Microsoft recently posted its Q4 earnings report, in which it reported an income of $6.5 billion on revenues of $23.3 billion. Commenting on Microsoft’s latest quarterly earnings report, respected journalist and Microsoft insider Paul Thurrott, had the following to say:
One of the dirty little secrets of Microsoft’s Xbox/gaming business is that it has never actually turned a profit. So I was curious to hear Mr. Nadella utter these contorted words last night: “Our gaming business is now more than $9 billion, and growing profitably.” So. $9 billion is revenues, not profits. So growing means that revenues are growing. And growing profitably means … what? That the business is “becoming profitable”? Or is it just growing revenues positively? Was this a misstatement? What does that mean? Here’s my guess. He means usage and engagement are growing. Because I can state this with certainty: Microsoft’s gaming business is not profitable. In fact, it’s undergoing a digital transformation of its own.
He also predicts that Xbox One X will be a failure on multiple fronts, along with an interesting analysis of other aspects of the tech giant’s business.
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