MSFT CY24Q1 Results are in

https://www.microsoft.com/en-us/investor/earnings/fy-2024-q1 <-- Removing the tracking elements from your link, this takes you right to the earnings.

They're still pushing CoPilot hard. No indication if there was even a nudge to the bottom line this quarter from their new AI initiative. Unfortunately the rent-seeking markets are too lucrative for them to ignore even if it screws over every user and every business who needs on-prem, or to buy once and not be stuck with subscriptions based on their financial needs.

All my clients are RUNNING to the cloud. They are addressing demand. Companies don't want to be in the datacenter business just to support operations.

papadage said:

All my clients are RUNNING to the cloud. They are addressing demand. Companies don't want to be in the datacenter business just to support operations.

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I think the question becomes “what next”? Will there be a substantial slow down in growth once these businesses have moved all their in-house servers to the cloud? Or will MS be better poised to sell value-added services once their customers are all on azure?

md5crypto said:

At their current rate of making EBITA, Microsoft will make back the $69 billion that goes to ABK within 10-12 months. The real question is how long IF ever ABK generates $69 billion in revenue or another lifetime IN THE RED venture for Microsoft. Like XBox, Danger, Kin, etc...

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I suspect this is far too simple of a take. At a baseline, ABK is profitable. A super quick Google shows ~$2.4B of revenue in Q2 2023 at a 26% operating margin. But sure, ~$500M in profit a quarter would take a long time to pay back a $70B purchase price. But there's also how they can leverage ABK's past, present, and future catalog to enhance game pass and the whole of PC/XBox gaming.

As a Game Pass subscriber, it makes me far more willing to keep subscribing if I know there's now this entire huge library of games, some portion of which will inevitably come to Game Pass. That makes me want to keep using my Series X (or to buy what comes after the Series X, much as I bought the Series X as an upgrade to my XBOne without hesitation), or eventually get around to building a gaming PC and buying games for that platform too.

All this as a hardcore Apple user with a house full of Macs, iPads, and iPhones. Devices that, I will add, I never game on, nor would I ever spend a dollar on gaming any of them, as my full-throated rejection of Apple's legendarily pathetic and condescending attitude toward gaming. So through gaming alone, Microsoft has brought me into and made me a money-spending customer of their various ecosystems, when otherwise there would be no reason for me to have even a Microsoft account. I have zero exposure to anything else MIcrosoft-related in my day-to-day business and technology usage.

md5crypto said:

Microsoft seems to always hit home runs in the enterprise, but fails consistently on anything consumer related.

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They haven't released numbers or anything, but I would bet Minecraft has paid out in spades (or pickaxes).

md5crypto said:

Good point. I bet lifetime Minecraft is billions in the black. So in a sense, Minecraft funds the money-losers in XBox hardware & studios. XGS better hit it out of the park with Hellblade 2.

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You know, pretty much every console to ever exist was a money loser. That's the nature of the beast. sell the console for cheap but make $$$ on the games.

LordDaMan said:

You know, pretty much every console to ever exist was a money loser. That's the nature of the beast. sell the console for cheap but make $$$ on the games.

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The consoles are money losers, not necessarily all the hardware. Official Xbox controllers are $55+ each. I would be shocked if microsoft isn't making a profit off of that.

And even then the degree of losses is vastly overstated. The only consoles sold at large, sustained losses were the Saturn, the Dreamcast, the original Xbox, the 360, and the PS3. We all know how Sega’s story ended, the original Xbox was axed and replaced early, and the 360 was designed to get much close to break even before the RRoD intervened. Nintendo has only rarely sold systems at a loss at all (although they have done it), and most PlayStations only lose a small amount of money early in their lifespans.

poochyena said:

The consoles are money losers, not necessarily all the hardware. Official Xbox controllers are $55+ each. I would be shocked if microsoft isn't making a profit off of that.

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I agree. The Xbox Elite Wireless Controller Series 2 is currently about $164. The controller itself I would imagine costs less then $20 to make

Chris FOM said:

And even then the degree of losses is vastly overstated. The only consoles sold at large, sustained losses were the Saturn, the Dreamcast, the original Xbox, the 360, and the PS3. We all know how Sega’s story ended, the original Xbox was axed and replaced early, and the 360 was designed to get much close to break even before the RRoD intervened. Nintendo has only rarely sold systems at a loss at all (although they have done it), and most PlayStations only lose a small amount of money early in their lifespans.

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Yep. Its probably more accurate to say consoles are generally sold at around breakeven.

Chris FOM said:

And even then the degree of losses is vastly overstated. The only consoles sold at large, sustained losses were the Saturn, the Dreamcast, the original Xbox, the 360, and the PS3. We all know how Sega’s story ended, the original Xbox was axed and replaced early, and the 360 was designed to get much close to break even before the RRoD intervened. Nintendo has only rarely sold systems at a loss at all (although they have done it), and most PlayStations only lose a small amount of money early in their lifespans.

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I would imagine the 360 was at worst breakeven towards the end. They kept the price constant while reducing costs. Yeah, the RROD was a huge hit. The PS3 lost so much money.

Luna still exists, and is a pretty good product (complete with the usual "included free with Prime" tier—smart), just not particularly well promoted. Probably the sort of thing that will just limp along indefinitely.

Stadia was a genuinely great product, it just suffered the usual death-by-Google. One can only imagine the dominant position Google would be in now in so many additional sectors if they only had the discipline to stick with things during the difficult post-launch market / iterate / expand phase.

md5crypto said:

The bigger picture is Microsoft really only cares about PC gaming and Game Pass. Console is an afterthought. They know they'll never advance beyond 3rd place, but they are content that Google/Amazon have no foothold in that market. Stadia/Luna, whatever happened there?

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When you do something fir 22 years it's not an afterthought.

Also for this generation they are not advancing past third. Doesn't mean for all time they are third

The original Xbox came in second, outselling the GameCube at roughly 24 million vs 21 million worldwide, but in a generation where both got absolutely obliterated by Sony. As in the PS2 sold over three times the Xbox and GameCube COMBINED. The next gen was more complicated. The 360 largely tied with the PS3 (by the end of the generation I believe the PS3 had eeked ahead, but only barely with both finishing somewhere around 90 million) while both were well behind the Wii (which sold far better than people give it credit for now, both hardware and software). There were other localized brighter spots: the 360 outright won the UK and eventually outsold the Wii in the US as well, although well after the launch of the Wii U and XB1 when neither the Wii nor the 360 were particularly relevant. Unfortunately that was also a generation where MS executed near-flawlessly [insert RRoD-shaped disclaimer here] while Sony repeatedly found new and creative ways to self sabotage and the end result was still only an effective tie for second place. The XB1 got outsold by the PS4 at least 2:1, possibly more, and despite launching four years later the Switch still passed it in less than three. The Series systems have done reasonably well given the very limited data available but despite the XBSS being the cheapest current console by $100 the XBSX/XBSS combined sales are probably under half the PS5’s while the Switch continues to sell quite well for a 6 1/2 year old system, never mind one that’s never had a price cut and is running on a 2015 mobile SoC. The console market isn’t zero-sum and Sony and Nintendo don’t need to “lose” in order for MS to “win,” but in hindsight it also appears clear that the 360 represented the absolute ceiling for the Xbox but the more likely outcome going forward is well lower.

md5crypto said:

The bigger picture is Microsoft really only cares about PC gaming and Game Pass. Console is an afterthought. They know they'll never advance beyond 3rd place, but they are content that Google/Amazon have no foothold in that market. Stadia/Luna, whatever happened there?

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I don't know...with the purchase of Blizzard/activision they could. COD and elder scrolls are big movers and drivers. They care about consoles. But they don't care to "win"...they care about profits. They had the chance to kill playstation and didn't (probably would have gotten into trouble though with regulators, so maybe they couldn't have).

And they don't even have to make COD, Elder Scrolls, etc. exclusive to see huge benefits. Delayed release, fewer DLC, less work at optimizing, whatever. Though they will probably leverage it more to push Game Pass than hardware sales (which will also drive hardware sales, but secondary goal). Game Pass exclusive DLC, Early release on Game Pass, the options are so many.