Microsoft posts $500 Million loss

[G51989]

Publishers are shooting themselves in the foot and DirectX is becoming less dominant as mobile gaming becomes more lucrative.

Don't expect the repeat performance of the X360.

Yes, mobile gaming is becomming bigger.

But it won't be replacing console gaming any time soon, or PC gaming.

I highly doubt most gamers will trade in theit consoles and towers for a phone, or a tablet.

And developers can charge 20-60 dollars for a pc or console game, mobile delevopers can not.

Microsoft is in a great console position, xbox live numbers are great, I just picked up a 360, gotta say. I love it.

As far as mobile gaming goes. The windows 8 phones have a chance to become popular if microsoft pushs very hard.

The surface pro could also become a popular mobile gaming platform, esp with all that power ( compared to most android and ipads ) under the hood. I could see then remaking surface pro versions of orginal xbox games. How sweet would that be?

 

[Rodimus Prime]

Odd

Though it seems alot is based on that recent acquistion, nothing core to the company

Not really considering it was by far better than what was expected. Also they can look at it as this is a one time deal. Looking to the future there is no major threat of them losing money but instead bring in some big bucks. Hell taking a 6 billion+ write off and losing only 500 mil on during the quarter says a lot about how stable it is.

Also it is 6+ billion paper write off. It that many if and any growth from that part is 100% to the bottom line as profit.

 

[maflynn]

What's troubling for them is their inability to generate profit in non core business sectors. The mobile market, the search engine, etc. True Xbox is doing well, but Bing is bleeding them dry and so far their attempts at the mobile market has not been as well received as they had hoped for.

I know a lot of people are expecting better results for win8, but didn't they say similar things for win7?

I will say if the price is right for their surface tablet that might be enough to change a lot of consumer's perceptions, but it has to be priced near the Nexus and Kindle fire imo. If they shoot for the iPad price, it may not go so well for them

 

[G51989]

What's troubling for them is their inability to generate profit in non core business sectors. The mobile market, the search engine, etc. True Xbox is doing well, but Bing is bleeding them dry and so far their attempts at the mobile market has not been as well received as they had hoped for.

I know a lot of people are expecting better results for win8, but didn't they say similar things for win7?

I will say if the price is right for their surface tablet that might be enough to change a lot of consumer's perceptions, but it has to be priced near the Nexus and Kindle fire imo. If they shoot for the iPad price, it may not go so well for them

You gotta realize, microsoft is not being bled dry by bing, the amount they lose on bing is a drop in the bucket. I think having about 68 billion cash on hand is a good sign your not bleeding to death.

Windows 8 is a huge departure from 7, I think it could do very well.

As far as the surface goes, they will probably price the RT sub ipad levels.

But the pro isn't targetting ipad users, its targetting " power users " and enterprise methinks.

And its the first microsoft product to generate a decent amount of hype snice the 360.

As far as the pro goes, I know a ton of people, even some on this board saying if the surface pro is as good as its being hyped up to be, they are interested. So am I.

 

[maflynn]

You gotta realize, microsoft is not being bled dry by bing, the amount they lose on bing is a drop in the bucket. I think having about 68 billion cash on hand is a good sign your not bleeding to death.

True, I used hyperbole, but the fact remains it is a large drag on its results. They're pouring millions into the product but not seeing any large growth or appreciable return on the money and I think as time goes on, people will continue to gravitate over to google, further marginalizing bing.

Windows 8 is a huge departure from 7, I think it could do very well.

True, but what hurt them a lot is the decision not to support current wp7 phones. Not a consumer friendly choice for a platform to attract consumers.

As far as the surface goes, they will probably price the RT sub ipad levels.

But the pro isn't targetting ipad users, its targetting " power users " and enterprise methinks.

I suspect you're right but if I were to get a surface tablet, it would be the x86 model and I don't want to pay iPad prices for that.

And its the first microsoft product to generate a decent amount of hype snice the 360.

As far as the pro goes, I know a ton of people, even some on this board saying if the surface pro is as good as its being hyped up to be, they are interested. So am I.

I'm not buying into the hype, but I do think it has potential. Price and performance obviously will help dictate its success or failure.

 

[G51989]

True, I used hyperbole, but the fact remains it is a large drag on its results. They're pouring millions into the product but not seeing any large growth or appreciable return on the money and I think as time goes on, people will continue to gravitate over to google, further marginalizing bing.


True, but what hurt them a lot is the decision not to support current wp7 phones. Not a consumer friendly choice for a platform to attract consumers.


I suspect you're right but if I were to get a surface tablet, it would be the x86 model and I don't want to pay iPad prices for that.


I'm not buying into the hype, but I do think it has potential. Price and performance obviously will help dictate its success or failure.

( sorry no qouting, phone + car lol )

Bing, yeah. Agreed.

Windows 7.8 update is supposed to make them more or less supported. I think.

The pro surface tablet being x86 is what I'm after in the surface. Same with business, they'll love full windows systems and software compatibilty out of the box, I'm looking forward to using a usb dvd drive to install ( and make iso files, not taking drive with me ) all my older pc games.

By hype, I mean it looks good. Really good, the pro has the specs of a ultrabook, and its a tablet, and the keybaord looks, and is supposed to feel great.

If microsoft plays its cards right. They'll have a winner imo.

 

[BaldiMac]

That means they made a boat load of money in other areas. It was a good will right down for the company that was not worth the price.

That is, they purchased aQuantive for 6 billion and they had to show the value of the company as a 6 billion on their books even though aQuantive's tangible assets did not equal 6 billion, so its good will. Since MS determined it was not going to generate the level of revenue it expected they wrote down the goodwill to reflect the reality of the situation.

"Good will" write down? Paper loss? What's with the sugar coating the fact that they wasted $6.2 billion on a failed acquisition?

I think Microsoft is in great shape, but losing almost a quarter of your annual profits on an investment isn't one of those times that I say "Oh well, I'll only make that mistake once." Especially when they were days away from spending $50 billion on Yahoo!.

Take away the accounting entry and you'll see MS made a lot of money.

Yep. If you simply "take away" the $6.2 billion loss.

 

[G51989]

"Good will" write down? Paper loss? What's with the sugar coating the fact that they wasted $6.2 billion on a failed acquisition?

I think Microsoft is in great shape, but losing almost a quarter of your annual profits on an investment isn't one of those times that I say "Oh well, I'll only make that mistake once." Especially when they were days away from spending $50 billion on Yahoo!.



Yep. If you simply "take away" the $6.2 billion loss.

I hate these numbers. **** them

6.2 billion isn't a giant amount of cash.for companies like microsoft and apple, if only we were so lucky.

 

[ucfgrad93]

It's not a trading loss though so it wont worry investors. They're still doing fantastically. Like the article says, revenue is actually up 4%.

If I was an investor I'd be happy MS are trimming the fat.

Agreed. Microsoft is a financially sound.

 

[maflynn]

"Good will" write down? Paper loss? What's with the sugar coating the fact that they wasted $6.2 billion on a failed acquisition?

I wasn't sugar coating it, just explaining the accounting behind it. I'm unfamiliar with that company so I have no idea whether it was a poor purchase or MS was unable to leverage the new company to the degree they hoped for.

It is a loss, because they removed an asset from the balance sheet but that does not mean Microsoft is in a financially weak position or is in trouble. Far from it, they basically made so much money that they were nearly able to absorb the entire write down with just a small loss. Lets not lose site of that fact.

 

[rhett7660]

I think it amazing that this is the first loss ever posted! That is a hell of run! Do I think they are going to go down. Not even close.

 

[BaldiMac]

I wasn't sugar coating it, just explaining the accounting behind it. I'm unfamiliar with that company so I have no idea whether it was a poor purchase or MS was unable to leverage the new company to the degree they hoped for.

They bought the company for $6.3 billion. The wrote off $6.2 billion. At least they were able to find $100,000 or so in value from their purchase!

It is a loss, because they removed an asset from the balance sheet

I'd say it's a loss because their $6.3 billion asset lost $6.2 billion in value under their management.

but that does not mean Microsoft is in a financially weak position or is in trouble. Far from it, they basically made so much money that they were nearly able to absorb the entire write down with just a small loss. Lets not lose site of that fact.

Absolutely. I said the same thing in the part of my post you didn't quote.

 

[maflynn]

Absolutely. I said the same thing in the part of my post you didn't quote.

Agreed, I wasn't trying to twist your words, but rather just point to the salient points I was trying to communicate too

 

[smoledman]

Publishers are shooting themselves in the foot and DirectX is becoming less dominant as mobile gaming becomes more lucrative.

Don't expect the repeat performance of the X360.

Yeah yeah, just wait until Microsoft releases the "Next XBox" for Christmas and everyone will want it.

 

[Marx55]

Microsoft, the less, the better. Why use the obnoxious Microsoft products when there are great alternatives out there? The day Microsoft goes out of business, humanity will make a giant leap ahead!

 

[Dr McKay]

Microsoft, the less, the better. Why use the obnoxious Microsoft products when there are great alternatives out there? The day Microsoft goes out of business, humanity will make a giant leap ahead!

Just how are Microsoft products "obnoxious"? And there aren't great alternatives to all Microsoft products. Lots of Microsoft products are very good, Xbox, Windows, Office, WP7, Microsoft mice & keyboards.

 

[A Hebrew]

Microsoft, the less, the better. Why use the obnoxious Microsoft products when there are great alternatives out there? The day Microsoft goes out of business, humanity will make a giant leap ahead!

The day Microsoft 'goes out of business', which will not happen for a very, very long time, will be a very sad day for the whole world of technology.

 

[OllyW]

The day Microsoft 'goes out of business', which will not happen for a very, very long time, will be a very sad day for the whole world of technology.

And it's 90,000 employees.

 

[elppa]

Office has been better than ever.

Run that past me again

 

[smoledman]

And it's 90,000 employees.

I know some people that would get a huge pleasure out of seeing those 90K on the breadlines.

 

[G51989]

Microsoft, the less, the better. Why use the obnoxious Microsoft products when there are great alternatives out there? The day Microsoft goes out of business, humanity will make a giant leap ahead!

Yep, losing support for the operating system most of the world runs on, 90,000 jobs not inculding contractors lost, and 230 billion dollars of wealth and assets gone.

Yeah, that'd be great.

 

[BaldiMac]

Yep, losing support for the operating system most of the world runs on, 90,000 jobs not inculding contractors lost, and 230 billion dollars of wealth and assets gone.

Yeah, that'd be great.

Of course, if Microsoft actually goes out of business somewhere in the distant future, you would have to assume that none of that would be true any more.

 

[G51989]

Of course, if Microsoft actually goes out of business somewhere in the distant future, you would have to assume that none of that would be true any more.

Indeed, though that will only happen whenever a viable replacement for windows comes along, maybe one day well see it.

 

[tootall]

Microsoft still added $6 billion to their cash pile, that's all that matters. Oh and the MSFT stock was up today. Obviously investors know something that [you] don't.

Very convincing argument, and investors also knew better when they were buying Nortel at 127$/share

 

[smoledman]

Indeed, though that will only happen whenever a viable replacement for windows comes along, maybe one day well see it.

Ubuntu, OS X are all reasonable replacements. I'm sure there's an open source replacement for things like Exchange and Active Directory. After all Ad is based on OLAP.

http://www.smallbusinesscomputing.c...Source-Alternatives-to-Microsoft-Exchange.htm

http://www.osalt.com/active-directory

http://www.mysql.com/ --> Alternative to SQL Server

and so on.

2014 = The Year of Linux finally.