Microsoft loses 2 billion dollars this year on the 360.

[QUOTE="baddog121390"]Didn't Sony loose a few billion earlier this year?musacircuit

So if 1 billion goes to repairs their is still a billion more.I guess MS should just quit this industry for good and i bet it'll happen sooner rather than later if this continues.

http://www.gamespot.com/news/6175367.html?om_act=convert&om_clk=newstop&tag=newstop;title;1

musacircuit

Sony HAD to borrow money lol, unlike MS, even if they lose 1 bil, they still recorded a 13 to 15 bil profit

i rather lose 1 billion and gain 15 billion than borrow money from the bank

[QUOTE="musacircuit"][QUOTE="SUD123456"]

Maybe the TC and a bunch of you otherpeople should actually read the article and apply some basic reasoning skills.

How much did they lose in the 4th Quarter which just ended?

The answer is $1.20B

How much of that was a ONE-TIME warranty provision?

The answer is $1.06B

Meaning, how much was the routine operational loss?

The answer is $0.14B or $140 Million.

Which means that the division is on the verge of profitability. Indeed it will turn a profit in Q1 of this fiscal year. And a significant profit in Q2 which includes the run-up to Christmas.

You see my 14 year old friends, ONE-TIME provisions do not affect future operating results. There will be a profit turned in fiscal year 2008 which started July 1st and that is precisely why MS took the big bath late in the 4th Quarter of last year, which ended June 30th.

READING COMPREHENSION FTW

SUD123456

You do realize that you don't know how companies operate and what is profit, right? The money lost in a previous accounting period is not relevant to this accounting period. The money lost so far on the Xbox360 is effectively a sunk cost. Call it a devopment cost...or an investment cost if you will. Those losses are already compounded fully into MS share price and have no bearing on future profit. MS will indeed turn a profit this Quarter even if you cannot understand how that is possible.

However, I am kind...so I will explain it to you.

The money spent is a sunk cost. Meaning it is already spent and you cannot turn back time and change your decisions. Because of this, companies, and investors, make decisions that are current and forward looking.

If you have lost say $2 Billion and decide to fold up shop and quit, then you have lost $2 Billion. You might do this if there is no hope of the next sales being profitable either...eg. each unit you expect to sell in the future will also be at a loss.

If you have lost say $2 Billion and you are now profitable for each unit you are CURRENTLY selling, then you are making a profit on those units in that time period.

In either case, the amount of money you have already lost, $2 Billion, is irrelevant. The decision to proceed is based upon whether the current and future units are profitable or not.

This is why your original post is bunk and completely wrong. The decision to keep making a product is based upon the current and future profitability....not what you have sunk into in the past. It would be like your own personal gold mine....where you dig and dig just to get down to the right level and then you quit....2 feet before finding gold.

The point of all this being that from an investment point of view the $2B in the past is irrelevant to the shareholders decision of what to do now.

/thread

Ur logic is so flawed that it isnt even funny.So if 360 goes on to mahe 2 billion profits this gen do u seriously think that MS would be happy with that.NO cuz it also lost 3 billion which means a net loss of 1 billion.

I just need u to teach one thing.Unless MS recovers the losses made by the xbox,the share prices would have been better off if MS had never entered the gaming industry.Seriously am i debating with someone who thinks that investment is a cost that doesnt need to be recovered and companies would just be happy to cover variable costs.:roll:

*snip*thinicer

I'm assuming nothing, even the Wii which is a comparatively underpowered console has higher assembly costs per unit than the 360 does. While we can't know to what extent they cut corners we KNOW they cut corners on the console.

How may you ask? How about the lack of the rubber pads on the drive laser? That is an easily preventable issue that could be fixed with an additional cost of materials at less than a dollar per unit. They instead decided to NOT shield the metal around the laser and charge $20 per disc when their crappy system ends up ruining a disc.

Finally, you do know that assembly expenses in manufacturing has nothing to do with the components/quality per se? Ooops, I guess not. Assembly expenses has to do with ASSEMBLING the components together. So your whole point of comparison is utter bunk. TRY HARDER NEXT TIME

SUD123456

Let me ask you this, which do you think will result in more mistakes in assembly, a $6 per unit allowance or a $40 dollar per unit allowance. If you said the $6 cost, you are BUZZZZ INCORRECT. As is the unit where I work is getting problems with the video signal where it will work for two minutes and then display a black screen, I've seen so many issues with 360s first-hand there its ridiculous.

Some of these things were certainly preventable like the scratched discs we've gotten back. You probably don't "overlook" something like that in an operation that major and if you do happen to "overlook" it, guess what? You fix it as soon as you are aware of the issue.

Mechanical problems are usually the result of cost-cutting measures.

You must be part of the IBM engineering team. :roll:

PS3_3DO

The heating issues are not so much with the CPU, they are with the GPU and insufficient cooling this has been confirmed in numerous articles numerous places around the web, until they fix the clamp design and/or improve the cooling system that comes out of the box the problem will not go away.

65nm uses less electricity and so theoretically can generate less heat (if there is no energy leakage), but it also causes a greater heat concentration.

I'm assuming nothing, even the Wii which is a comparatively underpowered console has higher assembly costs per unit than the 360 does. While we can't know to what extent they cut corners we KNOW they cut corners on the console.

How may you ask? How about the lack of the rubber pads on the drive laser? That is an easily preventable issue that could be fixed with an additional cost of materials at less than a dollar per unit. They instead decided to NOT shield the metal around the laser and charge $20 per disc when their crappy system ends up ruining a disc.

Even the cheapest DVD players have those, its unexcusable that the 360 which is supposed to be a piece of high-end electronics does not. They cut corners, quit trying to deny it.Runningflame570

Yes, yes, yes...I have heard all this before. But that still doesn't explain why the Xbox 360 is failing. You say it's because they cut corners, but are lack of rubber pads the reason the Xbox 360 is failing with the red ring of death? Maybe it's the reason why discs are scratching, but how is that certified proof that Microsoft cut corners on the design of their chipset? None of us know for sure. That's why you are assuming. You are not an authority figure, you don't work for Microsoft, and I doubt you even have a degree in electrical engineering. But I guess with the powers of the internet anybody can pretend to know what they're talking about.

But the truth of the matter is, you don't know why the Xbox 360 is failing with the three red lights, except to say "they used poor materials and cut corners." To me, that's very ambiguous and I think, if that were the real reason why, Microsoft would have solved this problem a long time ago. If that's all it took, just using better materials, I think that this could have been solved a year ago. But the problem still persists and now Microsoft is going to have to spend billions in an attempt to right it.

And from the pictures of repaired Xbox 360s, it looks as though Microsoft believes that heat & improper cooling is what is causing the system to fail. Maybe they're right? I don't know. Guess we'll see when falcon comes out!

Let me ask you this, which do you think will result in more mistakes in assembly, a $6 per unit allowance or a $40 dollar per unit allowance. If you said the $6 cost, you are BUZZZZ INCORRECT. As is the unit where I work is getting problems with the video signal where it will work for two minutes and then display a black screen, I've seen so many issues with 360s first-hand there its ridiculous.

Runningflame570

Question: where are you getting the $6 per unit allowance figure from?

[QUOTE="SUD123456"]

Maybe the TC and a bunch of you otherpeople should actually read the article and apply some basic reasoning skills.

How much did they lose in the 4th Quarter which just ended?

The answer is $1.20B

How much of that was a ONE-TIME warranty provision?

The answer is $1.06B

Meaning, how much was the routine operational loss?

The answer is $0.14B or $140 Million.

Which means that the division is on the verge of profitability. Indeed it will turn a profit in Q1 of this fiscal year. And a significant profit in Q2 which includes the run-up to Christmas.

You see my 14 year old friends, ONE-TIME provisions do not affect future operating results. There will be a profit turned in fiscal year 2008 which started July 1st and that is precisely why MS took the big bath late in the 4th Quarter of last year, which ended June 30th.

READING COMPREHENSION FTW

musacircuit

You have a link?

[QUOTE="blackace"][QUOTE="musacircuit"]

So if 1 billion goes to repairs their is still a billion more.I guess MS should just quit this industry for good and i bet it'll happen sooner rather than later if this continues.

http://www.gamespot.com/news/6175367.html?om_act=convert&om_clk=newstop&tag=newstop;title;1

musacircuit

Sony lost 1 billion in the 1st quarter and will lose 2 billion in the 2nd quarter, so they should quit the industry as well, right? :roll: Please open you mouth a little wider when you speak.

You do know that M$ has like 10 times the amount of fund in their bank then Sony right. They can afford to lose money for 6 years, as they are making more profitwith their software division the Sony is with their electronics. Like I said. Open your mouth a little wider when you speak. M$ could buy Sony and clear their debt if they wanted to. M$ has already cleared up a lot of the debt they've had from the XBox. Why do you think their gaming division will be profitable in the 1st quarter of 2008? :roll: Sony's PS3 is actually hurting their electronics division more then the XBox is hurting M$ Software division.

[QUOTE="PS3_3DO"]

You must be part of the IBM engineering team. :roll:

Runningflame570

The heating issues are not so much with the CPU, they are with the GPU and insufficient cooling this has been confirmed in numerous articles numerous places around the web, until they fix the clamp design and/or improve the cooling system that comes out of the box the problem will not go away.

65nm uses less electricity and so theoretically can generate less heat (if there is no energy leakage), but it also causes a greater heat concentration.

Read this.

http://www.theinquirer.net/default.aspx?article=40329

and this --->http://www.engadget.com/2007/06/13/microsoft-beefs-up-xbox-360-cooling-freaking-finally/

[QUOTE="musacircuit"][QUOTE="SUD123456"]

Maybe the TC and a bunch of you otherpeople should actually read the article and apply some basic reasoning skills.

How much did they lose in the 4th Quarter which just ended?

The answer is $1.20B

How much of that was a ONE-TIME warranty provision?

The answer is $1.06B

Meaning, how much was the routine operational loss?

The answer is $0.14B or $140 Million.

Which means that the division is on the verge of profitability. Indeed it will turn a profit in Q1 of this fiscal year. And a significant profit in Q2 which includes the run-up to Christmas.

You see my 14 year old friends, ONE-TIME provisions do not affect future operating results. There will be a profit turned in fiscal year 2008 which started July 1st and that is precisely why MS took the big bath late in the 4th Quarter of last year, which ended June 30th.

READING COMPREHENSION FTW

blackace

You have a link?

[QUOTE="musacircuit"][QUOTE="blackace"][QUOTE="musacircuit"]

So if 1 billion goes to repairs their is still a billion more.I guess MS should just quit this industry for good and i bet it'll happen sooner rather than later if this continues.

http://www.gamespot.com/news/6175367.html?om_act=convert&om_clk=newstop&tag=newstop;title;1

blackace

Sony lost 1 billion in the 1st quarter and will lose 2 billion in the 2nd quarter, so they should quit the industry as well, right? :roll: Please open you mouth a little wider when you speak.

You do know that M$ has like 10 times the amount of fund in their bank then Sony right. They can afford to lose money for 6 years, as they are making more profitwith their software division the Sony is with their electronics. Like I said. Open your mouth a little wider when you speak. M$ could buy Sony and clear their debt if they wanted to. M$ has already cleared up a lot of the debt they've had from the XBox. Why do you think their gaming division will be profitable in the 1st quarter of 2008? :roll: Sony's PS3 is actually hurting their electronics division more then the XBox is hurting M$ Software division.

Anyways you are so ignorant but i will still tell you that the ps3 is helping with blue ray sales and possibly bravia sales and these things dont show up in financial atatements.So no the ps3 is actually benefiting the electronics division of sony.

Read this.

http://www.theinquirer.net/default.aspx?article=40329

and this --->http://www.engadget.com/2007/06/13/microsoft-beefs-up-xbox-360-cooling-freaking-finally/

blackace

We will see, its certainly promising but it doesn't do anything for the rest of the people..and no, another warranty extension is not enough.

We will see, its certainly promising but it doesn't do anything for the rest of the people..and no, another warranty extension is not enough.

Runningflame570

Well, any failed Xbox 360s sent back to Microsoft will most assuredly get this new chipset installed in them. Hopefully that will make a big difference. Doesn't make sense for Microsoft to continue using the old, defective chipset that costs more to make.

[QUOTE="musacircuit"][QUOTE="baddog121390"]Didn't Sony loose a few billion earlier this year?baddog121390

Vista has no connection to the Xbox. The 360 has it's own division, so it doesn't matter if vista sold 20 trillion copies, the Xbox will not see any of that money.

[QUOTE="blackace"][QUOTE="musacircuit"][QUOTE="SUD123456"]

Maybe the TC and a bunch of you otherpeople should actually read the article and apply some basic reasoning skills.

How much did they lose in the 4th Quarter which just ended?

The answer is $1.20B

How much of that was a ONE-TIME warranty provision?

The answer is $1.06B

Meaning, how much was the routine operational loss?

The answer is $0.14B or $140 Million.

Which means that the division is on the verge of profitability. Indeed it will turn a profit in Q1 of this fiscal year. And a significant profit in Q2 which includes the run-up to Christmas.

You see my 14 year old friends, ONE-TIME provisions do not affect future operating results. There will be a profit turned in fiscal year 2008 which started July 1st and that is precisely why MS took the big bath late in the 4th Quarter of last year, which ended June 30th.

READING COMPREHENSION FTW

musacircuit

You have a link?

Taken from MS's 10-K filings 12:

2002 (first fiscal year for the Xbox): 1.13 billion

2003: 1.19 billion

2004: 1.33 billion

2005: .48 billion

2006: 1.26 billion

2007: 1.89 billion

Total: 7.28 billion in net losses.

[QUOTE="musacircuit"][QUOTE="blackace"][QUOTE="musacircuit"]

So if 1 billion goes to repairs their is still a billion more.I guess MS should just quit this industry for good and i bet it'll happen sooner rather than later if this continues.

http://www.gamespot.com/news/6175367.html?om_act=convert&om_clk=newstop&tag=newstop;title;1

blackace

Sony lost 1 billion in the 1st quarter and will lose 2 billion in the 2nd quarter, so they should quit the industry as well, right? :roll: Please open you mouth a little wider when you speak.

You do know that M$ has like 10 times the amount of fund in their bank then Sony right. They can afford to lose money for 6 years, as they are making more profitwith their software division the Sony is with their electronics. Like I said. Open your mouth a little wider when you speak. M$ could buy Sony and clear their debt if they wanted to. M$ has already cleared up a lot of the debt they've had from the XBox. Why do you think their gaming division will be profitable in the 1st quarter of 2008? :roll: Sony's PS3 is actually hurting their electronics division more then the XBox is hurting M$ Software division.

That post is so full of fluff it's not funny. First off Sony has been making money and Still makes money off of the PS2. It has only lost money in all the other divisions. PS3 has only lost it the expected cost of R&D and console saes since they are selling it at a loss anyway. So Microsoft is actually taking more of a hit than Sony is. Also Microsoft might have more money in thier bank account than Sony But it is no where near enuph to buy sony. Sony is a much larger company than you think. It is not just the playstation brand or the T.V.s they make. If Microsoft tried to buy them it would put them in such a world of hurt and spread them so thin if it didn't bankrupt them first. So now Microsft was going to Actually make a profit on the Xbox360 but then they had to extend the warrenty and also put 1.1 billion dollars into repairing consoles. So by 2008 that large profit could end up being nothing. And You know why Moore left? It is because he knows he created another sinking ship in the Xbox360. Microsoft might have asked him to clean up his mess or find another job. His mess might be a little difficult to clean up. Good luck to the next guy.

And MS pulled in nearly 15 billion in net profit for the year, which is a 15% increase from last year. Yes MS is hurting, LOL!!! :lol:eastside49er

Im fairly sure Microsoft said way back in 2001.. they wouldn't be making money until 2008.. and guess what.. it still isn't 2008 yet.

(Or was it they said it would take a long time and more recently named 2008?)

Sony loses 18 billion on the ps3Killermonkey915

1.8 not 18 geez man

Most consoles do lose money their first couple years. Production costs get cheaper as time goes on. Plus Halo 3 alone will be a billion dollar franchise.rexoverbey

The strategy is called loss-leader: a product is sold initially at a loss to penetrate a market and profits are either made A. at a later point in time and/or B. in other areas. The Xbox is a loss-looser, it is sold at a loss and profits have never been made.

Even a billion dollar franchise isn't enough to erase the debt that the Xbox is accruing.

Im fairly sure Microsoft said way back in 2001.. they wouldn't be making money until 2008.. and guess what.. it still isn't 2008 yet.

(Or was it they said it would take a long time and more recently named 2008?)

user_nat

No. MS expected the Xbox 1 to be profitable within two years, that obviously never happened. The date for profitability keeps getting pushed back further and further.

Ms has yet to even recover the massive loss fron the original xbox and now the 360 has lost them 2 billion for defective consoles wow just wow only ms can bleed like this and not die !!

I am sure if by 2008/9 and still no profit even ms might have to pull out or make a wii type console.

[QUOTE="mazdaspeed-rx8"][QUOTE="Killermonkey915"]Sony loses 18 billion on the ps3Killermonkey915

understanding sarcasm is not your specialty my friend ;)

Sony has been losing like $250 or more since the ps3 was released and will continue to lose money on it for a while, i wonder what that amounts to?

Actually, that's not true. Sony is close to, if not already, in the grey (or black?) right now with the PS3. N'Gai (the Level Up blogger) said this in the last 1up Yours Podcast. Things are looking good for them.

lol, nintendo the only ones who realise this is a business .. it's about making money!

$2 billion is too much to lose, even for M$ .. if they don't make money this gen, do you think they'll make a 3rd console next gen?

lol, nintendo the only ones who realise this is a business .. it's about making money!

$2 billion is too much to lose, even for M$ .. if they don't make money this gen, do you think they'll make a 3rd console next gen?

akif22

[QUOTE="baddog121390"]Didn't Sony loose a few billion earlier this year?musacircuit

Lmao, True

Who ever want the xbox360 to fail is not a real gamer. You may not like Microsoft but as a gamer you have to respect the great things the xbox and the xbox360 have brought to gaming in general. Its like the Dreamcast everyone on the Nintendo side wanted Dreamcast to tank and when it did everyone lost in the end. I don't want to see any console fail Ps3 xbox360 or the wii because if the lose we all lose.thermovie644064

Funny you mention the dreamcast didn't Peter Moore get fired/quit before the dreamcast tanked like he did with the 360 Deja vu ??

A few hardware problems for the 360 but overall it's a great console. Once the 65nm chipset is in the 360 it's going to be so much better. Second over 7 million people on XBL and I bet over half are gold subscribers. This holiday season is going to be great for MS.

PS3_3DO

Are you payed by MS or increadably fanboyistic?

[QUOTE="Killermonkey915"]Sony loses 18 billion on the ps3mgsbethatgame

you know thats a lie 1 billion thank look micro beat sony at losing money

Is English not your mother tongue?

[QUOTE="thermovie644064"]Who ever want the xbox360 to fail is not a real gamer. You may not like Microsoft but as a gamer you have to respect the great things the xbox and the xbox360 have brought to gaming in general. Its like the Dreamcast everyone on the Nintendo side wanted Dreamcast to tank and when it did everyone lost in the end. I don't want to see any console fail Ps3 xbox360 or the wii because if the lose we all lose.BrooklynBomber

Funny you mention the dreamcast didn't Peter Moore get fired/quit before the dreamcast tanked like he did with the 360 Deja vu ??

Now if EA was to suddenly fail i'd really laugh.

Correct me if I'm wrong but, didn't MS sell 40 million copies of Vista already? And what makes you think that Sony will be turning a profit with their console anytime soon?baddog121390

Their software division is not their gaming division. If Microsoft continues to lose money solely because of one division, it's a simple matter of downsizing the hemmorage.

Sony is still profitting on PS2 even if their PS3 profit will be a year and a half down the road.

[QUOTE="baddog121390"]Didn't Sony loose a few billion earlier this year?musacircuit

just every year the ps3 has been out ;)

[QUOTE="baddog121390"]Correct me if I'm wrong but, didn't MS sell 40 million copies of Vista already? And what makes you think that Sony will be turning a profit with their console anytime soon?Pariah_001

Their software division is not their gaming division. If Microsoft continues to lose money solely because of one division, it's a simple matter of downsizing the hemmorage.

Sony is still profitting on PS2 even if their PS3 profit will be a year and a half down the road.

[QUOTE="baddog121390"]Correct me if I'm wrong but, didn't MS sell 40 million copies of Vista already? And what makes you think that Sony will be turning a profit with their console anytime soon?Pariah_001

Their software division is not their gaming division. If Microsoft continues to lose money solely because of one division, it's a simple matter of downsizing the hemmorage.

Sony is still profitting on PS2 even if their PS3 profit will be a year and a half down the road.

the profit from the ps2 was included and wasn't even to keep the game division from taking huge losses.

neither company is doing well in their gaming divisions this gen.