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[Lucifon]

Huge launch costs for MS if they didn't even manage to come close to breaking even even with record sales. Wow.

With the cost of launching a console it's extremely rare for them to break even, or come close (the PS4's success in this area is an anomaly). Cost of marketing, development/production/distribution etc overall is huge.

Bearing in mind we all consider the 360 to be a success last generation, I'd be very shocked if their losses weren't large during their launch period. In fact I know the Xbox division made a $1.9 billion loss in 2006 - the first year after launch.

 

[Hoo-doo]

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...

The PS4 is profitable on hardware already, according to Kaz Hirai.

 

[Crimsonlink]

Well about 4 million students and office people will pay for Windows Office, Windows 7/8 OS and so on so forth in the next few months so money won't be an issue for Microsoft. But damn if 400 million isn't a lot for just one division.

 

[Phoenician_Viking]

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.

No it´s not just hardware, it´s everything. They count software and Live sub in these reports. It´s cumulative for the Xbox platform.

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.

No you are right, this industry is dead lol.

 

[gofreak]

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.

For the last FY SCE had an operating loss of about $80m. The profit you're referring to is for the first quarter of this FY I think.

Not sure if all these numbers are directly comparable though.

 

[sajj316]

the NFL deal was 400mil, right?

Can't imagine they paid 400 million in one shot .. multi year deal I assume.

 

[SparkTR]

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?

Wasn't that due to the RRoD? The XBO launch has been pretty smooth sailing in regards to hardware, and already has an established subscriber base with Gold. Yet the losses are still massive.

 

[zhao3gold]

How come Sony makes profits from PS4, but MS lost money from Xbox One? Didn't both of them sell consoles with slight loss per unit?

 

[OmegaDL50]

Nice

What part of the Xbox Division losing a shit ton of money is "Nice"?

I'm not expecting a better reason then "insert console warrior bullshit" but I don't mind being wrong.

Well deserved!

Same thing applies to this post too.

 

[efyu_lemonardo]

Is any one of the consoles actually making decent profits right now?

(besides 3DS, which is offset by Wii U anyway..)

 

[SliceSabre]

I know their Xbox division take a while to make money but owwwww.

 

[Ghost Slayer]

Can't imagine they paid 400 million in one shot .. multi year deal I assume.

yeah, i thought like that, similar to CoD deal

 

[meppi]

This kind of fanboyism needs to be killed.

The only fanboyism here is your comment. Killed? Really? How infantile can you get?

This is my 360 collection, I own 2 Pal 360s and 2 Japanese ones as well, and I was ready to go with the Xbone until the moment MS announced how they tried to screw us over.
And that doesn't even account for the almost 200 XBLA games I bought.

 

[Nikodemos]

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.

Nah, I don't think that's the correct lesson. My view is that hardware fuck-ups (Nintendo: expensive, underpowered; MS: more expensive and less-powerful than its direct rival) and crappy strategy (Nintendo: failed hook/USP, relatively primitive services; MS: terrible publicity campaign, poor potential market analysis) have a much higher impact on a company's bottom line than before.

Oh, and Sony's profit is quarterly. The others posted fiscal year results.

 

[Hoo-doo]

How come Sony makes profits from PS4, but MS lost money from Xbox One? Didn't both of them sell consoles with slight loss per unit?

Where are you getting from that the PS4 is sold at a loss? All I can find is this.

"It's been a hugely successful launch, but the key to the long term success of the platform lies in how solidly we can continue to grow the installed base," Hirai said. "In terms of game titles for PS4, as of April 13, 47 titles had been launched with a total of 20.5 million units being sold via retailers and over the network on the PlayStation Store. From a profitability perspective, PS4 is also already contributing profit on a hardware unit basis, establishing a very different business framework from that of previous platform businesses."

 

[Krilekk]

So they have this underpowered, underengineered, overpriced hardware and manage to lose about $100 for every X1 they sell? How is that even possible?

 

[allan-bh]

I don't see nothing extraordinary here.

It's a new hardware sold with a loss, and marketing expenses are included in cost of revenue.

 

[Marvel]

Goddamn.

 

[mrklaw]

Well about 4 million students and office people will pay for Windows Office, Windows 7/8 OS and so on so forth in the next few months so money won't be an issue for Microsoft. But damn if 400 million isn't a lot for just one division.

well the phones division almost broke even, and they slashed and burned that. At some point people will be wondering why this particular project is protected against such scrutiny, especially when MS are going through heavy restructuring and cost cutting.

 

[shacklesmcgee]

How come Sony makes profits from PS4, but MS lost money from Xbox One? Didn't both of them sell consoles with slight loss per unit?

Pretty sure the X1 is sold at a larger loss than the PS4, and now with the kinect being taken out, that didn't help

 

[MidBoss]

Is this more money out or just less money in compared to last gen? Both?

 

[Aaron]

Largely a result of their drastic misunderstanding of the console market when they launched the Xbox One, and the cost of their scramble to change everything about it, including dropping the price, and bribing buyers with various bundles. At the same time, it amazes me how well Sony understood the market, and succeeded despite the threat of smartphones and tablets, considering they were the tone deaf ones in the PS3 era.

 

[RoyalLaFlame]

Well, time to start your #4ThePlayers campaign MS.


400m? Man, that's bad.

 

[BGMNTS]

The only fanboyism here is your comment. Killed? Really? How infantile can you get?

This is my 360 collection, I own 2 Pal 360s and 2 Japanese ones as well, and I was ready to go with the Xbone until the moment MS announced how they tried to screw us over.
And that doesn't even account for the almost 200 XBLA games I bought.

Man all those great games. Oh and Operation Raccoon City

 

[tuna_love]

Largely a result of their drastic misunderstanding of the console market when they launched the Xbox One, and the cost of their scramble to change everything about it, including dropping the price, and bribing buyers with various bundles. At the same time, it amazes me how well Sony understood the market, and succeeded despite the threat of smartphones and tablets, considering they were the tone deaf ones in the PS3 era.

What bribes?

 

[HORRORSHØW]

is that a korean 360, meppi?

 

[Ghost Slayer]

Where are you getting from that the PS4 is sold at a loss? All I can find is this.

I remembered that House said they could get profit if PS4 sold with the hardware + 1 year Plus + 1 game.

 

[erawsd]

Not too surprising. They blew $400 million on the NFL deal alone. Add in premature price drops+free bundles, and the way last gen sales are diving faster than anyone expected.

 

[meppi]

Man all those great games. Oh and Operation Raccoon City

Hehe, yeah... You can't get everything right I guess. Sooner or later you run into a dud as you give something a chance.

is that a korean 360, meppi?

That big box you mean?
If so, so that's the Japanese Cave collection of nearly all the shoot em ups that they released on the system.
Got them all as the premium releases, but wanted a backup as well in case a disc goes bad in the future, so I picked up that special limited release boxset as well.
A big bonus was that it also came with a ton of OSTs and a DLC disc with all those games DLC on it so it can be installed from there.
Just in case the service ever goes down and I wouldn't be able to redownload all those extra game modes that were sold as digital only.

 

[Ascenion]

Dear lord that's terrible. The shareholders must be super pissed right now. I feel sorry for people waiting on an official price drop....that ain't happening any time soon.

 

[Prototype Viktor]

The only fanboyism here is your comment. Killed? Really? How infantile can you get?

This is my 360 collection, I own 2 Pal 360s and 2 Japanese ones as well, and I was ready to go with the Xbone until the moment MS announced how they tried to screw us over.
And that doesn't even account for the almost 200 XBLA games I bought.

latin alphabet fanboy!

 

[Hoo-doo]

I remembered that House said they could get profit if PS4 sold with the hardware + 1 year Plus + 1 game.

I think that was the situation at launch, perhaps.

 

[zhao3gold]

Where are you getting from that the PS4 is sold at a loss? All I can find is this.

Ok, thanks. I must miss this quotation. For Xbox One, with weaker hardware inside, it is very strange MS didn't make profits per unit.

I guess KINECT V2 contributed the loss a lot...

 

[BGMNTS]

Hehe, yeah... You can't get everything right I guess. Sooner or later you run into a dud as you give something a chance.

Hey I forked out full price for that game. We've all been there.

 

[Kouriozan]

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.

And to note that Nintendo never posted any losses before 3DS.
Crazy time.

 

[efyu_lemonardo]

Nah, I don't think that's the correct lesson. My view is that hardware fuck-ups (Nintendo: expensive, underpowered; MS: more expensive and less-powerful than its direct rival) and crappy strategy (Nintendo: failed hook/USP, relatively primitive services; MS: terrible publicity campaign, poor potential market analysis) have a much higher impact on a company's bottom line than before.

Oh, and Sony's profit is quarterly. The others posted fiscal year results.

Even Sony's yearly profits will be nothing to gloat over. And saying the losses are due to manufacturers making mistakes is missing the point. Mistakes are unpredictable, and the price they carry is an important metric of the health of an industry.
There was never a console generation where all sides didn't make big mistakes along the way. Its not like there is some obvious winning strategy here that everyone seems to be missing.

 

[KillerMan91]

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.

By your definition industry has been dead since PS1 days. Sony has never made a profit during launch quarter of their home console. Also MS lsot way more during launches of original Xbox and X360.

 

[Aaron]

What bribes?

Buy this console and we'll give you a free game. It's a form of bribery.

 

[Navid]

Isn't posting losses pretty normal when speaking about fiscal years in which a company launched new hardware...?

 

[zhao3gold]

The only fanboyism here is your comment. Killed? Really? How infantile can you get?

This is my 360 collection, I own 2 Pal 360s and 2 Japanese ones as well, and I was ready to go with the Xbone until the moment MS announced how they tried to screw us over.
And that doesn't even account for the almost 200 XBLA games I bought.

OK. My bad. Sorry for my comments. Hope you can let it go...

 

[Genio88]

That's all their fault, i got an Xbox One on launch cause of the better exclusives plus quantum break, but they've done a great mistake doing a console so weaker than Ps4 at that price and focusing on kinect, they could have done so much better just doing simple things such as a standard powerful gaming console, without Kinect, they've almost destroyed all the good things created with Xbox 360.

 

[derFeef]

Buy this console and we'll give you a free game. It's a form of bribery.

So... a Brundle...?

 

[Alx]

Largely a result of their drastic misunderstanding of the console market when they launched the Xbox One, and the cost of their scramble to change everything about it, including dropping the price, and bribing buyers with various bundles. At the same time, it amazes me how well Sony understood the market, and succeeded despite the threat of smartphones and tablets, considering they were the tone deaf ones in the PS3 era.

I don't really see what in Sony's strategy shows they "understood the market". They just used the same old strategy with the same old games. Their console isn't especially expensive but not especially cheap either, neither is it especially powerful nor underpowered. They did play it safe and got rewarded for that, but there's no strategic brilliance there. They just had to watch Nintendo and MS try different routes and struggle there.

 

[ArcaneFreeze]

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.

iirc Ninty only lost around 90miliion, that means Xbox One managed to lose over 4 times as much as Nintendo as a whole.

 

[Radec]

Isn't a loss on its first year expected?

Unless its the PS2 or Wii or maybe the PS4.

Not sure if how much is expected and how much is alot tho.

 

[RoyalLaFlame]

I wonder how much it costs MS to bundle Fifa 2015 and Forza basically for free for those Tier 2 consoles. I bet it ain't cheap.

 

[meppi]

OK. My bad. Sorry for my comments. Hope you can let it go...

No problem. I understand.
Guess I could have phrased that post a bit better...

 

[HowZatOZ]

Definitely a shame considering the current gaming atmosphere. We don't need more losses, the industry is already on a precarious change. Of course things could easily turn around as Microsoft still has a very competitive console, but investors tell a different story.

 

[Diprosalic]

how much in the negative is the entire XBox project?

 

[Huddy]

All of that with the NFL deal.

Spoiler

Kidding obviously.

With MS now refocusing on games rather than the failed message of TV, I wonder if they tried to get out of that deal at any point, it seems like an awful lot of money on something that may now never be fully realised.