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Xbox Division Slips Back into Loss

Posted by Zonk on from the you-can't-win-em-all dept.

Despite general news that Microsoft's revenues were up last quarter, the Xbox division slipped back into the red with a $164 million operating loss. From the article: "The operating loss in the division also dropped year on year, falling to $164 million from $204 million, which could be seen as very positive - but can equally be interpreted in light of the fact that the previous quarter, ended on December 31st, saw the division post its first quarterly profit since the launch of Xbox."

9 of 69 comments (clear)

  1. Here's what I think by Will2k_is_here · · Score: 4, Interesting

    Recent sales are low because everyone is anticipating XBOX2. Why not?

    1. Re:Here's what I think by Rayonic · · Score: 4, Informative
      "Recent sales are low because everyone is anticipating XBOX2. Why not?"

      Because people play games and not machines?


      Tell that to the Sega Dreamcast.
      --
      [PowerPoint] is a tool for capitalist presentation
    2. Re:Here's what I think by shadowzero313 · · Score: 5, Insightful

      I'd say it's because the only killer app for xbox in the last year or so has come and gone. If people wanted to get halo 2, they would have within a month of it launching. Those who didn't buy at launch were either convinced for it or against it relatively soon after, so now halo 2 is the same as most games for sales. Now that the big event has passed, the market for xbox games is settling back down into it's old behavior.

    3. Re:Here's what I think by ZephyrXero · · Score: 4, Interesting

      There are two reasons why Dreamcast "failed". They didn't have a DVD player and PS2 did (the first year of PS2 sales in japan were almost exclusively for the dvd functionality and not the games). The other, main reason it's no longer with us is the Saturn. The Saturn was such a horrible failure that it put Sega billions of yen in the hole. The Dreamcast would have had to be extremely popular to pull them out, but it didn't take off quite as fast as they hoped/needed. Since you usually don't take a loss on software, it was only natural for them to switch to a software only company. If it weren't for the Saturn, we'd probably still be playing new DC games and hearing rumors about its successor coming out this fall :(

      --
      "A truly wise man realizes he knows nothing."
  2. The console wars continue by SpartanVII · · Score: 4, Insightful

    I guess they have priced themselves out of any profits. I bought my XBOX for $300 back in November '01 when it was first launched. At that time, those $300 got you the console and one controller. These days (last time I checked), for $150, you can get an XBOX, two controllers, and one or two games. The console wars have driven down the price from what used to be an arm and a leg to something much more affordable in an attempt to sell more and more units.

    1. Re:The console wars continue by StocDred · · Score: 4, Informative
      If you're impressed by paying only $150 for all of that, imagine what $50 can get you in Sega Genesis equipment!

      Xbox has been a financial struggle for Microsoft since Day One. The $150 bundles are SOP for all the consoles once we get a few years into every generation.

  3. Halo 2 by skyman8081 · · Score: 4, Insightful

    Sales are low because everybody already bought Halo 2.

    But not everybody's buying Turf and the other new map for said game.

    --
    Two Roommates and a Boyfriend, updates Monday, Wednesday, and Friday
  4. Somebody doesn't understand seasonality... by ComputerSlicer23 · · Score: 4, Insightful
    but can equally be interpreted in light of the fact that the previous quarter, ended on December 31st

    Okay, let me explain this to you. Christmas is the biggest, baddest ass time of year when it comes to retail business. I want to say like 35% of all retail business takes place in the month of December.

    Game publishers try to get their best games out around Christmas seaons, because they know it's a great way to have a block buster game.

    If X-Box has equalled the quarter that had Christmas during any quarter that doesn't have Christmas in it. Either they did something incredibly wrong during Christmas, or they did something incredibly right during the non-Christmas quarter.

    There's a reason they seasonally adjust all retail numbers when doing economic analysis. It's because not all quarters are equal.

    Kirby

  5. Pressure by warmgun · · Score: 5, Insightful
    From what I understand, Microsoft's plan was to take a hit with Xbox so they could get a user base and then recoup their losses with a profitable Xbox 2 (360?). So this puts a lot of pressure on their next console. If it tanks, remains #2 or #3, or just has a lukewarm response (which is likely), I don't see why Microsoft would stay in for another generation.

    PS I thought the Xbox was supposed to be the key to Bill's wet dream, convergence. What ever happened with that?