Ready for some doom-'n-gloom? According to Yahoo, Microsoft's "nightmare scenario" that could collapse the business is actually starting to happen and it mentions Microsoft's gaming divison (Xbox), too!
Number nine from the list states, "The Xbox was never going to make up the slack, and Microsoft can no longer afford to keep investing in it," to which they gave the following explanation:
In a year of relative gloom, Microsoft's Xbox has become a big bright spot for the company. Kinect is great technology, people are still buying the console, and it's been a great entry point for Microsoft to take over the living room. But, for a company like Microsoft, Xbox isn't enough. Microsoft had $21 billion in operating income last year. The Entertainment and Devices division, which is home to the Xbox had $364 million in operating income. So, as nice as Xbox is, it's not going to be enough to boost Microsoft if the rest of the business collapses.
While I do admit that the Xbox brand's operating income is not that substantial compared to to the company's overall budget, to say that Microsft "can no longer afford" to keep investing in it is quite of a stretch, no? I mean, it is one of the company's divisions that's actually earning money now, so why would you stop investing on it? Heck, just last week alone, Microsoft managed to move over 700,000 Xbox 360 units, which would be a good buffer for some of the struggles Windows 8 and the company's tablet Windows Surface has been experiencing so far.
Do you agree with Yahoo's statement that Microsoft can't afford to keep on investing in the gaming division or will it be the company's saving grace once the world's taken over by Apple and Macs? Let us know in the comments below.
Leave a Reply
You must be logged in to post a comment.