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Rare Spike in Microsoft Console Profits
PLMIV writes "Microsoft said the company's home and entertainment division, which includes games and the Xbox video game console system, posted its first profitable quarter on sales of its hit game Halo 2. But the company said the division probably would be back in the red for the rest of the fiscal year and would not achieve sustained profitability until sometime in fiscal 2007."
What are the legal ways for companies to conveniently shuffle money around so the overall numbers are the same but make certain things look more profitable? They could be throwing a bone to XBox supporters while nothing has really changed.
-- Microsoft is the most expensive commodity operating system and office suite vendor in the marketplace.
Are people still telling themselves that they are sticking it to Microsoft by buying an Xbox? Microsoft is making money on every unit sold now. Not that I am against Microsoft making money on a console, it just seems these people are lying to themselves. It doesn't bother me if you want a Xbox but stop lying to yourself that you aren't supporting Microsoft.
I stick it to Microsoft by not buying their products.
Bungie made Halo 2 and therefore is responsible for this spike. The Rare spike will occur when the new Conker game is released.
The only thing I hate more than hypocrites are people who hate hypocrites.
what if i bought an xbox when they were still losing money on everyone they sold, and have used it for XBMC and emulators ever since? Can i still take the moral high ground?
"all through my house i set up traps, it seems like the rats have a map, so now i feed the rats crack" - Donald D
You could...but from up there hopefully you will be able to see you still supported MS by doing that. If the xbox cost MS $249 to make and you paid $199 for it then instead of MS losing $249 they now only lost $50 which they seem to be making up on the sales of Halo2 (probably the plan all along).
You are still contributing to their bottom line.
What about the copy of Halo2 your bought? Do you really have zero games??
Of course you can still take the "moral high ground" from pirating games...
moron.
Really? That is a novel approah for boycotting that I have not considered. I have been protesting Beijing's policies by buying as many Chinese-made consumer goods as possible. But after reading your message, I will reconsider this approach. I also wonder if "sticking it to the Republicans" by voting for George W. Bush was a good idea either.
Don't blame Durga. I voted for Centauri.
What, you say? "Zero Wing" are only zero game belong to us.
Don't blame Durga. I voted for Centauri.
I'm just wondering... does this $249 indicate actual per unit incremental costs, or does it also include some fixed costs (research, costs of running factory, etc?)
If the price is purely the incremental cost, then you would indeed be screwing Microsoft buy buying an Xbox. However if the price includes a portion of the fixed costs, then buying an Xbox is simply helping them to recoup their investment.
I'll never make that mistake again, reading the experts' opinions. - Feynman
ok i admit it i have bought the odd game, ghost recon 2 being the latest. Halo 2 never floated my boat, its lack of bots really pissed me off. i don't look after the xbox any more and have lent it to my impoverished teacher friend, I mainly used it as an all in one media centre for my music and dvds, and playing a host of old games of which i own at least one copy, the wires under my tv were getting way to much to have all those consoles and controllers hanging around. More of a theoretical question really :)
"all through my house i set up traps, it seems like the rats have a map, so now i feed the rats crack" - Donald D
I did you one better... I bought a refurbished, modded XBox, and I never buy games. I rip them straight to the upgraded hard drive.
Granted I vicariously contributed to Blockbuster's demand for MS xbox games by renting from them... but I'm pretty happy that my contribution was small.
Source
"As a result of the sales forecast revision, the company also revised its financial forecasts downward for the year to the end of March. Nintendo said it expects consolidated net sales to be YEN 520 billion (US$5 billion), a drop from the previously forecast YEN 540 billion, while net income is now forecast to be YEN 70 billion, a drop from the prior forecast of YEN 90 billion. Despite the revisions, consolidated net sales and net income are still expected to grow by 1 percent and 111 percent respectively for the year."
Still very good. But slowly the tide is changing...
If you thought that you were screwing with Microsoft because they sold the XBox at a loss, you're wrong from the start. The logic behind selling at a loss is that, well, you sell a lot of them so the necessary goods that *DO* make cash for it (namely: software titles) sell well. And for every geek buying one to use it as a Linux server there are another 1000 geeks that buy one to play games ocasionally.
The more they sell, the more they earn. Simple math.
Certainly I understand the supposed Microsoft strategy: Be in the red as long as it takes to build up the brand, at which point it turns to gorgeous green. And certainly I understand that Microsoft has enough resources to maintain this for quite some time.
:P) it seems almost benevolent of Microsoft to continue in this fashion. How long are they going to be in the green just to regain lost sales afterall? I suppose it is true that Microsoft is a smart buisness, and thus all the dots must all connect somewhere to equal massive profits...
;)
But (and I am fully prepared to be modded down to oblivion for the following
I don't know. The XBox is a wonderful console, and by far the most mod-friendly. While certainly it can be said this was an accident (poor planning) and simply a result of M$ stick with what they know best (PCs).. But I have this nagging thought in the back of my head that perhaps there is some goodwilled tech team that planned for such an accessible box.
Furthermore XBox-Live is a real innovation in the console world, and I believe is the sole reason that online gaming has gained such momentum in that arena. Certainly Sony's online attempts are a response to this, and Nintendo is even starting to come around. It doesn't seem unfair to thank Microsoft for bringing popular online gaming to the console realm.
I think this generation, and perhaps next generation's, major console advances can largly be attributed to what is currently a 'gift' from the evil borg empire. Perhaps there is some benevolent midpoint manager in there that loves gamers more then the bottom line. *shrug* Maybe it is just an error in the borgs profit-processing AI?
--- "End Of Line" - MCP
Even if microsoft were losing money on that sale, they're still benefiting. More sales means much more reason to say that the system is appraoching profitability, meaning more string to draw in investors.
Yes, it's simple. The more games they sell, the more they earn. The more peripherals they sell, the more they earn. However, for every Xbox linux cluster, they lose some money. In the end... they come out in the red. Not because of the Linux users, but they make a contribution. Well, unless the whole thing is a lie and they make money on hardware now. Personally, I bought ONE new Xbox, and I'll probably buy a new Xbox 2, but I'll be buying used Xboxes for Linux, because I don't care if they've been banned from Live or whatever. I am working on sticking it to Microsoft every day, by badmouthing their products to everyone I possibly can. I firmly believe the world would be a better place without Microsoft - but I sure do love my hacked Xbox. Incidentally, I bought mine new because it came with the only two Xbox games I cared about at the time - Sega GT and JSRF. JSRF is somehow not as fun as Jet Grind Radio was on DC but that might just be because I'm burned out. Sega GT is everything I dreamed it would be, and then some. I haven't bought a single new game since the bundled ones. But, I bought the Advanced AV pack and the DVD kit so they probably made a bit on me. If everyone stopped buying everything from Microsoft except video games, maybe they'd just make games :P
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
I bought an Xbox..... .....
....
I am supporting microsoft......
so what
I'm the guy with the unpopular opinion
I bet you have a pirated copy of Windows XP too. You're a thief and a hypocrite.
The scariest quote buddy Bill has ever said was "Microsoft is a patient company"
The console market is a very important media market to control... The average game takes about 20 hours to complete, thats a long time to have someone's attention... compare that with the average 2 movie...
personally i've jumped all over the xbox, the amount of hardware you are getting for the price is unparalleled. microsoft is like the pusher... the first one is always free!
There's nothing wrong with that. There's something wrong with the morons who were buying Xboxes to "screw Microsoft."
Microsoft has deep enough pocket to lose money until 2007 so it can build long-term brands and profitibility. Xbox is a great machine. Even then, Microsoft has to project losing money for a long time before it would be able to capture enough market shares from an firmly established Sony and for Xbox to become profitable by itself. Imagine you are a new start-up that has created a brand new, cutting-edge gaming machine. You hawk around your design until . Your investors usually want to see profits in two or three years, MAX. If you are the most fortunate son of a b!tch in the entire human history, your investors will grudgingly support your money-losing venture for five years, absolutely no more than that. And for that generousity, you will have to promise back your wife and children, plus an arm and a leg. So there is absolutely no way you, as a small start-up, can lose money for seven or eight straight years just to build up a brand. That means you just can't compete with giant corporations like Microsoft or Sony in an established market like the console gaming industry, EVEN IF you have a great idea. You have to build a brand new market that does not exist before if you want to build a new empire . And that is why Linux and open source will never beat Microsoft, especially when no company is willing to lose money for a LONGtime to support them.