Microsoft's Xbox 360 division looses $31 million

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jakehouston88

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#1 jakehouston88
Member since 2009 • 2848 Posts

"After consecutive quarters posting a net profit, Microsoft's Entertainment and Devices segment returns to red ink despite 30% spike in hardware sales."

Just as the stock market fluctuates constantly in the weak economy, so too do companies find their financial fates wavering. Today Microsoft provided the latest evidence of this, releasing mixed results for its second fiscal quarter.

For the three months ended March 31, 2009, the software giant announced that company-wide revenues dipped 6 percent year-over-year to $13.65 billion, while operating income was actually up 3 percent to $4.44 billion.

The news was similarly scattered for Microsoft's Entertainment and Devices division, which includes the Xbox 360 business. Total revenues for the gaming segment were down less than 2 percent to $1.57 billion, and where the division posted an operating profit of $106 million during last year's second quarter, this year it ran a $31 million loss.

On the positive side, Xbox 360 sales picked up considerable momentum. Microsoft's console sold 1.7 million systems during the quarter, up nearly 30 percent from the same period last year. Microsoft also touted improving attach rates of games and accessories for the system, saying the average owner has 8.3 Xbox 360 games and 3.9 accessories, up from 7.5 games and 3.6 accessories at this time in 2008.

Link: http://www.gamespot.com/news/6208456.html?tag=latestheadlines;title;1

Thoughts?

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Luigi_The_Pimp

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#2 Luigi_The_Pimp
Member since 2009 • 310 Posts
sales are up , thats all that matter right now. profits will eventually come too
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Chaos_HL21

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#3 Chaos_HL21
Member since 2003 • 5288 Posts

Well a question is how much of that lost is due to the 360. MS' Entertainment and Devices division is not just the 360.

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Nero_Paladin

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#4 Nero_Paladin
Member since 2007 • 1099 Posts

Is it me or does this seem a bit strange.

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navyguy21

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#5 navyguy21
Member since 2003 • 17928 Posts

"After consecutive quarters posting a net profit, Microsoft's Entertainment and Devices segment returns to red ink despite 30% spike in hardware sales."

Just as the stock market fluctuates constantly in the weak economy, so too do companies find their financial fates wavering. Today Microsoft provided the latest evidence of this, releasing mixed results for its second fiscal quarter.

For the three months ended March 31, 2009, the software giant announced that company-wide revenues dipped 6 percent year-over-year to $13.65 billion, while operating income was actually up 3 percent to $4.44 billion.

The news was similarly scattered for Microsoft's Entertainment and Devices division, which includes the Xbox 360 business. Total revenues for the gaming segment were down less than 2 percent to $1.57 billion, and where the division posted an operating profit of $106 million during last year's second quarter, this year it ran a $31 million loss.

On the positive side, Xbox 360 sales picked up considerable momentum. Microsoft's console sold 1.7 million systems during the quarter, up nearly 30 percent from the same period last year. Microsoft also touted improving attach rates of games and accessories for the system, saying the average owner has 8.3 Xbox 360 games and 3.9 accessories, up from 7.5 games and 3.6 accessories at this time in 2008.

Link: http://www.gamespot.com/news/6208456.html?tag=latestheadlines;title;1

Thoughts?

jakehouston88

i think they will take that hit this quarter :P

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TBoogy

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#6 TBoogy
Member since 2007 • 4382 Posts

Is it me or does this seem a bit strange.

Nero_Paladin

It's really not.

Even though sales are up, the dollar is weaker. Also, the Zune HD is getting closer to release.

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navyguy21

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#7 navyguy21
Member since 2003 • 17928 Posts

Well a question is how much of that lost is due to the 360. MS' Entertainment and Devices division is not just the 360.

Chaos_HL21
Microsoft as a whole is up 3% to 4.44Billion this quarter.
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mattacular

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#8 mattacular
Member since 2007 • 363 Posts
[QUOTE="TBoogy"]

[QUOTE="Nero_Paladin"]

Is it me or does this seem a bit strange.

It's really not.

Even though sales are up, the dollar is weaker. Also, the Zune HD is getting closer to release.

bingo they have probably poured a lot of money into developing the new Zune.
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Lem-Risen

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#9 Lem-Risen
Member since 2009 • 152 Posts
MS on the company whole made 2.98 Billion in profit this quarter. So the 31 million isnt a problem. Id also like to point out that the 360 isnt solely what makes up the division.............just like Sonys quarter reports factor in the PSP/PS2/PS3 together.
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Lem-Risen

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#10 Lem-Risen
Member since 2009 • 152 Posts
Either way, this is overall great news to the MS fanboys. - They made enough profit selling OS's to offset this loss. (MS made 3 billion profit on the whole this quarter) - They probably sold more 360s then PS3s this quarter, which is good too. Good news all around
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Nomad0404

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#11 Nomad0404
Member since 2004 • 1111 Posts

How much did they spend on the GTAIV DLC?

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EmperorSupreme

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#12 EmperorSupreme
Member since 2006 • 7686 Posts
[QUOTE="Lem-Risen"]Either way, this is overall great news to the MS fanboys. - They made enough profit selling OS's to offset this loss. (MS made 3 billion profit on the whole this quarter) - They probably sold more 360s then PS3s this quarter, which is good too. Good news all around

Either way that's $31 million dollars more they would've had. I'm actually surprised because last year 360 was making money. I'm sure these losses are big reasons why MS is cutting their internal development of games. It's not great news for MS fanboys. It's also the argument that lemmings use as to why the 360 will last longer than the original Xbox because it was profitable. Personally seems like a mixed report, sales up, but negative profits, that's not a problem short term, but can be if it continues.
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cainetao11

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#13 cainetao11
Member since 2006 • 38071 Posts
[QUOTE="Lem-Risen"]Either way, this is overall great news to the MS fanboys. - They made enough profit selling OS's to offset this loss. (MS made 3 billion profit on the whole this quarter) - They probably sold more 360s then PS3s this quarter, which is good too. Good news all aroundEmperorSupreme
Either way that's $31 million dollars more they would've had. I'm actually surprised because last year 360 was making money. I'm sure these losses are big reasons why MS is cutting their internal development of games. It's not great news for MS fanboys. It's also the argument that lemmings use as to why the 360 will last longer than the original Xbox because it was profitable. Personally seems like a mixed report, sales up, but negative profits, that's not a problem short term, but can be if it continues.

Yes but profits could be down due to internal spending, like the aforementioned Zune HD. The bottom line is if you see your product selling more, are you going to stop at it now?
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f50p90

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#15 f50p90
Member since 2008 • 3767 Posts

To be fair, they rake in about a billion in XBL. Is that included?

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slowpokesryou

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#16 slowpokesryou
Member since 2009 • 25 Posts
portbox 360! lol
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_SWAG_

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#17 _SWAG_
Member since 2009 • 2674 Posts
even tho a cool $30 mil is nothing when theyre selling the way theyre selling it makes you wonder if the second place console lose this much how much worse is the last place console loss are
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Lem-Risen

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#18 Lem-Risen
Member since 2009 • 152 Posts
portbox 360! lolslowpokesryou
right.......when its the PS3 getting all the late 360 ports.
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rybe1025

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#19 rybe1025
Member since 2004 • 6362 Posts
Says in a few spots in that article how the 360 has increased in sales and what not. There is more to that division then just the 360.
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EmperorSupreme

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#20 EmperorSupreme
Member since 2006 • 7686 Posts
Says in a few spots in that article how the 360 has increased in sales and what not. There is more to that division then just the 360.rybe1025
I'm pretty sure 360 is the big one. They wouldn't be cutting all their gaming studios if 360 was making tons of money. I'm guessing they are losing money on the defects and repair issues on 360 and because of the Arcade sku.
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obamanian

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#21 obamanian
Member since 2008 • 3351 Posts

Well a question is how much of that lost is due to the 360. MS' Entertainment and Devices division is not just the 360.

Chaos_HL21

So, the title is misleading ?

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#22 Ambli
Member since 2009 • 554 Posts

If I were them, I'd blame Rare games.

Not saying they're bad, they just don't sell well.

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Thebettertwin

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#23 Thebettertwin
Member since 2005 • 1051 Posts

ill spell it out for all the dummies in the thread
ZUNE HD ZUNE HD ZUNE HD ZUNE HD

MS entertainment division has been spending big time on this baby

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navyguy21

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#24 navyguy21
Member since 2003 • 17928 Posts

ill spell it out for all the dummies in the thread
ZUNE HD ZUNE HD ZUNE HD ZUNE HD

MS entertainment division has been spending big time on this baby

Thebettertwin

Im sure they know that lol, cows just wanna rub it in lol, lets see the damage control when the Sony numbers are posted though, and i can guarantee it will be more than 31m ;)

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Lem-Risen

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#25 Lem-Risen
Member since 2009 • 152 Posts

[QUOTE="Chaos_HL21"]

Well a question is how much of that lost is due to the 360. MS' Entertainment and Devices division is not just the 360.

obamanian

So, the title is misleading ?

Its just like Sonys. If they post a profit many assume that its the PS3...................when in reality the PS3 posts red ink and its the PSP/PS2 that bring Sony into the black.