MS Xbox division posts Q1 profit

[Zeus]

Microsoft has reported a quarterly profit in the Xbox’s Entertainment and Devices Division, driven by strong demand for Halo 3 and Xbox 360 hardware. Ms posted unaudited operating income for its first quarter ended September 30 of $165 million in the division, compared to a loss last year of $142 million. Revenues for the division were up 91 percent to $1.93 billion. MS said they had sold 1.8 million 360's during the quarter, with record attach rates during the quarter in the US. CFO Chris Liddell said “We feel very good about our position going into the holidays,”

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News Source: <a href="http://www.next-gen.biz/index.php?option=com_content&task=view&id=7686&Itemid=2" target=_blank">next-gen</a>

[0 morgan 0]

Well there you go MS has already paid off its loss from replacing 360's. Any profit it is a profit more than we can say for Sony ATM. :(

[xllzerollx]

sony just needs a miracle with the 40gb 360
and have ms ever release a report on how many 360s they fix in a quarter?

[billysastard]

sony just needs a miracle with the 40gb 360
and have ms ever release a report on how many 360s they fix in a quarter?

well they have sold about 12 million and assuming that around 4 million a year fail (33.3%) that would mean they are fixing around 1 million a quater i'd guess.

[nuke868]

Never have seen so much **** on a single report ever hahahahaha

Now explain us how u can turn a minimum 1.8 losses of 2007(at august) to a

1.93 billion revenues hahahahahah i mean they should use x360 even as

tiles to have those result, this is awesome

"Revenues for the division were up 91 percent to $1.93 billion."

Decade false best.

[mystic54]

Never have seen so much **** on a single report ever hahahahaha

Now explain us how u can turn a minimum 1.8 losses of 2007(at august) to a

1.93 billion revenues hahahahahah i mean they should use x360 even as

tiles to have those result, this is awesome

"Revenues for the division were up 91 percent to $1.93 billion."

Decade false best.

http://kotaku.com/gaming/steve-ballmer/microsofts-games-division-doesnt-lose-money-again-315244.php

Microsoft points to strong sales of Halo 3, the Xbox 360 and video game accessories as revenue drivers, helping the entire E&D Division pull in some $1.93 billion for the second quarter.

Not by itself did the Xbox 360 do it.

"According the quarterly earnings release, Microsoft shipped 1.8 million Xbox 360s to market, twice that of the previous quarter. The company expects that for the second half of the fiscal year, revenue for the fun side of Microsoft will improve based on "increased sales of Xbox 360 consoles and related games, accessories, and services, and sales of Zune products." Go Zune!"

According to the article.

[danight]

well they have sold about 12 million and assuming that around 4 million a year fail (33.3%) that would mean they are fixing around 1 million a quater i'd guess.

Stupid post of the day!
Please link to any site that confirms that.

[sigma8]

Well there you go MS has already paid off its loss from replacing 360's. Any profit it is a profit more than we can say for Sony ATM. :(

Yes, but they are still replacing 360's like crazy. If they just took a normal loss last fiscal year instead of a HUGE loss, then they would not have been profitable this quarter..

They shifted their losses from this fiscal year into last fiscal year so they could APPEAR profitable. This is only sneaky accounting.

[nuke868]

Yes, but they are still replacing 360's like crazy. If they just took a normal loss last fiscal year instead of a HUGE loss, then they would not have been profitable this quarter..

They shifted their losses from this fiscal year into last fiscal year so they could APPEAR profitable. This is only sneaky accounting.

Bingo luckily somebody still thinks and doesnt take kotaku the paid and biased m$ place by definition as an nfo site.

[Hidari_Mak]

Originally Posted by 0 morgan 0 View Post
Well there you go MS has already paid off its loss from replacing 360's. Any profit it is a profit more than we can say for Sony ATM.

Yes, but they are still replacing 360's like crazy. If they just took a normal loss last fiscal year instead of a HUGE loss, then they would not have been profitable this quarter..

They shifted their losses from this fiscal year into last fiscal year so they could APPEAR profitable. This is only sneaky accounting.

Considering how many press releases they released about that one billion dollar investment, I'm not sure if "sneaky" fits. Sony resolved the faulty drives issue with the launch PS2s by denying that there was a problem, waiting for a class action lawsuit, and reaching an out-of-court settlement. Comparatively, Microsoft making a one-time payment publicly, thereby telling their investors that it's one less thing to worry about, seems more open.

But regarding what "0 morgan 0" stated, Microsoft is likely still selling the 360 at a loss, and will probably continue to operate their Xbox division at a loss for another 8-12 months from what I've read. They're not losing as much per console as Sony is, and are definitely selling more games per console to make up for it, but it's Microsoft's deep pockets which are helping the 360 more than anything.

[mystic54]

Bingo luckily somebody still thinks and doesnt take kotaku the paid and biased m$ place by definition as an nfo site.

Oh, no you got me! Sorry, I guess I have real things to remember at school rather than one strategy a company was taking posted a couple months back.

[mikecanada]

the last time that they posted a profit was when Halo 2 came out

[sigma8]

Considering how many press releases they released about that one billion dollar investment, I'm not sure if "sneaky" fits. Sony resolved the faulty drives issue with the launch PS2s by denying that there was a problem, waiting for a class action lawsuit, and reaching an out-of-court settlement. Comparatively, Microsoft making a one-time payment publicly, thereby telling their investors that it's one less thing to worry about, seems more open.
Well, by sneaky, I meant to the public. Anyone paying a tiny bit of attention will see it, but most people only read headlines for the moment. "Oh! Profit!"

But regarding what "0 morgan 0" stated, Microsoft is likely still selling the 360 at a loss, and will probably continue to operate their Xbox division at a loss for another 8-12 months from what I've read. They're not losing as much per console as Sony is, and are definitely selling more games per console to make up for it, but it's Microsoft's deep pockets which are helping the 360 more than anything.
We keep hearing about deep pockets...and it's certainly deep pockets that keeps the Xbox alive, but it very much seems like a rich kid on a very reasonable (not extravagant) allowance. He always has money, but not a lot. If he had lot, he'd buy WAY more advertising space in Japan, gobble up far more indie developers, and it would be an unstoppable juggernaut...it wouldn't be close competition. And by competition, I'm including Nintendo.

If cost is a factor, and MS has such deep pockets, why not chop off an extra $100 off the current prices?

I mean, they are amazingly wealthy...but Xbox division gets only some of that, and has to make due.

[Sinar]

Considering how many press releases they released about that one billion dollar investment, I'm not sure if "sneaky" fits. Sony resolved the faulty drives issue with the launch PS2s by denying that there was a problem, waiting for a class action lawsuit, and reaching an out-of-court settlement.
Yes thanks to sony for that, GTA:VC freezes with DRE in exactly the same places for me then resumes often sending the car out of control, because this was a private settlement i never got a rebate/repair.
Ms spent 1 billion on repairs thats likely a quarter gone already (just my theory) Record attachment rates is obvious.. all those people buying halo 3 and those crappy ea sports titles, points cards and so on. 1.8 million units sold is satisfactory but i question how much profit those units actually made.

As far as this goes this is sneaky marketing for those not willing to read up. The 360 was built as a lossmaker right from the start and the previous xbox was one of the highest console lossmakers (ms never profited really)

[billysastard]

Stupid post of the day!
Please link to any site that confirms that.

yeah, realy stupid isnt it?

try the internet and search for xbox 360 failure rates you'll find that outside ms everyone accepts a failure rate of around 33%, now try vgcharts, nexgenwars and npd figures to see how many units ms has sold (around 12 million).

now unless basic maths has changed since i was at school 33% = 1/3 or near enough and 1/3 of 12 million is 4 million so that means 4 million units fail each year since the question was how many repairs each quater and a quater is 1/4 of a year (unless thats been changed too) then 1/4 of 4 million is 1 million therefore ms are having to repair approx 1 million x360's a quater.


i'd say you made yourself look pretty stupid at best and like some raving xbox 360 fanboy at worst.

[Reset]

Yes, but they are still replacing 360's like crazy. If they just took a normal loss last fiscal year instead of a HUGE loss, then they would not have been profitable this quarter..

They shifted their losses from this fiscal year into last fiscal year so they could APPEAR profitable. This is only sneaky accounting.
We'll we all know they had to accept the loss of 3 billion last quarter, so your right in a way. basically they have mostley accounted for the cost of repairing 360's and now they are looking at profits after said fact. to me, it makes sense to account for your losses, so you can move on. whats done is done as far as the 3 year warranty, what we see now is how they are doing since writing off 3 billion (which since it was unexpected, should be fine as it just had to be done).

[Hidari_Mak]

Well, by sneaky, I meant to the public. Anyone paying a tiny bit of attention will see it, but most people only read headlines for the moment. "Oh! Profit!"

I suspect that a bigger reason is to just keep their shareholders happy, since they'll care more than most about this sort of thing. This way, they can safely think of it as a big expense that won't return, to solve a problem that had them concerned. If Microsoft instead stated "$400,000 effective immediately, and another $300,000 for next year and the year after", investors would worry about the impact on future profits and question if that would really be it.

We keep hearing about deep pockets...and it's certainly deep pockets that keeps the Xbox alive, but it very much seems like a rich kid on a very reasonable (not extravagant) allowance. He always has money, but not a lot. If he had lot, he'd buy WAY more advertising space in Japan, gobble up far more indie developers, and it would be an unstoppable juggernaut...it wouldn't be close competition. And by competition, I'm including Nintendo.

If cost is a factor, and MS has such deep pockets, why not chop off an extra $100 off the current prices?

I mean, they are amazingly wealthy...but Xbox division gets only some of that, and has to make due.

You're confusing "deep" with "limitless". :D Microsoft announced before the first Xbox launched their doubt that they'd ever earn any money off of it. Live cost a fair bit to put into place, as did all of the development houses which went from independent third parties to second and first parties.

And really, what would be the point of losing massively larger amounts of money from launch to go after the Wii fans? Without an interactive controller of equal note, they'd be less likely than Nintendo to attract people who'd otherwise wouldn't bother buying a console, and that group is the same one that's really not bothering that much to buy games. All they'd possibly accomplish is moving the PS3 to a more distant third place from a relatively less distant third place. And even at $199, most casual gamers wouldn't buy yet another console until it had a few inexpensive games which they'd personally consider must-have. And building that up takes time.

Microsoft delayed their initial price drops. I'm guessing they'll do so whenever they need to. And at the moment, against the PS3, they don't need to. My 2�¢.