MSFT CY23Q4 Results are in

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Horatio

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  • #1
    FY24 Q2 - Press Releases - Investor Relations - Microsoft
    Microsoft beats Q2 earnings on AI, cloud strength, shares flat (yahoo.com)

    This was a pretty stellar quarter for MS - driven by a pretty smart deal to become the enterprise provider of AI services by their non-acquisition of OpenAI. Revenue was up 18%, profits up 33% (!). Things were up nearly across the board, with even Windows posting decent gains. The one blemish was devices, down ~10%, and with Panos gone, there doesn't seem to be much direction over there.
     
    LordDaMan

    LordDaMan

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  • #11
    Well to be fair it's what I like to call "funny money". It's not a real value. It's impossible to ever cash all the stock for 3.21 trillon dollars given there's like 7 billon+ (!) shares out there and the very act of cashing the stock out in meaningful amount will cause the stock to drop like crazy reducing the total amount.

    At this size it's more like the stock equivalent of a pissing contest.
     
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    Echohead2

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  • #14
    md5crypto said:
    What value does Microsoft get for this market cap? It's not stopped Xbox from dying.
    Click to expand...
    xbox is dying? How so? Are you sure? BTW...have you paid attention to acquisitions? You don't think the xbox might do a lot better when the next Elder Scrolls is not on PS5/6? or maybe next Call of Duty? Diablo? etc. and maybe not never...maybe just delayed a few months, or just not done quite as well. Or some DLC exclusive to xbox. etc.
     
    Andrewcw

    Andrewcw

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  • #17
    papadage said:
    In the meantime, Xbox Live subs print money.
    Click to expand...
    Not really. Xbox/XBL is still having a hard time. When you're the give away gift for signing up for Verizon Fios. You might have some subscriber issues. Their push for Crossplay between consoles and desktop might of backfired. They got Sony to open up limited crossplay. But they probably lost more to people play on PC to forgo the XBL cost because you can play not being in the walled garden and if you were on Sony/PSN that just was more of a benefit for them because they have even more reason why not to switch over.

    But that said i'm not betting Microsoft's farm on that division. I have way more faith in their cloud services now that Broadcom decided to point a shotgun at VMWare's customers and pulled the trigger.
     
    LordDaMan

    LordDaMan

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  • #19
    So according to Microsoft:

    Our More Personal Computing segment consists of products and services that put customers at the center of the experience with our technology. This segment primarily comprises:

    • Windows, including Windows original equipment manufacturer (“OEM”) licensing and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; and Windows Internet of Things.

    • Devices, including Surface, HoloLens, and PC accessories.

    • Gaming, including Xbox hardware and Xbox content and services, comprising first-party content (such as Activision Blizzard) and third-party content, including games and in-game content; Xbox Game Pass and other subscriptions; Xbox Cloud Gaming; advertising; third-party disc royalties; and other cloud services.

    • Search and news advertising, comprising Bing (including Copilot), Microsoft News, Microsoft Edge, and third-party affiliates.
    Click to expand...

    So according to the finance sheets, Microsoft made $12,604,000,000 in profits for the More Personal Computing section. We know devices (non xbox) was down. So if the Xbox was so bad, then Microsoft made 12 billons on sales of windows and Bing search alone. Ohh and they also increased profits year over year by two billon which means that window licenses and bing search not only compensated for all of the loss in devices but also for Xbox.

    Maybe Xbox isn't a loser like some keep trying to claim?
     
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    Echohead2

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  • #20
    md5crypto said:
    At a certain point the MS board will decide to end the philanthropic gaming enterprise known as Xbox and focus only on AI & Enterprise.
    Click to expand...
    Didn't they just spend like $75B to buy Activision Blizzard? I find it hard to believe that the division is doing so poorly that they are about to shut it down while at the same time buying AB for $75B. "Heck...we're about to shut down a division...why don't we spend $75B on it?"
     
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    Echohead2

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  • #21
    LordDaMan said:
    Maybe Xbox isn't a loser like some keep trying to claim?
    Click to expand...
    And they aren't really reaping the benefits from the AB acquisition yet. I mean sure...the revenue/profit...but not REALLY leveraging it yet. As COD, Elder scrolls, etc. start favoring xbox over PS, they will likely see better hardware sales and better xbox live subscriptions.
     
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    md5crypto

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  • #22
    Echohead2 said:
    Didn't they just spend like $75B to buy Activision Blizzard? I find it hard to believe that the division is doing so poorly that they are about to shut it down while at the same time buying AB for $75B. "Heck...we're about to shut down a division...why don't we spend $75B on it?"
    Click to expand...
    These things can be disconnected. Look at the Nokia acquisition followed immediately by cancellation of Windows Phone.
     
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    wrylachlan

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  • #24
    Xbox the hardware division could be a loser while Xbox the game producer is a winner. And Xbox the cloud gaming provider might be the biggest winner of all. I don’t think the success or failure of Xbox as a division necessarily tells us much about the fate of Xbox as a hardware endeavor.

    Hardware is fucking hard. It’s a loss leader. You have to deal with brick and mortar distribution which is a pain. You have to deal with returns and repairs and warranties etc. etc.

    Comparatively software is easier. Put it out into the world digitally and profit.

    If MS thought that they could be as or more profitable by leaning into game streaming, I think they’d do that in a second.
    ——
    One more thing that’s worth thinking about is what a AAA streaming-first game might look like and whether there’s an opportunity for MS there. There are things you could do computationally on a server that no local hardware is ever going to be able to do. Right now no one is taking advantage of that because you need your game to run on a console to get meaningful sales. But in a world where Xbox drags its customers wholly to streaming there’s likely a differentiator there.
     
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    Echohead2

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  • #26
    wrylachlan said:
    Xbox the hardware division could be a loser while Xbox the game producer is a winner. And Xbox the cloud gaming provider might be the biggest winner of all. I don’t think the success or failure of Xbox as a division necessarily tells us much about the fate of Xbox as a hardware endeavor.

    Hardware is fucking hard. It’s a loss leader. You have to deal with brick and mortar distribution which is a pain. You have to deal with returns and repairs and warranties etc. etc.

    Comparatively software is easier. Put it out into the world digitally and profit.

    If MS thought that they could be as or more profitable by leaning into game streaming, I think they’d do that in a second.
    ——
    One more thing that’s worth thinking about is what a AAA streaming-first game might look like and whether there’s an opportunity for MS there. There are things you could do computationally on a server that no local hardware is ever going to be able to do. Right now no one is taking advantage of that because you need your game to run on a console to get meaningful sales. But in a world where Xbox drags its customers wholly to streaming there’s likely a differentiator there.
    Click to expand...
    There is a real hardware play too...though that is diminishing as compared to the past. If new CODs, Elder Scrolls, Diablos, Starcraft, Fallout, etc. are not on PS...the xbox hardware division could do much better. And if Sony ever drops out of hardware it would be a big boon for xbox. Now...the time for getting Sony out of PS business was almost 20 years ago, and they didn't do it (and maybe they couldn't have due to DOJ et al.), but the opportunity was there.

    However, as you mentioned, the big money is on the software side...both individual titles, along with streaming and game pass.

    Consider...game pass used to have around 50mil subscribers. Each paying about $180/year....that is $9B in revenue.
     
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