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[Road]

Operating income are the earnings before taxes and therefore the middle line. Nintendo always lists all three of them, but I'm not sure how Sony handles that.

Probably, because Microsoft and Sony (unlike Nintendo) have many divisions, they only show the taxes' effect to the overall results instead of each and every division.

I don't know if there's a legal/economical reason for doing that, but I guess it boils down to the fact shareholders will get their share of the profits from the overall results and not by division. =P

 

[Becky]

Wonder how much of a lose the division has taken on the WP7 launch. If any.

Will be interesting to see if they can keep the growth going for this calendar year.

Profit for the division even after spending $500 Million on ads for Kinect and $500 Million on ads for WP7.

 

[ccbfan]

Too bad they'll never show just Xbox earnings.

Its has to be pretty high considering its doing a fantastic job propping up the rest of the division which are pretty much all losers.

 

[FrankT]

Putting things into perspective they did shy of a million more in actual sales versus 2008 in the US for the quarter yet only 300k more in shipments. They likely could have done 7 plus if they had the stock.

Too bad they'll never show just Xbox earnings.

Its has to be pretty high considering its doing a fantastic job propping up the rest of the division which are pretty much all losers.

Some of the language that came out of MS for last quarter clearly implied it was the super majority of the revenue.

$1.65B versus $1.8B iirc. The Xbox division pretty much hid a great deal of the Kin losses that is for sure.

 

[bigtroyjon]

Probably, because Microsoft and Sony (unlike Nintendo) have many divisions, they only show the taxes' effect to the overall results instead of each and every division.

I don't know if there's a legal/economical reason for doing that, but I guess it boils down to the fact shareholders will get their share of the profits from the overall results and not by division. =P

Shareholders don't get a share of the profits aside from dividends which if a company even has one are generally based on cash on hand and not directly related to the current quarters profits.

Companies pay taxes as a whole, they aren't going to pay taxes on income from one division while another division causes the entire companies quarter to be in the red.

 

[Raistlin]

Good. Hopefully this means 360 and PS3 stick around for quite a while.

 

[Road]

Shareholders don't get a share of the profits aside from dividends which if a company even has one are generally based on cash on hand and not directly related to the current quarters profits.

Companies pay taxes as a whole, they aren't going to pay taxes on income from one division while another division causes the entire companies quarter to be in the red.

Thanks for the correction.

 

[Why For?]

Matrick should continue the profit making with smart decisions for the next Xbox.

For example, make the next Xbox nothing more than a 'specced up' Xbox 360.

- Profitable from day one
- Cheap at launch so it gets into more hands
- Devs development costs won't rise, which will make third parties happy and keep them on board
- Full BC which keeps 360 and Arcade games selling

 

[AdventureRacing]

Putting things into perspective they did shy of a million more in actual sales versus 2008 in the US for the quarter yet only 300k more in shipments. They likely could have done 7 plus if they had the stock.

If this is true wouldn't that mean we would see higher shipment numbers in the next quarter to compensate?

Great year for Microsoft, but this year... I wonder...

Few exclusives, and new consoles from the competition.

Well for a start they still have the momentum from kinect and a potential price drop if they need it. What exactly are nintendo or more importantly sony going to release which will stop MS's momentum going forward? They will also still have some exclusives (gears 3 is a huge game and at the very least they will have kinect exclusives which is what is pushing sales right now).

I also don't think the release of 2 new handhelds should affect the 360 to much. Sure they compete somewhat with the home consoles but outside of Japan i don't think this is a big a issue.

I think they will sell more next year by a decent amount. Do sony and nintendo have anything up their sleeves to achieve the same?

 

[szaromir]

Matrick should continue the profit making with smart decisions for the next Xbox.

For example, make the next Xbox nothing more than a 'specced up' Xbox 360.

- Profitable from day one
- Cheap at launch so it gets into more hands
- Devs development costs won't rise, which will make third parties happy and keep them on board
- Full BC which keeps 360 and Arcade games selling

They won't do that, they have a new system in order to keep up with advancements in the consumer electronics space (1080p, 3D etc) as well as have a lot more room for Live functionality. I think the slow expansion of Live features is caused by the hardware bottleck, 32MB and very little CPU cycles (when in game) is very little to work with.

 

[LQX]

Consumers?


This is true.

Doesn't the retailers then sell it to consumers? In the end it doesn't matter.

 

[Why For?]

They won't do that, they have a new system in order to keep up with advancements in the consumer electronics space (1080p, 3D etc) as well as have a lot more room for Live functionality. I think the slow expansion of Live features is caused by the hardware bottleck, 32MB and very little CPU cycles (when in game) is very little to work with.

But like I said, surely a specced up version of the existing architecture would still be more than enough to cope.

Give it a Blu-ray drive, USB 3.0 (4?) ports, etc and you're good to go.

 

[szaromir]

But like I said, surely a specced up version of the existing architecture would still be more than enough to cope.

Give it a Blu-ray drive, USB 3.0 (4?) ports, etc and you're good to go.

It's better to put entirely new processors when the old ones are so obsolete.

 

[Mindlog]

Matrick should continue the profit making with smart decisions for the next Xbox.

For example, make the next Xbox nothing more than a 'specced up' Xbox 360.

- Profitable from day one
- Cheap at launch so it gets into more hands
- Devs development costs won't rise, which will make third parties happy and keep them on board
- Full BC which keeps 360 and Arcade games selling

I won't speculate on specifics, but I'm also fairly confident that MS won't be as big on loss leading when the next gen starts.

However, if they do look down that path Gold subscriptions appear to be an excellent early hardware subsidy. I wonder how tempting the hardware race still is.

 

[FrankT]

If this is true wouldn't that mean we would see higher shipment numbers in the next quarter to compensate?

Higher shipments compared to last year for the quarter? For sure, as long as they get the supply side worked out in the 30-60 days they estimated.

 

[duk]

Nice freaking job MS. Imagine if they were not supply constrained, prob could have sold 300-500k more units of the 360. But they need to work out the supply chain issue.

 

[GavinGT]

Assuming similar sales related seasonal adjustments to the 360, I'd be surprised to see Kinect doing any more than 2m for the next quarter.

I doubt it. Those would be pre-Christmas channel stuffing numbers, and we know there was no channel stuffing.

Kinect's momentum isn't going to suddenly end. I'm still seeing Kinect "infomercials" on daytime TV shows, and casuals will keep buying it despite the lack of new software. I bet they sell at least 3 million in Q3, and 7 million between here and the end of October.

Nice freaking job MS. Imagine if they were not supply constrained, prob could have sold 300-500k more units of the 360. But they need to work out the supply chain issue.

I don't think it will be a problem any more. 360's best quarter ever has already passed. No need to go build more factories if they're never going to hit those numbers again.

 

[Synth_floyd]

Next Xbox needs:

MORE POWER
Blu-ray
Backwards compatable with Xbox 360 and Arcade games

and

FIX THE D-PAD
put a rechargable battery in the controller like the PS3

 

[Sohter.Nura]

Next Xbox needs:

MORE POWER
Blu-ray
Backwards compatable with Xbox 360 and Arcade games

and

FIX THE D-PAD
put a rechargable battery in the controller like the PS3

Lol, you think that's all it needs?

The XBOX360 needed Kinect and a remodel to sell what it sold this past year - a new system with just better graphics and a better controller will absolutely not cut it.

 

[Psychotext]

I doubt it. Those would be pre-Christmas channel stuffing numbers, and we know there was no channel stuffing.

Kinect's momentum isn't going to suddenly end. I'm still seeing Kinect "infomercials" on daytime TV shows, and casuals will keep buying it despite the lack of new software. I bet they sell at least 3 million in Q3, and 7 million between here and the end of October.

I wasn't saying that Kinect's momentum would suddenly end... I wouldn't consider 2m sales in the slowest quarter of the year an end to momentum.

 

[Curufinwe]

I was listening to the 1-28-11 Buzz Out Loud podcast talk about these results, and they made it sound like the Entertainment and Devices Division was the only thing keeping MS afloat, and I've heard the same thing on the CAGcast.

Now I'm not a Finance major so maybe I'm missing something obvious, but I don't understand how they came to those opinions based on these figures.

http://www.microsoft.com/global/inv...PressRelease/FY11/Q2/IRQuarterlyEarnings.html

Operating Income (Loss)

Windows & Windows Live Division -- $3,251
Server and Tools -- 1,776
Online Services Division -- (543)
Microsoft Business Division -- 3,965
Entertainment and Devices Division -- 679
Corporate-level activity -- (963)
Consolidated -- $8,165

 

[DopeyFish]

I'm not sure how anyone can argue against microsoft is windows/office/enterprise

Xbox, quite successful... Is still a mere fraction of the strength of those other core brands

However it could be argued MS needs their consumer device division because it's the main thing that generates a better image for them... Money wise... E&D doesn't even touch the core offerings

 

[LosDaddie]

Very nice. I'm hoping this means MS won't be launching a new console for at least a couple years.

 

[The Dutch Slayer]

I was listening to the 1-28-11 Buzz Out Loud podcast talk about these results, and they made it sound like the Entertainment and Devices Division was the only thing keeping MS afloat, and I've heard the same thing on the CAGcast.

Now I'm not a Finance major so maybe I'm missing something obvious, but I don't understand how they came to those opinions based on these figures.

http://www.microsoft.com/global/inv...PressRelease/FY11/Q2/IRQuarterlyEarnings.html

I listen to BOL everyday and you have to know by now the tech "journalist" don't speak/move by the real numbers but on perception. If your not apple you will not get positive buzz out of them.
MS is doing just fine but they focus a lot on their EaD division because that is what keep the buzz going not world of exel even though does programs are doing fine.