This Is Wrong! Xbox Does Not Need To "Make Back $70B To Be Profitable

[@Trevo86]

Apparently, buying a Playstation makes you an expert in company finances.

[@Doomguy666.-ob3vc]

😂😂

[@tahan9323]

These personalties are unhinged and should be treated as such.

[@zerosam5541]

All ways have been

[@tahan9323]

@@zerosam5541 Not within the greater gaming zeitgeist. Why do you think rumors being passed off as facts become center stage? It's pathetic alongside that mutant fanbase.

[@b3at2]

ABK and Bethesda was paid for with free cash on hand. Thats money after all bills are paid. Companies do not needs to reearn free cash on hand purchases… this is business cass 101

[@Snow-c6e]

Sony fanboys need to keep it a 100. If the shoe was on the other foot and Sony brought ABK and Bethesda We wouldn't be here about how Sony needs to make back this much money. But these are the same guys who was talking about. The bungee was a better acquisition than both of ABK and Bethesda

[@XlPackratlX]

So, there is a fallacy to why people think they need to make back $70 billion. It's called money illusion. They paid for a good with $70 billion but they only see the $ not the good. Neat economic concept to throw out there.

[@KyleSetFire]

The way I explain it is... Microsoft had a cash asset of $70bn. They traded that cash asset for new physical assets....namely ABK, the studios, the IP, the technology etc. Microsoft's value didn't decrease $70bn after they "spent it" because the value of the assets still exists within the company.

[@tahan9323]

@@KyleSetFire Not necessary to explain it it that way.​ These transactions aren't novel. Msft paid cash money that was already alloted for acquisitions. This doesn't affect profitability negatively. ABK money made is net positive and recouping development costs are baked in to the process.

[@KyleSetFire]

@@tahan9323 That's exactly how Phil Spencer explained it 🤷🏻

[@tahan9323]

@@KyleSetFire And how does that change what I just wrote? Phil was trying to articulate that they don't see buying an asset a drain on profitability. What I just explained is the actual reality of the transaction that took place. Phil is alright. However, he entertains asinine talking points way too much, and in the process, unintentionally muddies the water. He tried to dumb down the discussion for the cerebrally slothful.

[@b3at2]

You can google it. Companies who made purchases with free cash on hand do not need to earn back free cash on hand purchases. ABK was bought with free cash on hand… Microsoft is so big that they basically got ABK for free.

[@aryferreira2375]

Look like, buying a Playstation makes you an expert in company finances and Business

[@TheBean87]

Seems like that’s the mindset haha

[@b3at2]

This is spam… one of many comments like it. Reported

[@tyrionlannister3046]

What happened to Microsoft's share price once the deal went through? Pro tip ,it didn't go down. The increased share price offset massively the ABK purchase price.

[@tahan9323]

That's not how it works. Msft paid cash set aside for the very purpose it was used. Paying back, or being in the arrears applies when financing purchases, i.e., debt. Msft has no debt because they paid cash money. The metric Msft uses in it's quarterly reporting is an internal measurements tracking the efficiency of the deal. These dudes spreading this bs are special, and not in a good way.

[@TkoddaLee]

ABK is a asset to Microsoft they didn’t buy it to hurry up and make money….the only one losing is Sony cause they actually had exclusive deal for COD and Sony market share did drop after Sony couldn’t stop the Microsoft buying ABK

[@tahan9323]

@@tyrionlannister3046 That's not how it works. No debt was incurred acquiring ABK. Also, stop reporting innocuous comments designed to clarify the subject. No need for share price to offset transaction. It was paid for by cash! The share price not being negatively impacted demonstrates market sentiment toward the merger, which was positive.

[@SheepAmongG.O.A.T]

I keep trying to tell people the same thing. ABK is an asset.

[@heideknight7782]

I have also heard that if someone wants to buy Ubisoft they would have to pay much more than the current market value (around $2 billion), because the company comes along with all the big IPs (Assassin's Creed, Rainbow Six Siege,...). And Microsoft's acquisition of Activision/Blizzard includes some of the biggest IPs in the live service spectrum (CoD, WoW, Overwatch, Diablo). I think this alone explains the big volume of the acquisition and why they don't need to somehow recoup this investment anytime, as you say.

[@mynameismud-qd9vu]

The biggest hurdle Microsoft faced with acquiring Activision/Blizzard was paying the employees that came with it. That's typically why there are so many layoffs after an acquisition. I think some people forgot that they had bought them outright and weren't paying off a debt. That they are now building equity from them.

[@metv1221]

Just showed up to see what's being cooked, smells good 👍🏽 Love how my guy put all his ingredients use in the video. Thanks VGFS 😊

[@FarmerJimLR]

Watch out for the COD tax. Xbox has a tax, now people are placing that tax on COD. They're going after the 2019 patents Activision filed for their backend skill-based match making system. They have no idea what AI is going to be brining to gaming. It won't just be Activision.

[@Mmachine88]

Corporations like Microsoft dont expect to get a full return on said purchase .. they make so much money yearly that they invest rather than having billions laying around, doing nothing. Folks love to seperate the revenues and claim ABK is Microsoft Gaming, rather than Xbox. Well...MS annual revenue is hudreds of billions of dollars, and profit more than the cost of ABK in a single year. ll The revenue in total from Microsoft, not Xbox, is hudreds of billions dollar bills in a given year.

[@b3at2]

ABK was purchased with free cash on hand… organizations do not need to make back the free cash on hand spent on reinvestment. Free cash on hand is left over money after all bills are paid… salaries ,taxes, and paying stock holders. Free cash on hand is call free because its money to burn free and clear. Business school 101

[@Carl-gj4ed]

Activision had $6.3B in net cash when they were acquired. Activision's value has increased from $69B to $75B. Since the acquisition, Xbox's gaming revenue has jumped 49%, Xbox content and services revenue, including Game Pass, increased by 61% and the acquisition has bolstered Microsoft's Game Pass portfolio, potentially increasing the value of Activision's content within the Microsoft ecosystem. All in all, this sounds like a good deal to me, and the shareholder market is positive and strong. As long as Microsoft's studios are making high quality games, the value will just get higher and higher. I can easily foresee Activision alone being valued close to $90B within 5 years, especially if the next Xbox console delivers.

[@k.ms.perkins8644]

VG you need to respect XBOX and PlayStation community As well

[@b3at2]

The xbox strategy is clear… buy as many publishers as possible, release all first party games on all platforms but charge the competition’s customers full price… the reason to still buy an xbox is because you get those same games for virtually nothing (19.99 a month). VS 70 dollars plus tax for everyone else. So when people say “there is no need to get an xbox”. They are admitting to wanted to pay for each game full price… and that is their choice… but im a smart consumer… im sticking with xbox to get the best deal in gaming -gamepass.

[@glennhkboy]

Those people really have no idea how modern IT giant operate! MS is one of the biggest business entity in the world! It reach this position by selling subscription to all of their softwares.

[@RAFisTECH]

This is true…. I bought a property to get it rented out… in cash…. This is part of my passive income

[@BombzOnZombz]

Fr though, all them studios have to do it create content for Gamepass. And that's it.

[@EmperorDxD]

It was bought with on hand cash meaning they actually needed to get rid of that money one way

[@b3at2]

It was cash leftover and free to do anything with and one does not need to reearn it..

[@snookiejackson7602]

@EmperorDxD thank you EmperorDxD if Microsoft don't spend that cash on hand they paid taxes on it as of now Microsoft have 78 billions dollars on hand Sony have 15 billions dollars on hand see different Sony fanboys a Mega Corporation from a Mom and pop Corporation .

[@EmperorDxD]

@@b3at2 no it's on hand cash on hand in teh business world is cash that you do nothing with if you don't use it it either becomes less or becomes a tax problem so people uses it then it becomes a tax right off and more

[@narkaah]

People forget that xbox made about about 14 billion dollars 💵 cash. That was how much cash activision has on hand.

[@PantherCrane]

Candy Crush alone made a chunk of that money back!

[@snookiejackson7602]

Sony Fanboys ABK is worth 94 Billion dollars as of 2024 Microsoft investment already pay off go back to school and learn investment 101

[@daviddesrosiers1946]

The zero sum game is strong with these folks who think like this.

[@Perry2186]

did they forget Warcraft exists?

[@dagreatberich1070]

6 videos released within 24 hours? Are you okay lol

[@PantherCrane]

Ponies must be schooled!

[@zerosam5541]

Vg plz play a good game like terraria or devil may cry

[@rajah316]

Microsoft will get their money back that they paid for Activision, Blizzard, KING Activision Blizzard alone Made 5.89 Billion dollars in 2022 between Game purchases, Microtransactions, Merchandise etc..

[@aryferreira2375]

They dont need to get anything back becaues they got the ABK with their onw money... mean they just need is a assesct that increase the Xbox and MCSF value as company

[@rajah316]

@aryferreira2375 yea I know that but still all that money being made will go back into making more games. MS made that purchase to maximize profits

[@TkoddaLee]

@@rajah316these Ponies are the minority on PlayStation and the data even show it the most play game on Ps5 is COD😂😂😂Sony losing their exclusive deal on Activison games will cost Sony 2B in revenue Sony is scrambling trying to make a game like COD for the PlayStation brand

[@nootsgaming5517]

Didn’t they make great profits at the last review they did? Profit as in investors where happy

[@deadringer8050]

actually Xbox hasn't been profitable sense the red ring of death

[@VGFightSchool]

www.essentiallysports.com/esports-news-as-per-reports-playstation-scores-the-lowest-in-profitability-as-compared-to-xbox-and-nintendo-but-rules-in-revenue/

[@Mark-mu4pj]

Xbox is worth around $600B, that's 5X more than Sony as an entire company, of course Xbox makes money, even Gamepass makes 4-500M per month, they spent 1.1B on GP each year and gain $5B from it.

[@KyleSetFire]

Womp womp. What universe do y'all live in?

[@TheBean87]

Wrong again

[@TkoddaLee]

Xbox is Microsoft 3rd most profitable department😂😂😂u still don’t know tat selling more consoles doesn’t mean ur making a profit Sony and Xbox is selling their consoles at a loss to bring u into their ecosystem to have u buy their software and subscription to cover the loss of the console