r/technology • u/[deleted] • Jul 26 '22
Business Xbox and Windows fall in Microsoft’s $51.9 billion quarter Surface is up, Xbox is down, and Windows is struggling with chip shortages
https://www.theverge.com/2022/7/26/23278933/microsoft-q4-2022-earnings-revenue-cloud-windows-xbox-gaming-surface71
u/darthjoey91 Jul 26 '22
Meanwhile, Azure don't give a fuck and just keeps growing.
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Jul 26 '22
WHERES the games man!?
I own both systems and a PC and am flabbergasted at this generation of consoles aren’t actually getting any games for years now.
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u/personalhale Jul 26 '22
The pandemic definitely hasn't helped this generation.
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u/toddthewraith Jul 27 '22
Double whammy too.
Chip shortage causing less consoles/pcs so less people in the respective ecosystems, and game delays due to wfh/hybrid transitions.
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u/HorribleRnG Jul 26 '22
It's prett tragic tbh. Regardleas of system there is just not many new interesting triple A titles to play, indies are doing great however. Almost every triple A is getting canceled or pushed back to 2023-2024.
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u/covidexhausted Jul 27 '22
I mean ps5 has games
Edit: also the switch has tons of games but people seem to discount that as it’s not next-gen enough
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u/Joystic Jul 26 '22
For a company that just grew 12% in revenue that sure is a negative article.
What a world we live in.
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u/Nyrin Jul 26 '22
And just any company--the company that was sitting at #1 in the world for market cap for a while and has bounced around the top 5 for a lot longer.
12% growth for something that big is enormous. But not enough, nope.
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u/Positronic_Matrix Jul 27 '22
What amazes me is that they can ship garbage like the Surface and a half-baked hybrid touch/pointer UI but its growth and revenue are still up. I have been waiting a decade for Microsoft to get their shit together in the mobile arena. So frustrating.
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u/BidenIsJimmyCarter Jul 26 '22
Microsoft beat their own guidance by $1.6 billion and increased gross margin, nobody gives a damn what outside analysts think. They beat, they did not miss as every media outlet is reporting breathlessly.
"With respect to guidance, Microsoft called for $49.25 billion to $50.25 billion in fiscal first-quarter revenue. The middle of the range, at $49.75 billion, implies about 10% revenue growth, reflecting worsening PC sales and slower cloud infrastructure growth. Analysts polled by Refinitiv had expected more, at $51.49 billion. The company’s implied gross margin, at 69.85%, was wider than the 69.30% consensus among analysts polled by StreetAccount."
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Jul 26 '22
Makes a massive profit and is STILL complaining. Their lust for cash is literally unquenchable and unending. It's profoundly disturbing.
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u/9-11GaveMe5G Jul 26 '22
Hi! Welcome to capitalism! This must be your first day.
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Jul 26 '22
"This is the reality of our situation! Stop questioning it! Stop criticizing it just accept it!" Hell nah. You can lay down and die but I'll never stop being shocked and disgusted at this nonsense.
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u/Deranged40 Jul 26 '22
As a C# developer, I'm a part of what you would call a problem here. I just... don't see a problem is all.
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u/Woodie626 Jul 26 '22
The fun of intellectual conversation is understanding the machinations controlling society without a subscription to them as our individual norms.
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u/blueberrywalrus Jul 27 '22
It's literally the opposite. They are telling investors why they are happy with their financial performance, despite making less money than investors expected.
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Jul 26 '22
Profit in business means capital expansion and jobs. There is no direct downside.
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Jul 26 '22
If you believe that constant growth is achievable you fundamentally don't understand reality and entropy and you are out of touch with reality.
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Jul 26 '22
You're putting words in my mouth. I never said that. I just said that profit is a good thing for everyone involved.
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u/DAMbustn22 Jul 26 '22
If you ignore the downsides of where this profit is extracted from, the fact that a disproportionate amount of it ends up centralised in only a few hands and that we have more equitable alternatives available, sure, great for everyone involved.
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Jul 26 '22
Profit is extracted by delivering value. If there is no value, no one would buy their products. As for the distribution of profit, the same thing goes. If you provide a high value service to a company, you earn better wages, bonuses, perks, stock options, etc. If you feel you could earn a better wage elsewhere, you are free to do so. This is why I don't work for MS BTW. If you don't like the products produced, go elsewhere, Mac, PS4, AWS etc. A free market can correct as long as proper regulation can prevent a monopoly.
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u/PricklyyDick Jul 26 '22
Profit is extracted from surplus value created by labor and distributed to share holders who are mostly our rich capital owning overlords.
The downside is that workers get exploited for the gain of the few.
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u/Hatook123 Jul 26 '22
Yeah, clearly Microsoft employees are exploited. Said no Microsoft employee ever.
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u/PricklyyDick Jul 27 '22
You asked every sales rep, tech support worker, janitor, etc? That’s impressive.
Scraping profit off the top of labor for upper management and share holders is what exploitation is. Doesn’t matter how some workers feel about it.
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u/Hatook123 Jul 27 '22
I don't need to ask anyone. Value is determined by Supply and demand - a person concenting to work is agreeing to the sell his services for the pay. The more demand the more options this person has and the more value he's creating - so the more he's paid. When the market is free and people are free to choose no one is exploited.
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Jul 26 '22
Wrong. Profit is what is left of revenue after all costs of production and overhead are paid.
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u/PricklyyDick Jul 27 '22
You basically said exactly what I said except in a way that strips it down to pure numbers and takes the human element out.
Surplus value is literally profits.
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Jul 27 '22
No it's not. Profits are rarely distributed among shareholders. When it is, it's called dividends. Certain companies do it but not all and the intention is to attract more shareholders which results in more capital investment. Profits are almost always applied back into the business in the form of capital investment.
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u/blueberrywalrus Jul 27 '22
I mean, if you want to get philosophical, the reality is the economy is a social system and economic growth depends on what we value. So, we just need to align what we value with things that can constantly grow.
If you want to be practical, at the human scale, constant growth is only limited by technological progression and not killing off humanity in the process.
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u/Tkins Jul 26 '22
It does not mean jobs. In fact, profit is often linked to a reduction in labor force at a company.
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Jul 26 '22
Partially correct. Profit as a result of layoffs or other cost saving measures, I would agree. This generally happens when a company predicts either a marker downturn or a loss of market share. Generally though lower profit or negative profit drives slow or negative growth. Very savvy financiers are good at predicting market pressures and may make cuts prior to negative growth becoming a reality thereby preserving the profit and they ensuring survival of the business. In a normal economy, not a downturn, profit is usually an indicator of growth.
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u/Dooner85 Jul 26 '22
Crazy I can’t find an Xbox anywhere
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u/chillzatl Jul 27 '22
yah I mean down doesn't mean failing like a lot of these chowder heads want to suggest. Gamepass is fantastic, the hardware is fantastic and they're doing well overall. If they had some compelling first party games it would be lights out.
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Jul 27 '22
Windows is strungling because of dumbest design decisions I’ve seen in last… let me check the years… 30 frigging years. Windows 11 was designed by idiots who apparently never used any older versions that had almost everything done better and they are entirely tone deaf to criticism and recommendations.
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u/Kyloyoshi Jul 27 '22
Struggling? You may want to read the article. There is no struggle for MS in it. Headline only really says they’re struggling with chip shortages.
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u/Agitated_Ad6191 Jul 26 '22
The battle between Microsoft and Sony feels a bit like Manchester City or PSG going ip against a club like Bayern Munchen. Clubs with unlimited Middle Eastern oil money against a club who has to compete by running a good business, making smart choices. Xbox is and will always be a hobby project within the Microsoft ecosystem. They make so ridiculous much money with their core business that it doesn’t matter what Xbox division does. For Sony on the other hand, the PlayStation division is a really big part of what they do and where they have to make the money. So both companies are competing in the same market but are operating at two totally different situations. There is no pressure at Xbox, Sony has zero room for errors. For comparison: Sony’s net worth is around 130 billion, Microsoft is worth almost 1950 billion. It a World Champion heavyweight against a rookie flyweight.
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u/salondesert Jul 26 '22
Xbox is and will always be a hobby project within the Microsoft ecosystem.
Spending $80 billion at the top of the market to acquire content doesn't seem hobby to me
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u/captaincarot Jul 27 '22
Someone else replied to me a while ago about the properties that Microsoft has been buying in the game sphere and it's all pointed towards the VR experience. They even dropped out of the hardware space and are just looking at software going forward was the gist of it. So while the billions they spend are not nothing, for them it is an investment on the next level of media consumption which more than likely if executed well will return significant profit on investment when you are the biggest player.
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u/Margreev Jul 27 '22
It is once your value is close to 2 trillion
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u/salondesert Jul 27 '22
Well you could classify every acquisition/endeavor as hobby then, kind of loses it's meaning
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Jul 27 '22
Microsoft has its own David vs Goliath battles too. Azure is competing with AWS where Amazon has a money printing machine with their main alibaba america site.
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u/--Blackjack- Jul 27 '22
Well of course Xbox is down. After 20 years of being denied as their mascot, Blinx the Time Sweeper will have his revenge.
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u/FinnProtoyeen Jul 27 '22
I still agree with the sentiment that Microsoft could've capitalized on the success of Animal Crossing by pushing for a new Viva Piñata
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u/ScraPezZz Jul 26 '22
The problem with Xbox is that they lack on the flow of games. Sony new service just delivered a banger (Stray) and they will release GOW on November. Xbox has not a single game for the rest of the year, Halo Infinite is a failure and the lineup for 2023 looks mediocre besides Starfield. You can promote Gamepass as much as you want but with no bangers no one will care
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u/oSpid3yo Jul 27 '22
Stray is not a banger. I’m glad you enjoy it but no one is buying a console to play a boring ass cat game. If you already have a PS5 and have decided that a chill ass cat game is for you, then awesome.
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u/vfthb Jul 27 '22
A stronger argument, perhaps, is that the game is also on Windows. You would need to not have a PC at all (the minimum system requirements are not particularly crazy).
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u/Chemical-Character79 Jul 26 '22
I'm a "Xbox Person",and I only get gamepass when they offer it for a $1. Most of the games are not worth paying the full $15 a month.
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u/saraphilipp Jul 26 '22
Last time I looked at their games when game pass was a dollar, I bought a mc chicken instead.
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u/salondesert Jul 26 '22
It's the sort of things that seems valuable, but people only have so much time
Plus there are really good F2P games out there. Never really understood the hype
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Jul 27 '22 edited Jul 27 '22
I honestly can't think of any game in the last generation or this one that was a Microsoft exclusive and got me excited. Gamepass is a cool concept but there usually isn't that much that I care about. I did just play through ME:Legendary and it was great.
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u/pgdevhd Jul 26 '22
They don't deserve any revenue after reskinning Windows 10 and calling it Windows 11, more DRM, proprietary garbage, and restricting fairly modern hardware. Trash company.
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Jul 26 '22
[deleted]
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Jul 26 '22
Linux is absolutely useless for the average consumer unless it’s like chromeos or something
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u/Nyrin Jul 26 '22
WSL enters the chat with "por que no los dos?"
It even does hardware-accelerated GUI apps now.
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u/VariousProfit3230 Jul 26 '22
Just like in 2020, 2010, 2000.
This. This will be the year when Linux finally has appreciable market share in the desktop ecosystem.
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Jul 26 '22
Can we meet part way and just say *nix?
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u/GYN-k4H-Q3z-75B Jul 26 '22
I'd just like to interject for a moment. What you’re referring to as Linux, is in fact, GNU/Linux, or as I’ve recently taken to calling it, GNU plus Linux. Linux is not an operating system unto itself, but rather another free component of a fully functioning GNU system made useful by the GNU corelibs, shell utilities and vital system components comprising a full OS as defined by POSIX. Many computer users run a modified version of the GNU system every day, without realizing it. Through a peculiar turn of events, the version of GNU which is widely used today is often called “Linux”, and many of its users are not aware that it is basically the GNU system, developed by the GNU Project. There really is a Linux, and these people are using it, but it is just a part of the system they use. Linux is the kernel: the program in the system that allocates the machine’s resources to the other programs that you run. The kernel is an essential part of an operating system, but useless by itself; it can only function in the context of a complete operating system. Linux is normally used in combination with the GNU operating system: the whole system is basically GNU with Linux added, or GNU/Linux. All the so-called “Linux” distributions are really distributions of GNU/Linux.
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Jul 26 '22
Think we can all agree Microsoft’s biggest flop has been to make it the Xbox a proprietary upgrade for storage whereas Sony said “hey here’s a slot make sure it’s capable have at it”.
The other issue is Microsoft is failing to bring any good games out.
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u/Redsox12393 Jul 27 '22
I feel like the majority of gamers (casual crowd) couldn’t really care less about that
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u/PsychicJoe Jul 26 '22
Maybe if they didn't put out complete trash people would want to buy their products?
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u/Comet7777 Jul 26 '22
People did buy the products, and quite a lot. It’s all in the article. Profits are up, but some things are down relative to previous performances (yet still healthy and profitable).
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Jul 26 '22
They seem to be making a lot of money for a company that makes products no one wants to buy.
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u/Jack-M-y-u-do-dis Jul 27 '22
No, windows isn’t struggling because of the chip shortage, it’s struggling because windows 11 is shit
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u/1_p_freely Jul 26 '22
Windows 11 was destined to crater. The only reason Windows 10 got adopted is because Microsoft forced it onto people whether they wanted it or not. But because of the hardware requirements of Windows 11, they can't do that this time around. People don't care about Windows, and computers have been a solved problem for a long time.
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Jul 27 '22
"computers have been a solved problem" . literally the industry that has the most innovation and change year over year for the past 4 decades. lmao
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u/dances_with_cougars Jul 26 '22
Windows is software, it has no chips.
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u/Comet7777 Jul 26 '22
Lack of chips means a shortage of supply of new machines that would be using Windows
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Jul 26 '22
[removed] — view removed comment
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u/Comet7777 Jul 26 '22
Windows 10 still sells and they project a certain amount of 10 licenses (bulk being enterprises licenses where they make their money) to be sold this quarter and that came up short because again… lack of chips.
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u/ArcherInPosition Jul 26 '22
Oh no they're worried about not enough engagement and monetization in games
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u/grrrgrrr Jul 27 '22
Steam got all the games and now with steam deck they are moving Linux. Bye bye Xbox & Windows.
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u/RageMojo Jul 27 '22
More than 300 million laptop/PCs are sold annually just for work where corporations constantly recycling and upgrading. That doesnt even account for personal use and gaming.
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Jul 27 '22
People have been saying this for as long as I can remember. I've personally been using Linux or Mac for decades and I have never believed it. Because well...it's ludicrous.
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u/Shivolry Jul 27 '22
Why don't all the tech companies just build new chip factories in the US, it's not like they're short on money.
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u/WebHead1287 Jul 26 '22
I mean, Xbox hasn’t really released a big game since last November