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Microsoft's Revenues Up Except for Games Division

Posted by Zonk on from the taking-a-loss-on-the-360 dept.

Gamasutra reports on Microsoft's announcement that their revenues are up, but the games division has seen a sharp decrease in profitability. From the article: "Microsoft's Home and Entertainment division, which overall includes the Microsoft Xbox video game console system, PC games, the Home Products Division, and TV platform products for the interactive television industry, saw revenue of $1.56 billion in the 3 months to the end of December and a significant loss of $293 million, compared to $1.37 billion revenues and a small profit of $55 million in the same period last year."

8 of 68 comments (clear)

  1. XBOX 360 by pvt_medic · · Score: 2, Insightful

    They report though that the XBOX 360 is a large part of their increased revenue. MSNBC Article Now this doesnt make sense one bit since they lowered the prediction on unit sales for 360 and they loose over $100 per unit. I am slightly confused by their numbers.

    --
    30% Troll, 50% Underrated, 10% Interesting
    Score:5, Troll
    1. Re:XBOX 360 by Anonymous Coward · · Score: 1, Insightful

      revenue is money in. They don't lose revenue on the 360 even if they do make a net loss from it.

    2. Re:XBOX 360 by Keeper · · Score: 4, Insightful

      Incorrect.

      Revenue == total money in (money made from selling stuff)
      Expenses == total money out (money spent building stuff)
      Net income == revenue - expenses

  2. That's what you get... by nenya · · Score: 2, Insightful

    ...when you sell your next-gen, multi-million-shipping unit at a loss.

  3. I like xbox by trolleymusic · · Score: 3, Insightful

    It's sorta funny, the only Microsoft product I like is xbox and that seems to be the one they're always having financial trouble with.

    I'm now a happy apple user, I don't have to deal with windows anymore, but I still have to use the horrible MS Office for Mac so that my windows-based colleagues and I can exchange work.

    Unline the other MS products I've used, i've always found the xbox experience to be easy and user-friendly.

    --
    "damnit, trolley I want in your signature." - Elburrito
  4. In other words, the XBox 360 plant was expensive. by Thag · · Score: 4, Insightful

    I'm guessing that's what we're seeing: the startup costs for the Xbox 360 and its launch publicity. So even though revenues were up, the increased operations costs turned it into a net loss, for now at least.

    I would expect the 360 to be profitable for them in the long run, though.

    Jon Acheson

    --
    All opinions expressed herein are my own, and not those of my employers, who are appalled.
  5. XBox 360 not selling at $299. Price cut needed. by Animats · · Score: 1, Insightful
    The XBox 360 just isn't selling. Maybe they're hard to find at retail, but there are thousands available on eBay. An unopened core system just sold for $255, well below the $299 list price. The speculators who bought at the launch are getting killed.

    Microsoft will probably have to relaunch the product at a lower price point, and lose even more money per unit.

    How much longer will Microsoft's stockholders put up with this money drain? Microsoft lost money on every original XBox, so, hoping to make some money in round two, they increased the price for the XBox 360. But the customers aren't buying.

  6. Re:In other words, the XBox 360 plant was expensiv by Yahweh+Doesn't+Exist · · Score: 2, Insightful

    >I would expect the 360 to be profitable for them in the long run, though.

    you're very optimistic.

    even the MS Xbox team doesn't expect the 360 to be profitable, and they don't expect the Xbox line to become profitable overall for 5-10 years.