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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."

15 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.

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    1. 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.

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  4. Misleading headline by ThisIsForReal · · Score: 5, Informative

    ...except for game division?

    FTA: 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.

    Grrr, the headline made it sound like revenue for the game division was down, but it was up, too. Please keep the headlines accurate for those of us who don't want to read the synopsis, let alone the actual article!

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    -THE END-
    1. Re:Misleading headline by MBraynard · · Score: 3, Informative
      Actually the headline was accurate this time. The division of Microsoft that includes its games lost almost $300M in the last quarter.

      Actually, the headline is inaccurate. The games division revenue IS up. And the amount of money 'lost' is irrelevant to revenue.

      REAL journalists make these mistakes regularly - Slashdot makes these mistakes contantly as it is run by individuals who are ignorant of all matters not related to hentia and linux.

  5. Typical by truthsearch · · Score: 2, Funny

    So you don't want to read the synopsis... or the actual articles... but you're quick to post a comment.

    Typical Slashdot. :)

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  6. 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

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  7. In other words.. by Mr_Tulip · · Score: 3, Informative

    TO put it more simply, Microsoft's total income from games, XBOX and, Home PC is higher by around $190 million, and profit is down by about $230 million from last year. That's only around a $40 million net difference from last year, and I expect a lot of that is the cost of launching a new console.

    1. Re:In other words.. by Anonymous Coward · · Score: 3, Informative

      TO put it more simply, Microsoft's total income from games, XBOX and, Home PC is higher by around $190 million, and profit is down by about $230 million from last year. That's only around a $40 million net difference from last year, and I expect a lot of that is the cost of launching a new console.

      You must be using the new math. Revenue has increased by about $190M, while profit is down around $230M. You can't subtract these numbers. Indeed, if you add them, you see that their expenses increased by $420M.

    2. Re:In other words.. by moosesocks · · Score: 2, Informative

      and I expect a lot of that is the cost of launching a new console.

      I expect that a lot of that is the cost of launching a new console unsuccessfully.

      The demand for the 360 seems tiny compared to the demand for the original xbox not to mention all the wasted money on the hype microsoft built up for the 360 which was completely destroyed by the fact that there wasn't enough of them to supply what little demand they did have.

      The dreamcast had a more successful launch than the 360. I have a pretty good feeling that the 360 is going to be the Sega Saturn of this generation of consoles (which as a whole I also think will fizzle compared to the last. My money's on the Nintendo Revolution for being the most likely to succeed this time around unless Microsoft scrapes Halo 3 together quickly (the brand loyalty gamers have to halo is astonishing. halo 3 could be complete crap, and it would sell millions of copies in the first week)

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  8. Small? by suricatta · · Score: 3, Funny

    "...a small profit of $55 million..."

    Maybe I'll go work for the Microsoft Games Division and ask for a small salary :)

  9. Home & Entertainment Division by R3d+M3rcury · · Score: 2, Informative
    "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 [...]"

    ...and the Macintosh Business Unit.

  10. Hurry, before the price goes down by Animats · · Score: 2, Informative
    I don't feel sorry for those shmucks who somehow sold them at a loss (they should learn to use the reserve price feature).

    If you watch the XBox 360 core system auctions on eBay, anything priced over $350 just does not sell. The auctions with high reserves just scroll off, unsold. You can usually get $300, and you might be able to get $325. Above that, forget it. If you've got a garage full of the things, it's time to take what you can get.

  11. 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.