Xbox Sees Earnings Lag, Stronger Sales

Thanks to GameSpot for its article discussing the Xbox-related financial results from Microsoft's Q4/annual 2004 earnings, released yesterday. The article notes: "The Home and Entertainment Group, which includes the Xbox division, had a $339 million operating loss for the quarter on revenue of $499 million and anemic revenue growth of 3 percent - the lowest growth rate of any of Microsoft's seven business segments. Though Microsoft doesn't break out separate results for the Xbox, it's pretty clear that the console business is still a strategic investment, not a profit center." However, it's not all bad news, since "Xbox shipments increased 27 percent over the same period a year ago. Microsoft reports 15.5 million units sold worldwide through the end of June: 1.5 million in Asia Pacific, 3.9 million in Europe, and 10.1 million in North America. The company also quoted industry research group NPD's claim that Xbox has a 33 percent market share in the US, with 50 percent growth in software sales over Q4 last year." Does this bode well for the apparent 2005 launch of Xbox 2?

Comments

My take on how Xbox2 will do

[Lovedumplingx]

I think it really all depends on what specs the Xbox2 has. If the Xbox2 won't play first gen games then I think this buying trend (which appears to be people have waited a while to buy) will not be good for the Xbox2 release because all the games bought in December of 2004 and January 2005 (like Jade Empire and Halo 2) will then be useless. And even though Penny-Arcade and the like will own every console known to man normal people like myself (who just purchased an Xbox a few months ago) will wait a few years to purchase a new system. I think this will lead to poor sales for the Xbox2 unless the Xbox1 games will work with the Xbox2 and then maybe I could pay ~$150 (after selling the Xbox for $50) for a new console and I wouldn't have to buy any games right away.