| ▲ | TylerE 2 hours ago |
| They are unprofitable though. Profit margins of the entire Xbox division are less than just sticking the money in the bond market. |
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| ▲ | gruez 2 hours ago | parent [-] |
| margins can't be compared to interest rates, because it's comparing revenues against costs. Comparing that with interest rates yields nonsensical results. If you want a proper comparison, you'd need return on capital, which requires you to figure out how much capital is in the gaming division. |
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| ▲ | TylerE 2 hours ago | parent [-] | | Why not? If you input $1000 into process A which returns $20, and inputing $1000 into process B returns $30, you'd be insane to invest in process A and not process B, right? | | |
| ▲ | gruez 2 hours ago | parent [-] | | That example only says 3% margin is better than 2% margin, not whether the hypothetical process yields better results than a bond paying 4% (or whatever). If the said process takes exactly 1 year to complete, and requires all the inputs to be provided upfront, then its margins can be directly compared to bond yields, but businesses are rarely that simple. | | |
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