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[Zen]

IF they over shipped, that means that Sony will perform better versus then in the coming quarters. Or it could indicate a relative surge in Worldwide performance. When do we get the numbers from Sony?

 

[Psychotext]

IF they over shipped, that means that Sony will perform better versus then in the coming quarters.

Pretty much... though it doesn't really account for how much inventory is / was already in the channel.

 

[CadetMahoney]

You're not getting it $20,885 Million total revenue (that is over $20 Billion dolars) for Microsoft, not just Xbox.

crazy numbers.

dr_evil.jpg

 

[Curufinwe]

Xbox is the star of the show. It's really MS only successful venture outside of Windows. they have a lot riding on it at this point.

How is Xbox the star of the show when the Windows, Server, and Business divisions are the ones making the big money?

 

[Freki]

Xbox is the star of the show. It's really MS only successful venture outside of Windows. they have a lot riding on it at this point.

Yeah - Office is losing them money left and right... oh wait...

 

[duk]

pure ownage congrats MS

 

[FieryBalrog]

Xbox is the star of the show. It's really MS only successful venture outside of Windows. they have a lot riding on it at this point.

soooo, soooo wrong.

 

[[Nintex]]

Xbox is important to Microsoft because it is an actual 'cool' product that you can see, read and hear about. Another 10 million Office licenses probably brings in more cash overall but it's hard to 'understand'. They can't wave those around on Wall Street or have a circus put up a show in celebration.

 

[Windu]

funny that the windows/windows live division is now only the 3rd biggest behind office and server

 

[Captain Tuttle]

Xbox is the star of the show. It's really MS only successful venture outside of Windows. they have a lot riding on it at this point.

I think I know why you're called "specialguy"

 

[watership]

Xbox is important to Microsoft because it is an actual 'cool' product that you can see, read and hear about. Another 10 million Office licenses probably brings in more cash overall but it's hard to 'understand'. They can't wave those around on Wall Street or have a circus put up a show in celebration.

Hey Windows Phone is cool!

Spoiler

At least I think so

 

[specialguy]

How is Xbox the start of the show when the Windows, Server, and Business divisions are the ones making the big money?

Well, it seems to be on the top of analysts mind when discussing these results. And usually microsoft themselves highlight it as well.

xbox could be making some serious cash if say, the rest of edd lost 500m, then xbox made 1b profit, etc.

Look people, I'm not the one writing these articles, many of which are talking about the Xbox before anything else.

EXAMPLE: http://www.bloomberg.com/news/2012-01-19/microsoft-profit-tops-estimates-on-xbox-demand.html

Headline there:

Microsoft Profit Tops Estimates on Xbox, Demand

 

[TheFightingFish]

How is Xbox the start of the show when the Windows, Server, and Business divisions are the ones making the big money?

STB division represent! *shades on*

 

[Psychotext]

Not that it's of any particular relevance, but by my estimates the E&D division is in the black since the release of the 360. Because of the other costs in there I'd imagine they've made a reasonable profit on the 360 at this point.

...and no, before someone says it, it's no-where near being profitable since the original xbox.

 

[CaptainABAB]

It used to be that MS only had two money-makers: Windows and Office

Over the years, Server & Tools has been added as the 3rd leg (thanks to Windows Server, SQL and I think SharePoint is in there.) It doesn't make as much profit but it has caught up to Windows in terms of revenue (in fact, it surpassed by a bit)!

Q2 2012 Revenue by Division (with % change compared to the same quarter last year)
• Business: $6.28 billion, up 3%
• Windows: $4.74 billion, down 6%
• Server & Tools: $4.77 billion, up 11%
• Online Services Business: $784 million, up 10%
• Entertainment & Devices: $4.24 billion, up 15%

Q2 2012 Income by Division
• Business: $4.15 billion, up 2%
• Windows: $2.85 billion, down 11%
• Server & Tools: $1.97 billion, up 17%
• Online Services Business: Loss of $458 million, up 18%
• Entertainment & Devices: $528 million, down 21%

E&D has joined the other three in revenue but not profit (since this involves low-margin hardware unlike pure software.) 500M of profit isn't anything to sneeze at, especially compared to Online Services, which lost almost the same amount.

The other good sign for E&D is the revenue growth. Shareholders look for growth primarily.

 

[user_nat]

Keep in mind that Q1 shipments were down YoY which may explain some of the Q2 improvement.

Office is pretty darn profitable.. Wow.

 

[BladeoftheImmortal]

So then they weren't channel stuffing? Or is that not clear from the info we have? Because wasn't there a lot of butthurt over the 66 million and claims of channel stuffing.

Nice effort to get 8.2 out there.

You don't really know if it was stuffed till the following quarter. if their next quarter is massively lower than previous years, then likely they stuffed it too much.

 

[FateBreaker]

...and no, before someone says it, it's no-where near being profitable since the original xbox.

It's actually getting there, slowly but surely. A few more years at this rate.

 

[Psychotext]

It's actually getting there, slowly but surely. A few more years at this rate.

Possibly, though they're obviously soon to take another massive hit from the successor to the 360.

 

[French]

Dat channel stuffing.

Next quarter shipment numbers will be pretty low.

 

[FateBreaker]

Possibly, though they're obviously soon to take another massive hit from the successor to the 360.

True.

 

[Cromat]

It's really hard for me to judge if Xbox is now considered a success or a failure.

It lost more money than it earned. It took a lot of time and resources that Microsoft could have invested in possibly more lucrative markets (smartphones?). The first Xbox hardly made a splash and the 360 was a distant 2nd to the Wii in marketshare.

But through it all, it's still considered a successful venture for Microsoft by the members of this forum and the media. I never really understood that, I would expect that by now shareholders would have slammed on the table demanding to stop with the gaming nonsense.

Of course gamers like 360 and many consider it (rightly) to be this generation's leading platform. But it's hard to reconcile the business reality with the overall perception of the product.

 

[bigtroyjon]

It's really hard for me to judge if Xbox is now considered a success or a failure.

It lost more money than it earned. It took a lot of time and resources that Microsoft could have invested in possibly more lucrative markets (smartphones?). The first Xbox hardly made a splash and the 360 was a distant 2nd to the Wii in marketshare.

But through it all, it's still considered a successful venture for Microsoft by the members of this forum and the media. I never really understood that, I would expect that by now shareholders would have slammed on the table demanding to stop with the gaming nonsense.

Of course gamers like 360 and many consider it (rightly) to be this generation's leading platform. But it's hard to reconcile the business reality with the overall perception of the product.

Outside shareholders have no influence on anything Microsoft does but in a hypothetical world where they do, why would they want a product shut down that grows revenue every year and currently produces $1billion+ in profit on an annual basis?

 

[Camilos]

Not really, xbox made up nearly all of the revenue/costs so you could at least figure out profit minimums since everything else was a money sink.

What do you mean by profit minimum. If the 360, kin and zune were all part of the same division, how can we know exactly how much profit the 360 alone was generating. We know how much profit the division brought in, but we don't know how much more it would have been if the zune and kin weren't dragging down profits.

 

[Cromat]

Outside shareholders have no influence on anything Microsoft does but in a hypothetical world where they do, why would they want a product shut down that grows revenue every year and currently produces $1billion+ in profit on an annual basis?

Well it's easy to say now that the 360 has really hit its stride, but was about almost a decade of losses and general pain in the ass for Microsoft?

Unlike other ventures, making consoles is specifically hard since it requires the console maker to go out of their way to secure content on their platform. It's a lot of effort that only relatively recently succeeded in bearing fruit. I don't understand how they didn't quit the race earlier, though i'm obviously glad they didn't.

 

[KageMaru]

It's really hard for me to judge if Xbox is now considered a success or a failure.

It lost more money than it earned. It took a lot of time and resources that Microsoft could have invested in possibly more lucrative markets (smartphones?). The first Xbox hardly made a splash and the 360 was a distant 2nd to the Wii in marketshare.

But through it all, it's still considered a successful venture for Microsoft by the members of this forum and the media. I never really understood that, I would expect that by now shareholders would have slammed on the table demanding to stop with the gaming nonsense.

Of course gamers like 360 and many consider it (rightly) to be this generation's leading platform. But it's hard to reconcile the business reality with the overall perception of the product.

The EDD has the most growth potential of any other division at MS, much of that has to do with the xbox brand and how it can be used as a trojan horse into the living room.

Also if you're counting the original xbox, those loses have pretty much been absorbed and is never expected to be recouped.

What do you mean by profit minimum. If the 360, kin and zune were all part of the same division, how can we know exactly how much profit the 360 alone was generating. We know how much profit the division brought in, but we don't know how much more it would have been if the zune and kin weren't dragging down profits.

I believe he means that no matter how much the other projects dragged down the division, we at least knew the vast vast majority of that profit was generated by the 360. Going forward, that won't be the case.

 

[Sho_Nuff82]

It's really hard for me to judge if Xbox is now considered a success or a failure.

It lost more money than it earned. It took a lot of time and resources that Microsoft could have invested in possibly more lucrative markets (smartphones?). The first Xbox hardly made a splash and the 360 was a distant 2nd to the Wii in marketshare.

But through it all, it's still considered a successful venture for Microsoft by the members of this forum and the media. I never really understood that, I would expect that by now shareholders would have slammed on the table demanding to stop with the gaming nonsense.

Of course gamers like 360 and many consider it (rightly) to be this generation's leading platform. But it's hard to reconcile the business reality with the overall perception of the product.

The time to pull the plug would have been in 2000 (or 2005), not when the product you sunk billions into is finally making a return and become the fastest selling hw worldwide.

The 360 has been profitable since 2008 and LIVE is more popular than ever, if anything the Xbox division has earned quite a bit of leeway as it's dragging Zune and Windows Phone across the finish line with it.

 

[duk]

Well it's easy to say now that the 360 has really hit its stride, but was about almost a decade of losses and general pain in the ass for Microsoft?

Unlike other ventures, making consoles is specifically hard since it requires the console maker to go out of their way to secure content on their platform. It's a lot of effort that only relatively recently succeeded in bearing fruit. I don't understand how they didn't quit the race earlier, though i'm obviously glad they didn't.

u need to think longer term MS strategy is 20+ years for the xbox platform

 

[bigtroyjon]

What do you mean by profit minimum. If the 360, kin and zune were all part of the same division, how can we know exactly how much profit the 360 alone was generating. We know how much profit the division brought in, but we don't know how much more it would have been if the zune and kin weren't dragging down profits.

The 360's profit in the past was likely higher than the overall divisions since it featured various other products that lost money, so the divisions profits numbers have been a good minimum profit estimate for the 360. We know it probably made at least that amount of profit. And as you point it it's possibly much higher although we don't know for sure, hence the minimum estimate.

Going forward both Windows phone and Skype will be expected to make money so we can no longer just assume that the xbox platform made at least as much as the division did.

 

[AdventureRacing]

Anyone even bringing up the original xbox are just way off base. It's long gone and that's sunk costs. If they were going to give up on this division they would have done it back then not now that it is actually successful.

The xbox division is hugely profitibale and is actually seeing a lot of growth (it's profits are most likely being held back by less successful products in the same division as well).

I don't see how the xbox can be viewed as anything but a success right now. They are also building up very nicely towards next gen.

 

[ShapeGSX]

IF they over shipped, that means that Sony will perform better versus then in the coming quarters. Or it could indicate a relative surge in Worldwide performance. When do we get the numbers from Sony?

How do you know that Sony didn't over ship, too?

December seems to have been a surprise to everyone.

 

[jvm]

Why is the hardware table wrong for last FY? I have quarterly shipments of 2.8, 6.3, 2.7, and 1.9. The figures in the table don't even sum to the stated 13.7.

Please fix?

Possibly, though they're obviously soon to take another massive hit from the successor to the 360.

I don't see how that's obvious.

 

[Psychotext]

I don't see how that's obvious.

Because the only company not to go into the red on the release of a new console is Nintendo... and Microsoft isn't Nintendo.

Sure, there's an outside chance that they wont, but it's extremely unlikely. Launching a console is a very, very expensive endeavor and they don't have something like a DS or a Gameboy propping up the division.

 

[FateBreaker]

It's really hard for me to judge if Xbox is now considered a success or a failure.

It's pretty easy, actually. As other have noted, the product is currently at a high point and making back a lot of money lost from previous years. At this rate it will take a few years to go even. Still, I think this claim would be better suited for what Xbox 3 comes out or when there is a clear decline of sales. As of right now, that's not happening, unless you only look at Japan.

Because the only company not to go into the red on the release of a new console is Nintendo... and Microsoft isn't Nintendo.

Sure, there's an outside chance that they wont, but it's extremely unlikely. Launching a console is a very, very expensive endeavor and they don't have something like a DS or a Gameboy propping up the division.

I think what jvm is getting at is that MS might actually take the Nintendo route. Xbox 3, for all we know, could pull a Wii where they implement more innovation of the device (Kinect, etc) without simply producing more technology, which usually, indeed, causes a negative for divisions. It's really hard to say at this point.

 

[jvm]

Because the only company not to go into the red on the release of a new console is Nintendo... and Microsoft isn't Nintendo.

Sure, there's an outside chance that they wont, but it's extremely unlikely. Launching a console is a very, very expensive endeavor and they don't have something like a DS or a Gameboy propping up the division.

I'm disputing mostly the "massive". We don't know for sure what anyone's doing yet, right? I'm willing to bet they'll have an outside the box idea for the next console that helps keep it really reasonable from the beginning.

 

[bigtroyjon]

Because the only company not to go into the red on the release of a new console is Nintendo... and Microsoft isn't Nintendo.

Sure, there's an outside chance that they wont, but it's extremely unlikely. Launching a console is a very, very expensive endeavor and they don't have something like a DS or a Gameboy propping up the division.

No other company has been having this level of profit other than Nintendo. I'd be shocked if they went into the red with a new console.

 

[Psychotext]

I'm disputing mostly the "massive". We don't know for sure what anyone's doing yet, right? I'm willing to bet they'll have an outside the box idea for the next console that helps keep it really reasonable from the beginning.

Maybe, but there's still R&D, tooling up, software, testing (oh so much testing this time), advertising (wouldn't be surprised to see hundreds of millions worth of that) etc etc etc etc costs to take into consideration. It's not all about the baseline hardware costs.

I guess it'll be interesting to see one way or another.

 

[jvm]

Also, in the hardware table, these don't add up:
2.2 + 6.0 + 1.7 + 1.2 = 11.1 (not 11.2, but 11.2 is the official figure)

What's up?

 

[jcm]

Outside shareholders have no influence on anything Microsoft does but in a hypothetical world where they do, why would they want a product shut down that grows revenue every year and currently produces $1billion+ in profit on an annual basis?

I don't see the argument for shutting it down, but there's an argument to be made that it was a waste of resources that could have been more effectively spent elsewhere. While MS invented the Xbox, Apple was inventing the ipod and iphone and google was inventing google. Those are businesses that should have been right in MS's wheelhouse.

Now, I don't think the xbox actually made MS fuck up music, phones and the internet, but I'm unconvinced the xbox was a particularly good investment for them. Happily for us gamers, they made it, and they can always point to the online business if anyone needs a better example of a really bad business. How much money have they pissed away there in the last 10 years? It's got to be close to $10B now, right? Edit: $9.53B! Next quarter might be the one!

MS had so much money that they wanted to spend i don't think investing in the xbox stopped them from looking into other endeavors.

I don't either, but that's different than saying it was a good investment.

 

[AdventureRacing]

I don't see the argument for shutting it down, but there's an argument to be made that it was a waste of resources that could have been more effectively spent elsewhere. While MS invented the Xbox, Apple was inventing the ipod and iphone and google was inventing google. Those are businesses that should have been right in MS's wheelhouse.

Now, I don't think the xbox actually made MS fuck up music, phones and the internet, but I'm unconvinced the xbox was a particularly good investment for them. Happily for us gamers, they made it, and they can always point to the online business if anyone needs a better example of a really bad business. How much money have they pissed away there in the last 10 years? It's got to be close to $10B now, right?

MS had so much money that they wanted to spend i don't think investing in the xbox stopped them from looking into other endeavors.

 

[Alaskanbullworm]

Also, in the hardware table, these don't add up:
2.2 + 6.0 + 1.7 + 1.2 = 11.1 (not 11.2, but 11.2 is the official figure)

What's up?

I'm guessing it's a rounding thing. For example it could really be something like 2.24 + 5.99 + 1.74 + 1.23 which is 11.2 but since the numbers are rounded, the equation looks like it's 2.2 + 6.0 + 1.7 + 1.2 = 11.1

 

[jvm]

I'm guessing it's a rounding thing. For example it could really be something like 2.24 + 5.99 + 1.74 + 1.23 which is 11.2 but since the numbers are rounded, the equation looks like it's 2.2 + 6.0 + 1.7 + 1.2 = 11.1

But I thought MS only announced fiscal-year to date figures which have a single digit to the right of the decimal point. So that really shouldn't happen. Maybe I misunderstand...

 

[CaptainABAB]

MS had so much money that they wanted to spend i don't think investing in the xbox stopped them from looking into other endeavors.

No kidding.

Investing in the xbox did not prevent them from making an iPad or iPhone or Google. Obeying the Windows cash cow (CE/Mobile had a "start" menu, Tablet Edition was just Windows+Stylus) is what prevented them from introducing a break-out hit.

IMO, Xbox is the best thing to happen to Microsoft. Love it or hate it, the various dashboards (blades, NXE, Metro) look nothing like Windows. It introduced Kinect and all of the cool hacks that followed. It is a consumer hit.

If anything, I think Microsoft needs more risks like Zunes and Xboxes.

 

[jcm]

But I thought MS only announced fiscal-year to date figures which have a single digit to the right of the decimal point. So that really shouldn't happen. Maybe I misunderstand...

All of the numbers listed are correct. They announced those four quarterly numbers, and at the end of the year they announced the full year nimber that didn't add up.

We shipped 11.2 million Xbox 360 consoles during fiscal year 2009, compared with 8.7 million Xbox 360 consoles during fiscal year 2008.

Your misunderstanding is thinking that the FY number is added from the released numbers, when in actuality it is a fifth announced number for the year.

 

[Road]

Why is the hardware table wrong for last FY? I have quarterly shipments of 2.8, 6.3, 2.7, and 1.9. The figures in the table don't even sum to the stated 13.7.

Please fix?
I don't see how that's obvious.

1.7 is the number reported by Microsoft. Maybe you changed it to 1.9 so it would add to 13.7.

The difference is certainly rounding as has been said.

 

[bigtroyjon]

I don't see the argument for shutting it down, but there's an argument to be made that it was a waste of resources that could have been more effectively spent elsewhere. While MS invented the Xbox, Apple was inventing the ipod and iphone and google was inventing google. Those are businesses that should have been right in MS's wheelhouse.

Now, I don't think the xbox actually made MS fuck up music, phones and the internet, but I'm unconvinced the xbox was a particularly good investment for them. Happily for us gamers, they made it, and they can always point to the online business if anyone needs a better example of a really bad business. How much money have they pissed away there in the last 10 years? It's got to be close to $10B now, right? Edit: $9.53B! Next quarter might be the one!

Microsoft spends more on R&D than pretty much any other company and the money they've spent on xbox is a fraction of their overall R&D spend. It didn't stop them from doing other things.

 

[jcm]

IMO, Xbox is the best thing to happen to Microsoft. Love it or hate it, the various dashboards (blades, NXE, Metro) look nothing like Windows. It introduced Kinect and all of the cool hacks that followed. It is a consumer hit.

You mean during the Steve Ballmer era? Because otherwise that statement is insane.

 

[Windu]

the various dashboards (blades, NXE, Metro) look nothing like Windows.

Not for long

 

[charlequin]

I don't see the argument for shutting it down, but there's an argument to be made that it was a waste of resources that could have been more effectively spent elsewhere. While MS invented the Xbox, Apple was inventing the ipod and iphone and google was inventing google. Those are businesses that should have been right in MS's wheelhouse.

Sure, but hindsight is 20/20. Lay out a list of technologies in, say, 1999: cellphones, search engines, video game consoles, media players, streaming media, social networking... knowing the right time to move into any of these markets would be a challenge for anyone. (Sometimes you're even there too early: Microsoft was pushing tablets way before the technology was viable, then gave up just in time for Apple to swoop in and make it happen.)

The Xbox division was probably rather mediocre in terms of investments Microsoft could've made at the turn of the century, but it's doing pretty well in terms of investments Microsoft has made, relative to all the businesses where they've thrown away billions of dollars and never seen any sort of return. If they can turn the success of the 360 into a sustainable business going forward (by launching a 720 that loses less upfront and moves into significant profitability faster) it'll definitely cement itself as a successful choice overall.

 

[Radec]

8.2m

I'm one of that.

Thank me MS!