Comment by devx | Hacker News Reader

Comment by devx | Hacker News Reader

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Maybe, but here's the thing. Splitting them like that might help the already rich ones (Windows and Office), while it would hurt the struggling ones (Xbox, Bing, Surface).

I actually don't know how Xbox is doing financially on its own these days, but I doubt it's extremely profitable and has a lot of cash on its own. The consoles usually make the money back over certain period of time from games. Could Xbox survive on its own in that scenario?

As for Bing - it's still losing billions of dollars a year last I checked. So are the Surface tablets, and Skype - well Microsoft paid over $8 billion for Skype, and they're not going to get that money back anytime soon. Hotmail, despite many registered accounts, was pretty dead, and I think only some transitioned to Outlook.com.

It seems to me like high end gaming consoles are unsustainable anyway. Sony could barely keep Playstation alive if it wasn't sinking money into the product that it had gained from other sales. Microsoft is in the same boat.

Apple and Google's "gaming" division is just co-opted from their existing hardware and don't take significant resources to run. Nintendo is the only company able to keep itself afloat just from console hardware and software, and we see the market it competes in. It seems no one is willing to go toe-to-toe with Nintendo on their home turf.

"As for Bing - it's still losing billions of dollars a year last I checked."

Allowing the successful divisions to survive and the leeches to die seems like a win for MS. Why is throwing away billions on products that produce no return a good thing?

There's the concept of a loss leader: you lose money on one product because it gains the company money when the consumer buys another product. Remember that the Xbox lost billions year over year for 8 years until it was profitable.

Microsoft has repeatedly shown us that they're playing the long game. If they're predicted to make money even a decade from now, they'll keep posting losses until that point comes (Xbox). If they're predicting a failure, they'll very unceremoniously pull the product (Kin/Zune). To steal a line from Breaking Bad, they're not in the software business. They're in the empire business.

Sometimes a product is kept around because it has worth beyond making money.

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