 

    Really?!! How can you ‘know’ this, while also admitting that MS has not released X-box P&L?   

    If you are going to make absurd claims that contradict common sense (which MS itself could not substantiate in court) it is your responsibility to provide the evidence. We are not gonna do the work for you. 
    edited May 20
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