Video game companies are bad | Phoenix Labs sack circa 100 staff

[Photek]

Phil Spencer is doing fine. Xbox gaming revenue was up 50% from last year, this is just shareholder greed.

[jawa_]

Phil Spencer is doing fine. Xbox gaming revenue was up 50% from last year, this is just shareholder greed.

On that face of it that 50% figure sounds like an incredibly good performance, but when you like behind the headlines there are issues worth highlighting, as The Verge shared:

Despite some early successes for Xbox games on rival platforms, Xbox hardware is down by a massive 31 percent this quarter, a big drop following a soft quarter for Xbox sales during the all-important holiday season last year. Microsoft admits the obvious in its earnings filing: that the big drop was “driven by lower volume of consoles sold.”

Overall, gaming revenue is up 51 percent, bolstered by the additional Activision Blizzard revenue, which contributed 55 points of net impact. That means without Activision Blizzard, Microsoft’s overall gaming revenue would have actually declined this quarter. The newly acquired division recorded $1.97 billion in revenue during Q3, but the cost of integration, transaction costs, and other costs of revenue all total $980 million. With other operating expenses ($1.34 billion), it calculates to an overall operating loss of $350 million for Activision Blizzard.

Xbox content and services would have only been up a single percent without Activision Blizzard, so it’s clear that this giant purchase is already having a big impact on Microsoft’s overall gaming revenues. It looks like next quarter is going to be a similar story for gaming at Microsoft, too.

Source: The Verge

[jiggles]

why would the shareholders do this

[Tomous]

I'm amazed Phil Spencer is still in a job, tbh. Well not really...incompetence at executive level is routinely rewarded these days, but if anyone needs to go it's him.

Agreed, when you think about it, he's not really improved MS's position from when he took over. Yes he's overseen GamePass but even subs to that have stalled, he only seems to spend MS's money

Yeah, he's spent a lot of money and isn't really getting results yet. They're obviously giving him time but at some point he's going to need things to improve.

[Moggy]

why would the shareholders do this

So that they can trickle the wealth down later on.

The scamps

[Knoyleo]

why would the shareholders do this

[Robbo-92]

I'm amazed Phil Spencer is still in a job, tbh. Well not really...incompetence at executive level is routinely rewarded these days, but if anyone needs to go it's him.

Agreed, when you think about it, he's not really improved MS's position from when he took over. Yes he's overseen GamePass but even subs to that have stalled, he only seems to spend MS's money

Yeah, he's spent a lot of money and isn't really getting results yet. They're obviously giving him time but at some point he's going to need things to improve.

He's been in the role for just over 10 years now hasn't he? Not like a football manager where they're sometimes given the boot after 6 months in the job, he's done well over the 10 years, but its not like he's massively excelled in any area other than Game Pass.

With the recent cuts, it seems like they've realised just how much money they've spent and now need to try and save some, their biggest established takeover should have been Bethesda, they did not need to spend £70 billion on Activision.

[poshrule_uk]

why would the shareholders do this

Leave the shareholders alone.
Shareholders

[Moggy]

Bring back Don Mattrick!

[Tomous]

Bring back Don Mattrick!

That guy

[Captain Kinopio]

This is strawberry floating a bat gooseberry fool insane move. Tango and Arkane are absolute banger studios. You pay top dollar for them to take games away from th competition and then shut them down. Just a horrible horrible move. It's barely been a couple of years why even have them included in the deal if you're just going to bin those people off.

strawberry float MS and Phil Spencer with his bullshit folksy act

[Tomous]

This is strawberry floating a bat gooseberry fool insane move. Tango and Arkane are absolute banger studios. You pay top dollar for them to take games away from th competition and then shut them down. Just a horrible horrible move. It's barely been a couple of years why even have them included in the deal if you're just going to bin those people off.

strawberry float MS and Phil Spencer with his bullshit homesy act

Agreed. Called "doing an EA" I believe.

[Photek]

You can tell how awful this news is as it's actually made Photek criticise MS.

Not the first time.

Trillion dollar company folks.

Christ.

[Photek]

Phil Spencer is doing fine. Xbox gaming revenue was up 50% from last year, this is just shareholder greed.

On that face of it that 50% figure sounds like an incredibly good performance, but when you like behind the headlines there are issues worth highlighting, as The Verge shared:

Despite some early successes for Xbox games on rival platforms, Xbox hardware is down by a massive 31 percent this quarter, a big drop following a soft quarter for Xbox sales during the all-important holiday season last year. Microsoft admits the obvious in its earnings filing: that the big drop was “driven by lower volume of consoles sold.”

Overall, gaming revenue is up 51 percent, bolstered by the additional Activision Blizzard revenue, which contributed 55 points of net impact. That means without Activision Blizzard, Microsoft’s overall gaming revenue would have actually declined this quarter. The newly acquired division recorded $1.97 billion in revenue during Q3, but the cost of integration, transaction costs, and other costs of revenue all total $980 million. With other operating expenses ($1.34 billion), it calculates to an overall operating loss of $350 million for Activision Blizzard.

Xbox content and services would have only been up a single percent without Activision Blizzard, so it’s clear that this giant purchase is already having a big impact on Microsoft’s overall gaming revenues. It looks like next quarter is going to be a similar story for gaming at Microsoft, too.

Source: The Verge

Pointless article, without Activision Blizzard, King it would be worse… good thing they own them then.

[ITSMILNER]

Factor in as well the fact that Redfall was greenlit and started before MS acquired Bethesda so Arkane Austin hadn’t even had a project greenlit by MS at all yet. Tango are likely similar (Not sure when HIFI would have started dev?) but yeah, not even giving the studios a chance is appalling.

This news will overshadow there Games Showcase next month, I really hope when Spencer does the rounds for interviews he gets grilled on this gooseberry fool.

[Photek]

Factor in as well the fact that Redfall was greenlit and started before MS acquired Bethesda so Arkane Austin hadn’t even had a project greenlit by MS at all yet. Tango are likely similar (Not sure when HIFI would have started dev?) but yeah, not even giving the studios a chance is appalling.

This news will overshadow there Games Showcase next month, I really hope when Spencer does the rounds for interviews he gets grilled on this gooseberry fool.

Showcase is a month away, you’d be surprised how the media moves on, plus he’s going to be getting easy questions from Ryan McCafferty this year, not Jeff Grubb.

[jawa_]

Phil Spencer is doing fine. Xbox gaming revenue was up 50% from last year, this is just shareholder greed.

On that face of it that 50% figure sounds like an incredibly good performance, but when you like behind the headlines there are issues worth highlighting, as The Verge shared:

Despite some early successes for Xbox games on rival platforms, Xbox hardware is down by a massive 31 percent this quarter, a big drop following a soft quarter for Xbox sales during the all-important holiday season last year. Microsoft admits the obvious in its earnings filing: that the big drop was “driven by lower volume of consoles sold.”

Overall, gaming revenue is up 51 percent, bolstered by the additional Activision Blizzard revenue, which contributed 55 points of net impact. That means without Activision Blizzard, Microsoft’s overall gaming revenue would have actually declined this quarter. The newly acquired division recorded $1.97 billion in revenue during Q3, but the cost of integration, transaction costs, and other costs of revenue all total $980 million. With other operating expenses ($1.34 billion), it calculates to an overall operating loss of $350 million for Activision Blizzard.

Xbox content and services would have only been up a single percent without Activision Blizzard, so it’s clear that this giant purchase is already having a big impact on Microsoft’s overall gaming revenues. It looks like next quarter is going to be a similar story for gaming at Microsoft, too.

Source: The Verge

Pointless article, without Activision Blizzard, King it would be worse… good thing they own them then.

Some points to consider are:

> The ABK profits are holding up underlying poor performance in the Xbox division. Yes, ABK is part of Xbox, but how does this major cross-platform gaming sector tie in with improving the fortunes of the core Xbox platform?
> ABK income (not profit) of $1.97bn is huge... but it will be many years before there is real profit on the purchase, recognising the circa $70bn takeover expense.
> Xbox console hardware sales are in a pattern of significant decline.
> Microsoft must be looking for the Xbox platform to be better positioned in the market recognising the expenditure on gaming over past years. MS are a goliath business and they need to identify the reasons as to why they're not performing far more strongly.

[Photek]

Your armchair economics are just wrong Jawa.

Hardware is down, they are going to pivot to handheld and power, no idea if it will work but they really are playing the long game here, and as the second biggest company (i think?) in the world they will get that time, thinking MS will question Xbox performance right now is extremely premature. Also, Believe it or not spending 70bn on Acti-Blizz-King is better than leaving that money depreciate over time.

[Tomous]

What exactly is wrong with Jawa's "armchair economics"?

Looks a very reasonable and balanced analysis of the their current situation to me.

[Photek]

I just don’t think MS right now are questioning Xbox’s performance.

Wouldn’t be shocked if Phil leaves, Sarah Bond is head of Xbox now also.