Rovio – One trick bird.

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Angry birds fly the coop.

  • Rovio’s dependence on Angry Birds has been thrown into sharp relief as the fading popularity of the franchise triggered a dreadful profit warning that caused the shares to halve in value in just one trading session.
  • Q4 17 revenue / EBIT was EUR73.9m / EUR10.4m which was disappointing as investments in acquiring users have had to increase more than expected.
  • I see increasing user acquisition cost is a major red flag with regard to the strength of a franchise.
  • However, the real pain was felt in the 2018 guidance where revenues / EBIT margins are expected to be EUR260m – EUR300m (-12% – 0% YoY) / 9% – 11%.
  • This is 17% below consensus of EU337m and triggered real concern that the company’s best years are now behind it.
  • Angry investors felt that they had been misled by the company which had been communicating in a much more positive tone just a few months ago.
  • This, combined with a high valuation that clearly needed correction, was the main reason for the size of the sell off witnessed.
  • Rovio is not alone in its troubles as its much bigger compatriot, Supercell, is also having a difficult time as its core franchise ages and it struggles to refresh it (see here).
  • Furthermore, I see an overall weakening in the market for games on mobile phones as data from App Annie indicates that spending has switched away from gaming towards media consumption services like Netflix, Hulu and so on.
  • This, combined with a franchise that is quickly weakening following the surprise success of the Angry Birds movie in 2016, leads me to believe that there may be downside to even this very disappointing guidance.
  • The one place Rovio should now look is Asia as there are no signs of the games market on smartphones weakening there and this could provide the company with much needed support.
  • While this could provide some temporary relief, Rovio needs to address the issue of its flagging franchise if it wishes to remain a viable independent entity.
  • Of this there is no sign, and I suspect that things may worsen from here leading to further weakening of the valuation and an opportunistic bid from one of the big digital ecosystems.
  • Tencent would be top of my list but as it already has Supercell, its motivation to also own Rovio will be much more muted.
  • Rovio is no bargain even at these levels.

Supercell – Look east.

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Supercell looks like it is out of ideas.

  • Supercell has had a difficult 2017 driven by its failure to release a new game but also by a shift in spending in Western markets away from gaming towards media consumption.
  • During 2017, Supercell suffered a 14% drop in revenues to EUR1.8bn and a 21% drop in EBITDA to EUR729m.
  • The cause is the fall is obvious as Supercell did not release a new game in 2017 and its long-standing winner Clash of Clans is starting to show signs of ageing.
  • Supercell’s games are all pretty similar in that they involve strategic warfare for control of the board.
  • Supercell has four of these including Clash Royale, Boom Beach and Hay Day in addition to its long-standing showrunner Clash of Clans.
  • The games are free to play but rely on in-app purchases that accelerate the user’s progress through the game or provide upgrades.
  • Clash of Clans is clearly showing its age as it has slipped to No. 7 in the App Annie top grossing charts on iOS from No. 2 in 2016 and Supercell’s other titles are also falling.
  • The last 12 months have also seen a shift in spending as 2016 was dominated by games but now the money is being mostly generated by paid media streaming services such as Netflix, Pandora Music, YouTube, HBO Now and Hulu which are all now in the top 10.
  • This is a sign that the market appeal of this genre of games may be flagging and that Supercell needs to do much more than just release a fresh new game in its historically successful category.
  • Of this there is no sign.
  • However, the same is not true in China, South Korea, Singapore and Japan where the iOS top grossing charts continue to be dominated by gaming.
  • This is why I suspect that Supercell has said that it is focusing on Asia to restore growth in 2018 which should be greatly aided by the fact that it is majority owned by Tencent.
  • While, this may help Supercell to restore growth, its declining relevance in Western markets (especially USA) will make it more difficult for Supercell to become the lynchpin in Tencent’s strategy to expand beyond China.
  • While Tencent dominates at home, its content is not relevant overseas which is why it has been taking stakes in a range of digital assets such as Supercell, Snapchat and Spotify.
  • This could help Tencent to stitch together a portfolio of digital assets into a digital ecosystem offering for developed markets.
  • However, progress to date has been very slow and I begin to wonder whether Tencent is beginning to miss the window of opportunity for this strategy.
  • Tencent remains my favourite digital ecosystem globally but the time is approaching for this position to be reconsidered.

Tencent – Age of empires.

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The WeChat empire spreads its wings.

  • Not content with its dominance of the 3rd party app stores in China, Tencent has doubled down on WeChat with the intention to entice users to spend more than just the Instant Messaging portion of their Digital Lives within WeChat.
  • At an event for developers on January 15th, Tencent announced that it within WeChat there are already 580,000 3rd party apps and services with more than 1m developers and businesses actively engaging with the platform.
  • It is important to note that these are not fully-fledged apps (called mini programs) but more like extensions to WeChat that enable some extra functionality.
  • This can be taken as far as basic games (like Facebook has also done) but not much further.
  • Tencent also announced that it had reached 980m MaUs on WeChat but this figure had already been announced at the Q3 17 results and so it is less relevant here (see here).
  • This is way ahead of what Facebook has achieved which has focused mostly on bots of which there around 200,000.
  • However, given Facebook’s weakness in AI (see here) and my own cursory tests, I suspect that the usefulness of these bots is extremely limited and does very little to enhance the usefulness of the Messenger platform.
  • Tencent on the other hand has encouraged the development of a large range of varied services that include:
    • First, e-commerce: Many retailers have added apps that allow the user to scan a QR code and avoid the queue at the till.
    • User experience is a major issue for offline retailers (see here) and any simple app that enhances the experience even slightly is likely to be well received.
    • Many brands and content providers are also using WeChat to provide loyalty and discovery for their products and services.
    • Second, lifestyle: Many restaurants and services such as bike sharing schemes offer their services within WeChat making access much easier.
    • Furthermore, because these are much simpler apps, they are easier to write, reducing the barriers to entry for smaller businesses.
    • Third, government: Some government entities are also present making things like paying traffic fines much simpler and easier for users.
    • Fourth, games: This is Tencent’s bread and butter and simple multiplayer games make a lot of sense in a chat app.
    • This is something that many of the other chat providers like LINE and KakaoTalk already do and given the size of Tencent’s network, this makes a lot of sense to drive further engagement.
  • Tencent is miles ahead of its competitors in this area as its peers are still slugging out in the brutal app store space and do not have the network with which to attract developers and service providers.
  • This is yet another sign that Tencent is increasingly the strongest ecosystem in China as neither Alibaba or Baidu have the breadth of dominant consumer services that Tencent has.
  • This is why Tencent remains my top choice both in China and globally.
  • However, it has had a very good run and it is worthy noting that RFM ranks Baidu the global No. 2 in AI and by far the No. 1 in China.
  • With all of the hype and high valuations surrounding AI these days, it is surprising that Baidu has not recovered more.

Tencent – Digital circumnavigation.

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Tencent begins to build on Supercell.

  • Following the most difficult set of results after its IPO, Snap has conveniently announced that Tencent has taken a 12% stake in the company.
  • This has awoken take-over speculation that I thought would not really emerge before the shares dropped below $10 and should provide a badly needed boost to sentiment.
  • In its 10Q Snap stated that it had been notified by Tencent that it has purchased 145.8m shares representing a holding of 12% in Snap Inc.
  • If this had been purchased purely through the exchange it would have consumed 25% of the free float which I think would have been noticed triggering a rally and speculation.
  • Consequently, I suspect that the majority of this stake was accumulated by approaching existing holders directly whom I suspect were only too happy to sell.
  • I do not think that this transaction has anything to do with Tencent’s China business but instead is more about Tencent looking at ways of spreading its wings overseas.
  • RFM research (see here) has concluded that Digital Life services in developed markets do not work well in China (mostly because they are blocked) while Chinese Digital Life services do not work well in developed markets as they do not fit culturally and also are predominantly in Chinese.
  • Consequently, the BATmen have had to seek other ways to develop overseas other than just spreading their Chinese services into developed markets.
  • Alibaba is approaching this using the Trojan horse of Alipay (see here), while Tencent is showing signs of assembling a range of assets that would give it good coverage of Digital Life in developed markets (see here).
  • This process began with the acquisition of Supercell in June 2016 (see here), continued with an attempt on Spotify that failed (see here) and now it seems to be latching onto Snapchat.
  • Tencent is the global market leader when it comes to Digital Life coverage with 77% of the Chinese pie covered and 30% of the developed market pie covered with its position in Supercell.
  • Adding Snapchat would take this coverage to 44% ahead of both Google and Apple (who have 40% each).
  • However, it is one thing to have good Digital Life coverage and quite another to create a vibrant ecosystem that one can effectively monetise.
  • The Digital Life measure is only a measure of opportunity which is why RFM uses its 8 Laws of Robotics to assess the quality of the proposition being made to users.
  • Against these tests both inside China and overseas, Tencent does not score well (see here) which explains why the vast majority of its revenue comes from selling content and games rather than from monetising its community.
  • It increasingly looks as if Tencent is embarking on a circumnavigation of the Digital Life pie in order to build an ecosystem to challenge the established Google, Apple, Amazon, Facebook dominance of consumer digital services.
  • Consequently, I expect Tencent to actively seek investments or acquisitions in Media Consumption, Search, Social Networking and so on in order to build its coverage.
  • This is likely to prove to be expensive and in my opinion the real challenge for Tencent lies ahead.
  • This will be to assemble and integrate these assets into a vibrant and consistent community which is something is has yet to do with the majority of its assets in China.
  • It is at this time that its score against RFM’s 8 Laws of Robotics will begin to improve but so far there is not that much sign of it.
  • I continue to like Tencent as it is the strongest of all the Chinese ecosystems and the share price still does not reflect all of the potential upside.
  • Hence, there is still not much very downside in Tencent if it fails to integrate its assets and improve its score on the 8 Laws.
  • However, should it do so, there is plenty of further upside from here.
  • Tencent, along with Baidu and Microsoft remain my top picks.

 

Razer phone– In character.

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For hardcore fans only.

  • Razer has stuck to what it knows in its in launching first smartphone, but its focus on gamers means that the device looks very dated against competition in its price tier (Galaxy s8, Mate 10 Pro, iPhone 8 etc).
  • The Razer phone sports a very average looking screen with large top and bottom bezels but these make sense in the gaming context.
  • The most annoying thing about playing games on smartphones that are all screen, is that there is nowhere to rest one’s thumbs.
  • The large bezels also provide the real estate to include high specification speakers and Razer is also pushing audio as a differentiator for this product.
  • Razer has provided for this at the expense of aesthetics but combined with a 120hx refresh rate on the display and a snapdragon 835 and a whopping 8GB of RAM, I think it is safe to say that this will provide arguably the best overall gaming experience.
  • True to its roots it also allows gamers to tweak the performance of the device to optimise battery life against performance with the Razer app that comes preinstalled.
  • The Razer phone is effectively a tweaked Nextbit Robin which was the lead product of the small phone maker that Razer acquired in January.
  • This makes sense as it would have been almost impossible to come up with a new design from scratch in such a short time period.
  • Unfortunately, in order to benefit from the 120hz refresh rate, games companies need to include support for it in their apps meaning that the majority of Android games will not be able to make use of this key feature.
  • However, it has announced partnerships with Tencent, Square Enix, Namco and several others meaning that some high-end games will be able to work optimally with the device.
  • Razer has a similar problem to the one that caused Microsoft no end of grief which is that the average consumer will not understand its product and will only see an old looking device at a high price.
  • Consequently, I think that this is an enthusiast device that will only be purchased by users that are already very familiar with Razer and most likely own its products.
  • That being said, I have estimated that the software that it offers on its PCs has between 5m and 10m active users (see here), which probably makes up a big part of its core fan base.
  • If 5-10% of these users buy the device, then this would represent shipments of 500,000 or revenues of around $280m (at my estimated wholesale price).
  • This would help support Razer’s lofty valuation of around 10x sales at IPO, but margins are likely to be very low, leaving me unchanged in my opinion that there will be a better time to consider this one.

Razer – The public game.

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Its too early for Razer to go public.

  • Razer wants to become the ecosystem for gamers but its progress in this area is at such an early stage that I think it has no business being a public company.
  • This is because when a company is in transition, things rarely go to plan meaning that deviations from forecasts on results day are likely to be large resulting in wild swings in the share price.
  • Furthermore, the fact that Razer is listing at $4.5bn, which is more than 10x the revenue that the company is likely to report for 2017, means that any slips or misses will be severely punished.
  • Razer is a PC Gaming hardware company that prides itself on providing PCs and peripherals that cater to exactly what gamers want.
  • On the back of this PC enthusiast niche, it recorded sales in 2016 of $392m upon which it made a reasonable gross margin of 28%.
  • However, just $0.095m (0.2% of turnover) was from software and services which grew to $0.11m (0.6% of turnover) in H1 2017.
  • This tells me that first and foremost, Razer is a hardware company whose best shot at monetising its ecosystem will be through premium device pricing.
  • Apple is the gold standard of hardware monetisation where its gross margins on the iPhone are comfortably over 40%.
  • This means that Razer needs to use software and services to create a user experience that can only be had on Razer products driving increases in prices for Razer products over and above competition.
  • This will be very difficult as:
    • First: virtually all of its products only run software and content created by third parties that is available elsewhere.
    • Second: its ecosystem is almost non-existent today.
    • At the heart of its fledgling ecosystem a is a software platform that launches, aggregates and compares prices of games as well as software that enables LED colour patterns.
    • This software has 35m registered users but the fact that there are only 7.8m likes on Facebook, 2.9m Twitter followers, 1.8m Instagram followers and 1.2m followers on YouTube leads me to think that the active users are somewhere between 5 and 10m.
  • RFM research (see here) has found that in order to hit critical mass, an ecosystem needs to have 100m+ users indicating that Razer has a very long way to go.
  • However, given that gaming is a specific niche within the consumer electronics industry, critical mass for Razer could be substantially lower.
  • Twitch now has well over 100m active users and so if Razer was to achieve somewhere in the realm of 50m, that could be enough to begin ecosystem monetisation in earnest.
  • Razer is also planning to launch a gaming-optimised smartphone which does make some sense as gamers who play games on PCs do also play games (albeit different games) on smartphones and tablets.
  • This has been tried multiple times in the past with no success but gaming does remain the one segment of the Digital Life pie where there is no dominant player in developed markets.
  • As a result, if Razer can create a vibrant and engaged community of gamers on its mobile devices then it could begin to generate device preference which in turn will lead to increases in gross margin.
  • Unfortunately, at a valuation of $4.5bn (around 10x revenues) a lot of this success (which is far from guaranteed) is already being priced into the shares.
  • As a result, any slip (which is quite likely given the transition) is likely to be severely punished by the market meaning that there will probably be a much better time to consider being involved.

Virtual Reality – Endless funk

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Even Oculus doesn’t believe the hype.

  • Oculus has sent the surest signal yet that all is not well with virtual reality (VR) in a move that can only be interpreted as an admission that VR is far from being able to live up to the expectations that have been set for it.
  • Oculus has updated its policy for its app store that allows a user who is dissatisfied with something that he has purchased in the store to get a no questions asked refund.
  • This applies to both Oculus Rift and Gear VR content subject to the following:
    • First: The user can not have spent more than 2 hours using the content (30 mins Gear VR).
    • Second: The application for refund must be made within 14 days (2 days Gear VR).
    • Third: The refund does not cover movies or content that is bought as part of a bundle although the whole bundle appears to be covered.
  • This generous policy is an indication that the experience offered by VR is far from satisfactory which is hurting both hardware shipments and software revenues.
  • Hence, in order to keep interest in the platform and prevent disgruntled users from chucking the device in drawer, it has to offer a sale or return policy that is almost unheard of in software.
  • It is clear to me that the problems that have plagued VR since its inception are still far from being solved.
  • These are:
    • Price: Many of the devices cost several hundreds of dollars and also require a PC to run, further increasing the cost.
    • Sony is the one exception which is why I am pretty sure that it is currently the runaway leader albeit in a very small market.
    • Clunky: VR and AR units are still large, clunky and uncomfortable to wear.
    • In many cases they also make the user feel foolish when wearing one.
    • Comfort and security: VR cuts the user off from almost all sensory inputs from his immediate environment severely limiting the situations in which the user would feel comfortable using one.
    • Many units also cause feelings of nausea due to an imperfect replication of the real world compared to what the brain is expecting.
    • Cable: Many units require an HDMI cable which prevents the user from moving and also increases the risk of a fall should the user trip over the cable.
    • Content: Both games and content remain in short supply and of poor quality necessitating the Oculus shift in policy.
  • The net result is that VR is clearly still far from ready prime time and there remains a lot of work to do before volumes will really take off.
  • I do not see this happening in 2017 meaning that the outlook for next year remains pretty grim.
  • This is why I see the likes of Facebook and Apple pivoting their consumer offerings towards viewing and interacting with a virtual world through the camera of a smartphone rather than with a head unit.
  • Augmented Reality has more problems than VR but the case for it in the enterprise remains strong.
  • This is because there are immediate productivity benefits to be had from deploying a unit to parts of the work force and critically, in the enterprise one can get away with a poor user experience.
  • This is because users are paid to have the experience meaning that they are willing to endure the shortcomings listed above.
  • The net result is that I think VR will continue to disappoint with all the action in the short-term remaining squarely in AR.

Tencent – Tale of two pies.

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Tencent dominates but still has much more to do. 

  • Tencent already dominates Digital Life in China and now it is increasingly turning its attention to the opportunity overseas.
  • This makes sense as China is starting to show signs of maturity meaning that the recent breakneck pace of growth will inevitably slow down forcing the BATmen to look overseas for more growth.
  • RFM has long identified that ecosystems and smartphone usage in China and developed markets are very different (see here).
  • This means that Chinese Digital Life services are not really relevant in developed markets and visa versa.
  • This means that overseas expansion for the BATmen has to be much more than just attempting to offer their Chinese services overseas.
  • While Alibaba is looking to grow overseas using AliPay (see here), Tencent is focused on adding relevant developed market assets to improve its coverage of Digital Life in developed markets.
  • This strategy has begun with the purchase of Supercell giving Tencent coverage of Gaming but it looks as if Tencent is keen on acquiring other segments of the Digital Life Pie also.
  • Most recently, Tencent appears to have made a move on Spotify that would have given Tencent a very strong position in Media Consumption.
  • Combined with Gaming, this would have given Tencent 40% coverage of the Digital Life pie in developed markets along with the 77% that it already has at home.
  • Spotify appears to have spurned Tencent’s advances, but I suspect that Tencent will continue to look for key strategic assets to improve its position in Digital Life in overseas markets.
  • Currently, Tencent has 30% coverage with Supercell but there is far more to creating a vibrant ecosystem than just gathering assets which provide coverage of Digital Life.
  • The trials and tribulations of Yahoo are all the evidence that one needs to conclude that one cannot succeed by coverage alone.
  • In 2014, Yahoo had 73% (more than anyone else at the time) of Digital Life covered but failed to create any meaningful traction on mobile devices.
  • This is because it was unable to take what were essentially fixed services and successfully leverage them into mobile.
  • Tencent does not have this problem as its traction in mobile is already strong but what it is missing is an understanding of the importance of integration.
  • I have long believed that to be really successful, the different services across Digital Life need to be integrated such that usage can be understood as a profile rather than a series of discrete and independent services.
  • This is one of the key ingredients of Google’s success and is something that Baidu and, increasingly Alibaba, are beginning to get to grips with.
  • Tencent on the hand, appears to be quite far behind in terms of grasping the importance of integration as I still see no signs of this happening.
  • In the short-term this is not a big problem but as Tencent’s valuation continues to rise, it will become an increasingly necessary for Tencent to bring its assets together in a cohesive way to justify its share price.
  • This is how Tencent can really begin to monetise its ecosystem beyond the sale of content and games and become a place where users spend their Digital Lives.
  • In China, some of this is coming through the rapid expansion of WeChat from a place to exchange messages to a place where all sorts of transactions can be executed.
  • However, in the long-term Tencent needs to have all of its services integrated and in that regard, there is quite some way to go.
  • I continue to like Tencent as it is the strongest of all the Chinese ecosystems and the share price still does not reflect all of the potential upside.
  • Hence, there is still not much very downside in Tencent if it fails to integrate its assets.
  • At the same time there is the promise of further improvement in the long-term if it begins to develop its ecosystem beyond a series of very successful but discrete services.
  • Tencent, along with Baidu and Microsoft remain my top picks.

iOS vs. Android – Catch-up

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Android is snapping at Apple’s heels.

  • Android is showing signs of catching up with iOS in terms of user spending at the high-end, but further down the pricing tiers and in mobile advertising, I think that iOS remains miles ahead.
  • A recent study of the habits of 1.4m USA based users during the month of June 2017 was carried out by DeltaDNA, an analytics firm.
  • The study only measured gaming but this is already well known to be by far the biggest revenue generator from any Digital Life segment.
  • Almost all games these days are free to play and have in-app purchases for monetisation.
  • It is these that the survey measured and I have expressed these as ARPU $ / month.
    • Samsung Galaxy s8 / s8+: $6.30 / $16.20
    • Google Pixel / XL: $6.30 / $9.60
    • iPhone 7 / 7+: $8.40 / $10.80
    • Other US Android devices: $6.00
  • From this I conclude:
    • First: Screen size and quality is a big determinate in game monetisation.
    • The Samsung Galaxy s8+ which has by far the best screen (and the best audio in my opinion) available on the market today, is clearly making a difference to game play with the observed results.
    • Second: On normal screens, iPhone is still comfortably ahead of both the s8 and the Pixel but the gap is closing.
    • Third: Both the s8 and the Pixel are not meaningfully better than other Android devices implying the that user experience on the s8+ and Pixel XL has nothing to do with their better monetisation.
  • Although these models are clearly closing the gap on the iPhone, when it comes to total revenue generated there still remains a vast chasm in terms of total revenues generated.
  • In Q1 17A, Apple generated $7.04bn in revenues from services while Google other revenues were $3.10bn ($3.09bn in Q2 17A).
  • These figures are not direct comparisons as there are other businesses also included in these figures, but I think it is pretty safe to say that Apple App Store is easily generating double the revenue of Google Play.
  • A large part of this will be because in the high-end segment Apple has much higher share but also because Apple does still clearly offer a higher quality apps and services experience as the data for the regular sized phones indicates.
  • Furthermore, I have not seen a shift in the mobile advertising metrics and so I still believe that an iOS device generates double the advertising revenues of an Android device.
  • This data should send a warning shot across Apple’s bows as the better Android devices are certainly snapping at its heels.
  • Should they finally catch up, Apple may find it starts to feel the dreaded pricing pressure that will hurt profitability.
  • This is why I continue to believe that Apple needs to make its ecosystem sticky in areas other than its App Store which is what I think its strategy around HomeKit, HealthKit and Apple Pay are centred around.
  • However, to date, not a huge amount of sustainable traction has been generated by any of these services and so Apple has to radically improve them or think of something else.
  • This is one reason why the iPhone 8 is so important as once again it has slipped too far behind the hardware curve and needs to catch up.
  • With the rally that we have seen in 2017, the valuation argument for holding Apple has long since evaporated which is why I would prefer to hold Tencent, Baidu or Microsoft for this year.

Microsoft FQ4 17 – Head in the clouds.

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Not a cloud in the sky.

  • A strong finish to the fiscal year cements Microsoft’s positions as the main alternative to Amazon Web Services and as the preeminent provider of a Digital Work ecosystem.
  • FQ4 17 revenues / Adj-EPS were $24.7bn / $0.75 nicely ahead of consensus at $24.3bn / $0.71.
  • Outperformance was primarily driven by Azure which grew by 97% YoY and Office 365 which showed continued to show healthy progress in both the enterprise and with prosumers.
  • Gross margins improved slightly as favourable product mix was able to offset the impact of the increasing share of revenues coming from the cloud which has much lower gross margin than licence sales.
  • This is entirely normal and RFM research has shown that in Microsoft’s case in the long-run, it is better to have recurring revenues at lower gross margins than one off sales at much higher levels.
  • This is because the one-off sales do not occur frequently enough to generate more profit than subscription revenues at much lower margins.
  • Consequently, gross margins are going to remain under pressure in future albeit at a lower rate as cloud gross margins are rapidly expanding as the businesses continue to scale.
  • Guidance for FQ1 18E was a little light with revenues / EBIT of $24.0bn / $7.1bn forecast compared to consensus at $24.2bn / $7.4bn.
  • Guidance for FY18E remains unchanged with the priorities being placed upon increasing cloud gross margins and cautious growth in OPEX.
  • While the Digital Work ecosystem is going from strength to strength, the consumer ecosystem continues to wither away.
  • The one exception is gaming where the Xbox live community is still growing nicely and Microsoft remains the only real challenger to Sony in console gaming.
  • Despite this, I still think that Xbox Live is a massively under-utilised asset is it has completely failed to get any real traction in mobile gaming.
  • This is why I still think that there may be a party out there that is willing to pay more for Xbox than it is worth to Microsoft.
  • In that instance, Microsoft should sell Xbox in the best interest of its shareholders.
  • Microsoft is not the most exciting company in my universe but it has been one of the steadiest over the last 2 years and there is every sign that this will continue into FQY 18E.
  • Microsoft remains along with Baidu and Tencent, my two top picks.