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Xbox One lost $400m for Microsoft for FY2013/14

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zomgbbqftw

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Jan 21, 2011
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Taken from their 10K filing;

"Computing and Gaming Hardware revenue increased $3.2 billion or 49%, primarily due to higher revenue from the Xbox Platform and Surface. Xbox Platform revenue increased $1.7 billion or 34%, due mainly to sales of Xbox One, which was released in November 2013, offset in part by a decrease in sales of Xbox 360. We sold 11.7 million Xbox consoles during fiscal year 2014 compared with 9.8 million Xbox consoles during fiscal year 2013. Surface revenue increased $1.3 billion or 157%, due mainly to a higher number of devices and accessories sold.

Computing and Gaming Hardware gross margin decreased slightly, due to a $3.2 billion or 59% increase in cost of revenue, offset in part by higher revenue. Xbox Platform cost of revenue increased $2.1 billion or 72%, due mainly to higher volumes of consoles sold and higher costs associated with Xbox One. Surface cost of revenue increased $970 million or 51%, due mainly to a higher number of devices and accessories sold, offset in part by a charge for Surface RT inventory adjustments of approximately $900 million in fiscal year 2013."

This is on a gross margin basis as well so the operating loss is probably much higher.

Taken from here:

http://www.shareholder.com/visitors/activeedgardoc.cfm?f=rtf&companyid=MSFT&id=10123079 (link opens a Word doc).
 

orochi91

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Jan 10, 2014
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I can't imagine there being a successor to the XB1. A dedicated gaming console
from MS seems outlandish in the long-term. They'll probably shift focus to PC
development.
 

munroe

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May 29, 2012
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This is just hardware. Don't companies generally sell the console at a slight loss then recoup the costs in software sales? As mentioned above, Xbox live subs probably rakes in a fair amount but because it's software it won't come under these hardware figures.
 

MormaPope

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Mar 31, 2012
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Back in them original Xbox days. Except this time around the hardware isn't better than the rest.

Last year was a fucking travesty for the Xbox brand.
 

Amir0x

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Oct 27, 2004
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A lot of money indeed. As always, internally there has been quite a lot of talk about the Xbox division needing to shape up, so this sort of stuff never looks good.
 

gundamkyoukai

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Aug 30, 2009
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There is no way MS can do any more price drops fast unless they going to pull a Sony and lose billions.
Things just going to get worst when more and more people stop paying for live , it's like there back to Xbox days.
 

SparkTR

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Jul 16, 2008
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I'm wondering when their Xbox experiment is going to pay off. Seems like they sunk billions into the original Xbox for a future that will never be realised, if only they knew then what they know now.
 

MormaPope

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Mar 31, 2012
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So Nintendo lost a few hundred million dollars, MS lost 400 million and Sony made 30 million profit?

Sounds like a healthy industry to me for sure.
To me it sounds like 2003/2004/2005. Except with greater losses this time around.
 

jem0208

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Jul 17, 2013
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Does this include software sales and XBL?


Because that's where the majority of the money comes from right?
 

SparkTR

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Jul 16, 2008
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I remember hearing such things during the original Xbox run.
During the original Xbox years Microsoft was under the impression that living room computers would be the market that would challenge their Windows empire, they were dedicated to it. That market turned out to be Mobile. With the Xbox One they're stuck in a low-margin, unprofitable rut that they didn't expect back then.
 

BigDug13

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Dec 20, 2006
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It's not like they're not used to it with xbox branch..
Except for that segment of gamers that used to clamor for the brand because it was definitively (on average) the best console brand for game performance. Until now. Losing that one feather in the cap hurts while being the biggest money loser.
 

Hesemonni

Junior Member
Feb 27, 2007
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Huge launch costs for MS if they didn't even manage to come close to breaking even even with record sales. Wow.
 

Xater

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Jul 28, 2007
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That's definitely ammunition for the people within MS who want to spin the division off.
 

Psycho_Mantis

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Jul 28, 2012
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So Nintendo lost a few hundred million dollars, MS lost 400 million and Sony made 30 million profit?

Sounds like a healthy industry to me for sure.
Isn't the $400 million loss for the entire fiscal year.

Isn't Sony's profit of $40 million just one Q.
 

mrklaw

MrArseFace
Jun 10, 2004
59,901
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I can't imagine there being a successor to the XB1. A dedicated gaming console
from MS seems outlandish in the long-term. They'll probably shift focus to PC
development.
Not sure how cheap you can get windows RT hardware, but they could have made a cheaper google TV style box - keep the HDMI passthrough so they can do skype notifications and overlays etc, but focus more on living room/media apps and information - forget the high end games.

an always-on box which can pipe information onto my TV screen while I'm watching TV, has cortana built in, skype/youtube/netflix/amazon instant video etc would be pretty interesting for me
 

Hoo-doo

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Sep 29, 2011
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There's been lots of speculation that Satya Nadella isn't interested in doubling down on unprofitable hardware anymore like previous CEO's were.

I doubt they are going to drop the price even further like a lot of people are expecting them to.
 

zhao3gold

Banned
Jan 22, 2013
555
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So, the cost increased due to higher volumes of hardware sold? Does it mean sell more, lose more?

How Sony managed this part? I remember they also sell PS4 with a slight loss...
 

Vice

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Dec 23, 2009
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Seems to be the norm for the launch of an Xbox platform. Didn't the 360 lose nearly close to a billion in its first few years?
 

shacklesmcgee

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Oct 8, 2013
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Woooow, includes live subscriptions
Computing and Gaming Hardware
The principal products and services provided by the Computing and Gaming Hardware segment are: Xbox gaming and entertainment consoles and accessories, second-party and third-party video game royalties, and Xbox Live subscriptions (“Xbox Platform”);
 
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