@GARYVEE

Dear Twitter,

I have always loved you and I always will. As I sit here writing this, I can’t help but think how excited I am about our future.

Everyone is saying #RIPTwitter, but I still believe in you. And I’ll tell you why, starting with where you started and why you succeeded.

The launch of Twitter: The Internet’s cocktail party.

Launched in July of 2006, Twitter was a platform that experienced consistent and steady growth for many years. What made Twitter unique was the infrastructure and psychology that coincided with the rise of mobile text messaging. It hit the coveted one million user milestone and within two years a billion tweets had been sent on the platform. In 2009, when the platform was just under three years old, Nielsen put out a report stating that Twitter had grown 1,382 percent year-over-year.

What Twitter looked like soon after launch in 2006.

A tweet was very similar to text messaging. In fact, Twitter was one of the first mobile social media platforms. Users could set up their phone to tweet from it; send an SMS txt and the tweet would appear on your profile. Don’t forget that Twitter was launched a year before the first iPhone was released. The fact that Twitter built a product around the mobile phone culture right out of the gate is significant: it created a new social pipeline.

Despite confusion surrounding what Twitter was (the staff made a pretty bizarre video explaining its purpose), it obviously had a massive appeal to internet users.

Essentially, Twitter was a room in which you could openly jump into people’s conversations. I always called it the cocktail party of the internet. If you brought value to the conversations, you would be accepted and welcomed, instead of treated like a creep stalking around the internet. Very few places at the time on the internet acted like that (in fact, very few places still do).

You could probably make the argument that Twitter was one of the most significant things to happen to my career.  While running my family wine business, I used Twitter’s search for market research and to find new customers. I could search “Santa Margherita Pinot Grigio”  and find out what everyone on the platform thought about it, what they were saying, and who was looking to buy. Later, as I achieved a sort of cult fame status with my first YouTube show, WineLibraryTV, Twitter helped me grow my personal brand. It allowed me to respond to people one by one, on a personal level.

Lobster roll, pinot grigio and the ocean. Ahhhhhh (@ Evelyn's Drive-In) http://4sq.com/9Orsv0

— Montana Triplett (@montanatriplett) September 4, 2010

A new social pipeline, the quick blogging style, the similarity to texting: all these things were great for Twitter.

But there was more, much more, that attributed to its success early on.

Three reasons why Businesses use Twitter.

When Twitter first launched, there were three major aspects to its functionality and culture that pointed to it becoming a great success in the world of social.

The first is something that we have always seen for every successful platform: disproportionate attention and consumption by the end users. The amount of eyeballs, you could get on one tweet compared to the trouble of sending one tweet? Insane. The ROI was solid.

Secondly, the platform itself had incredible word of mouth capabilities. If you know about business, you know that word of mouth can be one of the most effective ways to grow awareness at scale and at cost. Twitter’s retweet button was an incredible invention of a new social psychology. The idea of a “retweet” as an endorsement and as a way to “share” someone else’s content within your feed and with your followers, was relatively new (outside of blogging). Now, it’s a common thread seen across all social: share this, reblog that. But Twitter was the one that made it mainstream.

Lastly, because it was a public domain of people sharing thoughts, ideas, and opinions, it created an enormous database of consumer insights. If you were willing to sift through it, it was a goldmine to find people you or your brand were looking to connect with. Like I said above, I owe a lot of my success to Twitter. Twitter search helped me build my business and personal brand. It was enormously fruitful and helpful. And best of all, it was all free.

All these things set Twitter up for enormous user growth. The platform was criticized for feeding into an era where people mindlessly share thoughts. But, it became so much more very quickly.

When the Mars Phoenix found water on Mars in June 2008, it announced it on Twitter. It proved its effectiveness at connecting to real time cultural moments when Oreo tweeted during the Super Bowl. And maybe most significantly, it showed that it could be a place to go for real time updates on major news; tragic events like the Boston Marathon bombing and world news like Arab Spring had their first breaking moments on Twitter.

Needless to say, I had faith. I bought Twitter stock and I was excited from what I was seeing. It had strong platform usage. It was a destination for breaking news. It popularized effective platform functions.

With all these things poised in Twitter’s favor…what happened? Why is Twitter’s user acquisition at a standstill, and why is its ad products failing?

The realization that Twitter might suck.

Sometime in 2011, I started to notice that the content I was putting out on Twitter was not getting the attention that it used to. I went on Next Wave and talked about my concerns, about how I thought Twitter was starting to have a noise problem. Everything was down: reach, conversion, engagement.

First, I looked at myself. Was I doing something wrong? I audited my content. Then I looked at other accounts to see if there was a similar trend. I realized I was seeing the first cracks in the armor. The attention was slipping. As someone who is obsessed with day trading attention, I was very concerned. Tweets just weren’t maintaining the same engagement as they used to.
Additionally, simply not enough people were using the platform. In those first two to three years of Twitter, television, the number one attention platform at the time, was falling over itself to promote Twitter. Every newscaster on every show had their Twitter handle, the bird symbol was at the end of ads. TV promoted it far more than it promoted Facebook. And yet, the user numbers just did not reflect that. It didn’t catch on, at least not at scale.

Users on the platform started to tune out. The culture of following a lot of users had backfired and now there was too much noise on the platform and there are not enough ways to filter through it. In the same way that e-mail marketing was ruined because of sheer volume (and because marketers ruin everything), Twitter had too much—it was too loud. The value of tweeting was decreasing.

As the value for users decreased, it naturally decreased the ROI for advertisers and their clients too.The CPM on Twitter was very high and still remains one of the highest today. Too much noise meant that that disproportionate value that had made it so valuable was disappearing.

My agency,VaynerMedia, used it heavily as a community management tool in 2009 and 2010. Nearly every brand we managed was on it. As the platform evolved, I wanted us (and still want) to still be using it like that. I thought we would have to be stupid to not take advantage of all the free data, conversations, and content being created about our brands. It was, and still is, an incredible customer service tool. But the marketplace wasn’t convinced; they didn’t see the value. The noise volume was just too high. And, unfortunately, 99 percent of brands are only interested in pushing out content; they don’t want to use it as a listening tool.

It was a cocktail party, but nobody was really listening, just talking.

I sold half of my Twitter shares in June 26th 2014, for $41 a share. I stayed on the platform. I remained active. But I couldn’t justify the investment any more. I was concerned about where the business was going. In fact, I probably kept half my shares more out of loyalty than anything else.

So, where does Twitter go from here?

@GARYVEE

The future of Twitter.

Twitter needs leadership to evolve the product, and that is exactly what they are doing.

The two major things Twitter needs to solve for are the algorithm of the dashboard (what content shows up in your feed and why) and length of tweets. Recently, Twitter has questioned these functionalities and that’s a great sign for Twitter. Without a doubt, these changes should have come sooner. But it isn’t trying to grasp at what used to make it great; it is looking to change it drastically. When a platform can be unromantic about itself, it sets it up for a much better shot at success. Similar to when Snapchat got rid of the “hold to view” function, or how Facebook routinely shifts and evolves its newsfeed algorithm, if Twitter can move on from what used to define it and create a new space, it could have a bright future.

A great example of this is when it switched from “favoriting” a tweet with a star to “hearting” it with a heart. It felt like a small shift, but it was huge in that it was indicative of Twitter accepting that they fundamentally needed to change confusing parts of their interface.

Twitter has also done a good job in continuing to try and double down on owning real-time moments and a live experience. It introduced native video opportunities in 2014, and views and usage grew very quickly. It bought Periscope in 2015—a live streaming platform with an appealing and easy user interface. And, most recently, it introduced “Moments.” Moments is its real time news related product: it brings together all the most talked about topics of the day in one tab.

A company is only truly failing when it refuses to accept change or adapt to current situations.

Because the thing is, I think Twitter is a fantastic platform. Yes, I sold my shares. That might make you question my opinion right now. But I look at Twitter the same way you might have looked at CBS a few years ago. When you’re the fourth place network, things aren’t going great. But if you can make the right moves, the right choices, at the right time, you can become the number one network. It’s no different for platforms.

I have faith in Twitter as a platform. It’s a powerful tool for social utility and a great social network.

The exclusive cocktail party that it once was is now a water cooler of the masses.

The things that I talked about in the first part of this article still apply and are still relevant. The word of mouth. The public forum. The search features. The conversations. All these still make Twitter a very strong platform.

I believe that Twitter has enough scale and enough brand equity to succeed. It brings value to those who know how to use it well. If Jack Dorsey makes the right two to five decisions, the company could start the momentum as a product in the right direction.

It just needs one big hit.

@GARYVEE

This article originally appeared at GaryVaynerchuk.com Gary Vaynerchuk has built businesses all his life: In his 20’s, he grew his family liquor store from $3 million to $45 million in 5 years, launching WineLibrary.com, one of America’s first wine e-commerce sites. In 2009, he co-founded VaynerMedia, a social-first digital agency which helps brands market in the year we live in.

An angel investor and adviser to some of the most successful tech startups since social media’s early days, Gary has counseled and invested in more than 50 tech startups including Twitter, Tumblr, Medium, BirchBox, Uber and Venmo. In 2014, Gary launched $25 million seed fund VaynerRSE to continue his successful investing career.

The post Flying With A Wounded Wing: Why Twitter Still Has More Than A Chance appeared first on Wall Street Insanity.

screenshot via YouTube/Carnegie Wave

Futuristic pods anchored to the ocean floor are generating electricity at a naval base in Western Australia. Using the power of ocean waves, these pods — also known as CETO 5 generators — float just below the water’s surface and are delivering both electricity and high-pressure water back to land, providing electrical power and filtered water without generating any emissions.

The commercial-scale pods, built by Carnegie Wave Energy Limited, are part of the multi-decade research project known as the Perth Project, which is focused on developing viable wave energy infrastructure, according to Engadget. Situated at Australia’s biggest naval base, HMAS Stirling, the CETO 5 generators each produce 240 kW of electricity.

Each generator is composed of a floating actuator tethered to the seafloor. Their position underwater preserves views and keeps them protected from excessive wear and tear, says Engadget. Electrical power and high-pressure water are delivered to land directly from each unit; the pressurized water is then used to drive the filtration process at a nearby reverse osmosis plant, creating fresh water.

The three CETO 5 generators are intended as a demonstrator model for a larger version of the underwater wave farm. Carnegie says that if reliability testing goes well, it will construct the next-generation CETO 6 generator, which should have a capacity of 1 MW. The company hopes to create a larger trio of CETO 6 pumps in 2016.

Image via Carnegie Wave

Using the natural motion of waves to generate electricity without creating any greenhouse gases would be a major step forward in clean energy, as well as a reminder to a world that is quickly running out of fresh water that it might be time to start thinking outside the box.

The post Australia’s Underwater Wave Farms Provide Power And Water appeared first on Wall Street Insanity.

screenshot via YouTube/NVIDIA

Tesla CEO Elon Musk has a vision of the future, and that vision is of self-driving cars… and only self-driving cars. Speaking at the 2015 GPU Technology Conference recently, Musk stated that self-driving cars will soon become so common that driver-controlled cars will be considered unsafe and will probably be outlawed.

We’ll take autonomous cars for granted in quite a short time,” he told NVidia co-founder and CEO Jen-Hsun Huang at the conference. “In the distant future, [legislators] may outlaw driven cars because they’re too dangerous.”

However, Musk made it clear that this future will be very distant indeed. He noted that switching over to fully autonomous vehicles could take as long as 20 years, according to the Verge, explaining that the automotive industrial base is enormous and that car and truck production capacity is currently limited to about 100 million new vehicles a year.

In addition to the sheer numbers involved in replacing regular cars with self-driving ones, Musk predicted that regulators won’t allow self-driving cars until they’ve seen several years of “compelling” evidence about their safety in comparison to driver-controlled cars.

Eventually, though, Musk believes that this slow transition will change the way people think about self-driving cars.

It would be like an elevator. They used to have elevator operators, and then we developed some simple circuitry to have elevators just automatically come to the floor that you’re at … the car is going to be just like that,” said Musk.

And when that happens, it may very well be time to outlaw cars driven by people, as the computer-controlled ones will be safer.

You can’t have a person driving a 2-ton death machine,” said Musk.

Those worried that the government is coming to take away their cars can take comfort in the fact that this likely won’t be happening until a number of technological roadblocks are overcome. Among these is the fact that it’s apparently really hard to get vehicles to drive themselves at speeds of between 15 and 50 miles an hour due to unexpected things like potholes, road closures, bicyclists, open manholes and more.

Tesla also wants to be sure that no one can hack into its vehicles. Currently, Musk told Huang, this isn’t an issue, since as long as the steering wheel and brake pedals exist, drivers can override any potential problems manually.

Continuing with the elevator comparison, Musk said that autonomous cars could soon become everyday items. “I think it’s going to become normal, like an elevator,” he said. “There used to be elevator operators and then we came up with circuitry so the elevator knew to come to your floor. Cars will be like that.”

This doesn’t mean that Musk wants to start the robot apocalypse and stop people from driving, however. After the conference, he tweeted, “To be clear, Tesla is strongly in favor of people being allowed to drive their cars and always will be. Hopefully, that is obvious.”

To be clear, Tesla is strongly in favor of people being allowed to drive their cars and always will be. Hopefully, that is obvious.

— Elon Musk (@elonmusk) March 17, 2015

However, when self-driving cars become safer than human-driven cars, the public may outlaw the latter. Hopefully not.

— Elon Musk (@elonmusk) March 17, 2015

The post Elon Musk Thinks Cars You Can Drive Might Be Outlawed Someday appeared first on Wall Street Insanity.

Image via Storma Medical

Good news for people who hate their eyes and love laser surgery: Soon you might be able to turn your brown eyes blue with a new laser procedure.

The procedure comes from California-based Stroma Medical Corporation, and according to Time, takes about 20 seconds to remove some of the melanin in the eyes, resulting in a pigment change. Although the procedure isn’t yet available in the U.S. (and might not be for another three years, according to Time), Stroma claims that it has conducted 37 successful trials on patients in Mexico and Costa Rica and says the procedure is perfectly safe.

The fundamental principle is that under every brown eye is a blue eye,” Company chairman Gregg Homer told CNN, explaining that there actually isn’t any blue pigment in any color eyes. “If you take that pigment away, then the light can enter the stroma — the little fibers that look like bicycle spokes in a light eye — and when the light scatters it only reflects back the shortest wavelengths and that’s the blue end of the spectrum.”

Stroma Medical’s treatment involves disrupting the layer of pigment in the eye, which makes the body remove that tissue naturally, says CNN. People who undergo the procedure will see blue eyes emerge gradually over a period of weeks.

The laser treatment hasn’t yet completed any clinical trials in the U.S., but Homer estimates that if Americans begin undergoing the procedure in the next few years, it would cost each person about $5,000.

In addition to questions about the supposed safety of the procedure (an ophthalmologist at the London Eye Hospital told CNN that releasing pigment inside the eye could increase pressure in the eye, putting patients at risk for glaucoma), this new treatment raises questions regarding ethnicity and cultural sensitivity. Is the company promoting the idea that blue eyes are better than brown?

Stroma claims it isn’t. “It’s not a goal of our company to promote blue eyes,” Homer told CNN. “All your problems don’t go away because you’ve changed your eye color but I do believe that people like to express themselves a certain way and it’s nice when they have the freedom to do that.”

However, the company’s site certainly phrases their philosophy a little creepily, stating, “We all have blue eyes. In the case of brown eyes, however, a thin layer of brown pigment covers the front surface of the iris (the colored part of the eye). The Stroma laser disrupts this layer of pigment, causing the body to initiate a natural and gradual tissue-removal process. Once the tissue is removed, the patient’s natural blue eye is revealed.” Many people might take this to mean that everyone has “natural” blue eyes — and that, therefore, any other color of eye is somehow an imperfect version of the true blue eye.

Regardless of how creepy you think the Stroma procedure sounds, it remains to be seen if it will be approved for use in the U.S., so brown-eyed people don’t have the option to make themselves blue-eyed… yet.

The post Change Your Eye Color For The Low Price Of $5,000 appeared first on Wall Street Insanity.

Image via AVG

AVG Innovation Labs has come up with a set of concept invisibility glasses for the digitally paranoid age. Recently revealed at Pepcom in Barcelona, the invisibility glasses are intended to help protect your visual identity by making it difficult for cameras and different types of facial recognition technology to clearly see your face and determine your identity.

Image via AVG

The glasses help protect your face from being recognized in two ways. The first uses infrared light; according to AVG, the use of infrared light to break facial detection software was first introduced by Isao Echizen of Tokyo’s National Institute of Informatics. Using this method, infrared lights are placed around the eye and nose areas of the glasses frames. The lights are invisible to the human eye (since they’re infrared), but visible to cameras sensitive to their wavelengths. When the lights are on, they confuse cameras by lighting up the center of your face and supposedly avoiding Facebook’s facial recognition technology.

Image via AVG

However, AVG points out that this approach won’t always work, as some cellphone cameras have an infrared filter that can eliminate any wavelengths outside the visible spectrum.

The second approach uses retro-reflective materials to reflect light back at the camera at the instant a photograph is taken. According to AVG, most surfaces reflect light by diffusing or scattering it in all directions, but retro-reflective materials reflect light back directly at its source. In other words, if a picture is taken using flash photography, retro-reflective glasses will reflect the light right back into the camera. This darkens the subject and distorts the image by placing what appear to be glowing glasses frames over their face.

The drawback to this method is that flash photography has to be used in order for it to work, making it not entirely useful for avoiding facial recognition in bright places.

Drawbacks aside, AVG’s concept glasses draw attention to the increasingly bothersome issue of privacy when facial recognition technology is everywhere. As PSFK points out, it’s becoming easier and easier for companies like Facebook to quickly identify your face with eerie accuracy, allowing anyone to identify you in a public place, track your location or your habits and pin pictures of you without your permission — so perhaps AVG’s invisibility glasses aren’t quite as paranoid of an idea as they might appear.

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Image via Kickstarter/PancakeBot

Who among us didn’t aspire to dazzling heights of pancake artistry when they were a kid? And who among us didn’t usually end up with nothing but crooked smiley faces and lumpy butterflies? A new Kickstarter is endeavoring to surpass those failed pancake dreams of youth with the PancakeBot, the world’s first 3D pancake printer that uses batter instead of ink to create the wildest designs you can imagine.

The PancakeBot has everything except the batter; it includes a commercial-quality nonstick griddle, an SD card slot for custom designs, Mac- and Windows-compatible software and even pre-loaded pancake designs. For those bold souls who’d rather create their own designs, the software allows you to trace any image — such as a logo, a cartoon character, a random drawing or the Eiffel tower — and store it on the included SD card. The PancakeBot will then draw whatever image you’ve traced and deposit the batter directly onto the griddle.

PancakeBot prototype in action. Via Kickstarter/PancakeBot

Using a “smart batter dispensing system” that involves a combination of compressed air and a vacuum, the robot printer squirts the batter in a controlled fashion; onboard controls allow pancake chefs to “fine tune” the dispensing of the batter, according to the Kickstarter page.

Creator and civil engineer Miguel Valenzuela was inspired to make a pancake machine for his two young daughters after reading about someone who made a pancake stamping machine out of LEGOs, according to the project’s Kickstarter page. After first making a LEGO version himself, Valenzuela began working on a more advanced acrylic version that debuted in 2014. This year, he partnered with StoreBound in an attempt to get the PancakeBot into homes by mid-2015.

Although the project only went up on Kickstarter this month, it’s already surpassed its $50,000 funding goal by almost $15,000. According to its timeline, tooling and production are estimated to begin in May/June, and shipping could begin in July, although the final design, mechanics and software interface still need to be tweaked. With any luck, though, every aspiring pancake artist will soon be a master!

The post Breakfast Gets Better: PancakeBot Lets You Print Your Own Pancakes appeared first on Wall Street Insanity.

screenshot via YouTube/Mobile World Live

While speaking at the Mobile World Congress in Barcelona this week, Facebook CEO Mark Zuckerberg revealed his one main rule for hiring employees.

I will only hire someone to work directly for me if I would work for that person,” Zuckerberg said, according to the Telegraph. “It’s a pretty good test and I think this rule has served me well.”

During a Q&A session at the MWC, Zuckerberg told the audience that Facebook isn’t a company for everyone, so he looks for new hires whose values align with the company’s. He also said that Facebook’s relatively small (in comparison with other tech companies like Google) staff is a “crucial” part of its success, according to the Telegraph.

The most important thing is to keep your team as small as possible,” he said. “[Facebook] serves more than a billion people around the world but our team has fewer than 10,000 people. It’s only possible because of modern technology. Big companies get bloated.”

In addition to sharing his views on hiring, he also had some advice for entrepreneurs, saying that the most important thing for them is to have faith in themselves and trust themselves.

“When you’re young you hear that you don’t have experience to do things, that there are people that have more experience than you. I started Facebook when I was 19,” he said. “Don’t discount yourself, no matter what you’re doing. Everyone has a unique perspective that they can bring to the world.”

Watch a replay of Mark Zuckerberg’s keynote appearance at Mobile World Congress 2015 below:

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Ikea

Swedish retail behemoth Ikea has unveiled a new line of furniture that contains every minimalist design/phone addict’s dream: wireless charging spots.

The new line, called Home Smart, was introduced at the 2015 Mobile World Congress recently. According to the BBC, it will initially include lamps, bedside tables, desks and a coffee table, as well as individual charging pads that can be placed on any surface.

The wireless charging spots are built directly into the furniture, allowing people to simply put their smartphone or other mobile device down on the plus sign in order to begin the charging cycle.

Our belief is that mobile phones are vital parts to people’s lives at home and their desire to stay connected,” Bjorn Block, manager of lighting and wireless charging at Ikea said in a statement.

However, according to ABC News, you’ll still have to put the furniture together yourself — and it currently doesn’t work with iPhones. Ikea is working with the Wireless Power Consortium on the wireless charging spots, which means it’s using the wireless charging standard QI. According to the WPC, more than 200 companies are currently using QI as their wireless charging standard, but Apple is not one of them.

For those non-iPhone users who can’t wait to start assembling tables and charging their phones without wires and power cords getting in the way, the BBC reports that the Home Smart line will go on sale in the U.S. and U.K. beginning in April.

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Image via Flickr/ Tania Caruso

Apple was loaned $6.5 billion from investors through a bond sale earlier this week, just days after the company released an incredibly impressive earnings report. A company that’s able to sell 75 million iPhones in a single quarter and make a profit of $18 billion doesn’t seem like it would need to take on debt. The fact that it’s sitting on close to $200 billion in cash is another sign of the company’s lack of financial want.

Apple currently has about $34 billion worth of debt. That’s not exactly worrying when the total value of the firm is taken into account, but it is a significant number to consider when valuing the company. CEO Tim Cook has been able to use that investment to grow in recent years, but the question remains: How did Cupertino get into a situation where it needs to borrow to invest in the future?

Why Is Apple Going Into Debt?

Apple is borrowing for one reason and one reason only. The company is giving huge amounts of money back to shareholders every single year through the payment of a dividend and, more importantly, share repurchasing.

Though Apple spends most of its money in the United States, it pulls in more internationally than it does on American soil. A repatriation tax that the company has been complaining about for years means it can’t get that money back to the United States in order to pay for share repurchases and the like. With interest rates so low, Apple is currently paying about 3.5 percent annually for a 30-year debt.

Apple says its share repurchase program will return a total of $130 billion to its shareholders — a level it may not be able to meet with its U.S. holdings. Borrowing relieves that necessity and lets the company bring in a greater windfall should there be a better repatriation deal in place in the future. There are other tax benefits to taking on debt, but the lack of appetite for repatriation is the single most important factor.

What is certain is that Apple holds the majority of its cash outside of the United States and that the company would prefer to move a large part of it home, even at a significant tax loss. Whether a recent tax change volunteered by Barack Obama is good enough for Tim Cook remains to be seen.

Debt Prices Collapse All Over

The low price of borrowing that Apple is taking advantage of is affecting those borrowing from investors across the world. Countries across Europe currently have negative yields on some of their debt, meaning investors are actually paying to loan money to them.

Some companies, most notably Nestle, have actually seen this happen to their debt, and although that seems unlikely to happen at Cupertino, many are benefiting from ultra-low interest rates. Those prices may not be sustainable, however, and given the prominence of central banks in pricing debt, investors unused to the market should stay away.

Apple fans, however, shouldn’t worry too much about the company’s debt accumulation, at least not for now. While earnings continue to grow and the company’s sales are strong, there’s little enough harm in continuing to issue debt in order to buy shares. What is obviously terrible advice for an individual isn’t always the same for companies, especially when it comes to companies that can afford accountants like Apple’s.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted

The post Apple Dives Deeper Into Debt For Just One Reason appeared first on Wall Street Insanity.

Image via Flickr/ Major Nelson

While Sony attempts to organize the entire resurrection of its company around gaming, Microsoft continues to embarrassingly shuffle Xbox numbers into the background of its reports. During a good quarter for the firm, the Xbox division was once again a weak spot. The company’s report, however, made it appear as if a victory had been won, though in terms difficult to compare to previous years.

Microsoft sold fewer units of its Xbox console during the Christmas 2014 period than it did during the same period in 2013. The company revealed total shipments of 6.6 million for the most recent three-month reporting period. That compares poorly to the 7.4 million shipped in the comparable quarter of 2013. Revenue in the division dropped by 20 percent year on year.

Microsoft Hides Xbox Figures

There’s no way to get a good read on the Xbox numbers because Microsoft hides them using a number of obfuscating accounting processes. The Xbox hardware and games are recorded in the “consumer devices and software” segment, which bundles the Xbox with sales of the Surface tablet and other sources of income. This makes it almost impossible to see where the money in Microsoft is actually going, particularly with regard to the Xbox One.

Microsoft fills publications with the most desirable of sales numbers, concentrating on those from the U.S. — a market that the Xbox 360 won convincingly — and failing to release Xbox One sales figures should they not be complimentary. Sony shipped 4.1 million PS4 units over Christmas. Microsoft sold 6.6 million Xbox One and Xbox 360 units altogether in the entire three months.

Microsoft isn’t hiding these figures in order to lure Sony into a false sense of security; it’s hiding them because it’s losing in the market, and it’s losing money on the back of every move made by the Xbox division. The company is selling the console at $50 less than the PS4 and, though it’s clawing back market share at that price, it’s burning cash as a result.

Will Microsoft Kill Xbox?

With a strong brand behind it, it’s difficult to assert that Microsoft would just kill off its Xbox division. Brand recognition, alas, isn’t everything, and exactly what people think of when it comes to the Xbox — living room gaming — appears to lose the company money.

Various possible buyers have been mooted in the past, including Amazon and Google, but neither are likely that excited about a business that will drain their cash despite existing in a mature market. According to analysis that emerged last year, all profits associated with gaming at Microsoft are actually a result of Microsoft’s Android royalties.

This was a big story around the time of the original release of the Xbox One, and became a lead narrative when Satya Nadella took over at the helm of the firm. Microsoft proper has made relatively little mention of the Xbox One as part of its major strategy, though it still seems important at the company. New technology like the firm’s holographic computer, the HoloLens, appears to owe much to innovations at Xbox.

So is Microsoft going to kill the Xbox One? The answer is probably no. The company sees some kind of value in the business, which is why it’s kept at it for all these years. On the other hand, people aren’t going to stop talking about the possibility. Not, at least, until Microsoft actually records a clear profit on the business.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.

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