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Microsoft Stock
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Nov 26, 2005, 10:56 PM
 
What's the deal with MSFT?

I noticed that Visa was reporting large spending increases in consumer electronics this year (notably they mentioned iPods and XBox.)

I purchased another $3500 of AAPL, even at this price of $69 I think it's a good bet. I then took a look at MSFT. What's up with that? All this hype over the XBOX 360 and the stock is still stuck. Odd, no? Or have people lost THAT much faith with the company.
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Nov 26, 2005, 11:06 PM
 
they're losing money on each xbox according to slashdot.
     
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Nov 26, 2005, 11:09 PM
 
M$ has a huge market cap, so it takes a lot of momentum to get the stock moving. M$ is an income stock rather than a growth stock. If you want growth look at AAPL or GOOG. Beyond that, M$ just plain sucks: The 360 is crappy and Vista is vaporware. Did I mention they suck?

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Nov 26, 2005, 11:23 PM
 
I blame Bill Gates.®
     
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Nov 26, 2005, 11:29 PM
 
heh heh ... suckiness aside they should have *some* momentum. I guess I'm just trying to understand the dynamics better.

calimehar, yes they lose money on the console, but for each console sold there is a bigger market for the games which they make a ton of money on. Kind of like giving away the razor to sell the blades. (Or in the case of the cell phone industry, subsidizing the phone in order to make money on the service contract.)
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Nov 27, 2005, 12:33 AM
 
Originally Posted by calimehtar
they're losing money on each xbox according to slashdot.
OMG stop the presses!

That's only how every single game console since at least 1990 has been. Sell the hardware at a loss, make money on the games. It's the "razor and blades" business model.

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Nov 27, 2005, 12:57 AM
 
Originally Posted by tooki
OMG stop the presses!

That's only how every single game console since at least 1990 has been. Sell the hardware at a loss, make money on the games. It's the "razor and blades" business model.

tooki
It probably wouldn't have been as bad if Microsoft hadn't already lost 4 billion on the XBox.
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Nov 27, 2005, 02:08 AM
 
Eh, I think Nintendo manages to make money on each console sale. But Sony and MS certainly don't.
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Nov 27, 2005, 08:29 AM
 
Originally Posted by goMac
It probably wouldn't have been as bad if Microsoft hadn't already lost 4 billion on the XBox.
You can't make any judgement on that without looking at their business plan for the device. $4B is a lot of money, but if they expect it to return, say, $20B net profit over the course of a few years, then it was a good investment.

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