Microsoft just confirmed the largest round of layoffs in Xbox"s history, cutting 3,200 jobs and divesting several studios. Xbox CEO Asha Sharma cited finances as one of the main reasons for the layoffs, as she"s described the gaming division’s margins as far worse than the competition.
However, looking at Microsoft as a whole, the company remains one of the most valuable in the world. The latest report from fintech company OnDeck ranked Microsoft as the world"s second most valuable brand. The report puts Microsoft"s brand value at $424.8 billion, behind only Apple at $522.7 billion, and ahead of Google at $365.0 billion and Amazon at $338.1 billion.
To clear any confusion, brand value isn’t the same thing as market cap or overall company valuation. It"s meant to estimate what a company would theoretically have to pay to acquire its own brand if it didn"t already own it. So, let’s say someone hypothetically made Microsoft a private company and handed it to you. Microsoft would have to pay you $424.8 billion just to get its brand back.
Brand valuation is based on metrics like financial performance, future earnings potential, competitive strength, and how emotionally attached consumers are to it. It’s reasonable to assume Microsoft scores highly in all these categories, even without looking at reports.
The rankings tell another interesting story. Microsoft has faced a lot of criticism in the past months and years. Users were particularly unhappy about the heavy AI push and the frequent instability of Windows updates, with the downsizing of popular gaming studios like id Software only being the latest addition to the growing pile of complaints.
However, user sentiment isn’t included in the brand value calculation. That allows Microsoft to operate as the second most valuable brand in the world, even if not all of its customers are happy.
Source: OnDeck