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Microsoft's Revenues Up Except for Games Division

Zonk posted more than 8 years ago | from the taking-a-loss-on-the-360 dept.

XBox (Games) 68

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."

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XBOX 360 (2, Insightful)

pvt_medic (715692) | more than 8 years ago | (#14575056)

They report though that the XBOX 360 is a large part of their increased revenue. MSNBC Article [msn.com] 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.

Re:XBOX 360 (1, Insightful)

Anonymous Coward | more than 8 years ago | (#14575079)

revenue is money in. They don't lose revenue on the 360 even if they do make a net loss from it.

Re:XBOX 360 (1, Funny)

Anonymous Coward | more than 8 years ago | (#14575080)

They had to pay the IRS a good deal to understand the numbers too. So don't worry, you aren't the only one who can't understand.

Re:XBOX 360 (0)

sexyrexy (793497) | more than 8 years ago | (#14575131)

Increased revenue because they sold fewer 360s at a loss. That means less loss overall, less drain on other sources of income.

Re:XBOX 360 (4, Insightful)

Keeper (56691) | more than 8 years ago | (#14576115)

Incorrect.

Revenue == total money in (money made from selling stuff)
Expenses == total money out (money spent building stuff)
Net income == revenue - expenses

Re:XBOX 360 (1)

CrankyOldBastard (945508) | more than 8 years ago | (#14584833)

Although the image of Microsoft Executives returning $100 notes to the wild for them to run free has a kind of warped appeal, surely you mean that they lose over $100 per unit?

That's what you get... (2, Insightful)

nenya (557317) | more than 8 years ago | (#14575083)

...when you sell your next-gen, multi-million-shipping unit at a loss.

Re:That's what you get... (0)

Anonymous Coward | more than 8 years ago | (#14575357)

"multi-million-shipping"

Huh?

Microsoft has shipped just a little more than a million 360s to stores.

Subtracting off the units that in the pipline to stores and going off reported sales from the usual console retail trackers, Microsoft has sold somewhere in the 600-700k 360s in all three territories.

Re:That's what you get... (1)

YU Nicks NE Way (129084) | more than 8 years ago | (#14576069)

Hey, AC -- we've heard your song before. Problem is, Microsoft spoke to exactly that point in the conference call: MS sold 900K units in North America, 500K units in Europe, and about 100K units in Japan. That's 1.5M units.

Re:That's what you get... (1)

RoadDoggFL (876257) | more than 8 years ago | (#14576508)

Maybe I'm nitpicking, but isn't multi-million at least two million?

Re:That's what you get... (1)

YU Nicks NE Way (129084) | more than 8 years ago | (#14578287)

I don't think so, but it's certainly a supportable claim. Either way, the AC was going on about how only about 900K units had sold worldwide (up from his previous spam about the console not selling out in the US, which has been refuted a bunch of time). That's just not true.

No Halo 2 this year (1)

StalkingElmo (937153) | more than 8 years ago | (#14576451)

Last year at this time, Halo 2 was selling like hot cakes [msn.com] . US$125 million in sales within the first 24 hours when it launched Nov. 9, 2004. By January, it had sold 6.4 million copies (* US$50 = US$320 million). No doubt this also spurred sales of the Xbox Live online service. Last year was an exceptionally profitable time for MS's gaming division.

This year, not only have Halo 2 sales slowed down, but they also went through the expense of launching a new console, which includes not just the cost of the console itself being sold at a loss, but also the costs in marketing, distribution, etc.

Couple those two things together and it's no surprise that the games division is down from last year.

I like xbox (3, Insightful)

trolleymusic (938183) | more than 8 years ago | (#14575088)

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.

Re:I like xbox (1)

gbulmash (688770) | more than 8 years ago | (#14575565)

but I still have to use the horrible MS Office for Mac so that my windows-based colleagues and I can exchange work.

Try OpenOffice.org for Mac. Microsoft won't read its native file formats, but it can pretty handily read and export in Microsoft file formats.

- Greg

Re:I like xbox (1)

trolleymusic (938183) | more than 8 years ago | (#14575796)

:) thanks for that - I'll give it a go!

Re:I like xbox (1)

BenjyD (316700) | more than 8 years ago | (#14577173)

If you're a Mac user who thinks MS Office for Mac is horrible, Openoffice will probably give you a heart attack. It's user-unfriendly even by Linux desktop standards.

Misleading headline (5, Informative)

ThisIsForReal (897233) | more than 8 years ago | (#14575113)

...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!

Typical (2, Funny)

truthsearch (249536) | more than 8 years ago | (#14575124)

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

Typical Slashdot. :)

Re:Misleading headline (1)

EMeta (860558) | more than 8 years ago | (#14575482)

Actually the headline was accurate this time. The division of Microsoft that includes its games lost almost $300M in the last quarter. The implicaiton is that Microsoft on a whole still gained money, which they did. It was up last year, just shown in comparison. The article itself is misleading, as it was certainly a planned loss.

Re:Misleading headline (3, Informative)

MBraynard (653724) | more than 8 years ago | (#14575779)

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.

Re:Misleading headline (0)

Anonymous Coward | more than 8 years ago | (#14577947)

That Hentai. Um, I probably shouldn't know that.

Re:Misleading headline (1)

damsa (840364) | more than 8 years ago | (#14583759)

Yeah, the headline should read, MS Revenues up, games division profits down. Which isnt as sexy.

Re:Misleading headline (1)

CastrTroy (595695) | more than 8 years ago | (#14575526)

Well, the revenues are way up, but the profits are way down. If you are in business, and not making a profit, well, that's a bad thing.

Re:Misleading headline (1)

ClamIAm (926466) | more than 8 years ago | (#14575930)

While I see the error now, when I read it I understood exactly what was being said. Something like "MS profits up from last year, game division still lags" would probably be a bit better.

In other words, the XBox 360 plant was expensive. (4, Insightful)

Thag (8436) | more than 8 years ago | (#14575139)

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

Re:In other words, the XBox 360 plant was expensiv (0)

Anonymous Coward | more than 8 years ago | (#14575231)

Well, if they would find a way to not take such a huge loss on making the 360 vs. selling it, then im sure they wouldnt lose as much.

But then again, who wants to pay for a more expensive 360 or a lesser "quality" 360?

I guess let microsoft take the shaft for this one, they can take the hit.

Re:In other words, the XBox 360 plant was expensiv (0)

Anonymous Coward | more than 8 years ago | (#14575312)

"I guess let microsoft take the shaft for this one, they can take the hit."

Boggle.

No, they can't.

The only reason Microsoft's stock didn't tank today is due to the poor sales of the 360. Something shareholders and wallstreet didn't miss.

Re:In other words, the XBox 360 plant was expensiv (1)

AuMatar (183847) | more than 8 years ago | (#14575321)

Seeing their 4 billion loss on xbox 1, I wouldn't bet on it.

Re:In other words, the XBox 360 plant was expensiv (1)

Osty (16825) | more than 8 years ago | (#14575580)

Seeing their 4 billion loss on xbox 1, I wouldn't bet on it.

You don't think they learned a thing or two from Xbox 1? For example, Microsoft didn't have the rights to fabricate the Xbox 1 CPU or GPU themselves (this also hurt them with backwards compatibility, because they couldn't build an Xbox-on-a-chip like Sony did with the PSOne and PSTwo (where the PSOne was the miniaturized PS1 and also embedded in the PS2 for BC, and the PSTwo is the miniaturized PS2 that will most likely be the source of BC in PS3)). Now they do for 360, which means that future consolidation onto a single chip may eventually be possible. They're now in control of their own supply chain, rather than relying on off-the-shelf parts that aren't even publicly available after a year (I wonder what it cost to keep Intel making 733MHz Celerons in 2005, or to get 10GB drives from Seagate and WD). The Xbox used off-the-shelf parts because the whole goal was to get it to market as quickly as possible. The 360 uses custom-designed parts for which Microsoft owns the IP (yes, IBM built the CPU, but they did so at Microsoft's request and licensed the rights to Microsoft as part of the deal; this is illustrated best by looking at the chips in the Xbox and Xbox 360 -- in the original Xbox, the chips were marked with Intel and nVidia, while the 360 chips are marked with Microsoft). Microsoft never claimed that the Xbox 1 would ever be profitable without relying on software and accessory sales. They've suggested the 360 should be profitable on its own (ie, not counting attach rate or accessories) in a year or two.

Comparing HED's Q2 FY05 to Q2 FY06 is not really fair, either, without taking a closer look at the circumstances. In Q2 FY05, there was no new console but there was Halo 2. In fact, it has been claimed (not necessarily by Microsoft) that Halo 2 was the sole reason HED was profitable in that quarter. Fast-forward a year later, and now you have a brand new console with all of the cost around launching and marketing that, and you don't even have a blockbuster game like Halo 2 to bring in the cash. PGR3, PDZ, and Kameo have done decently well, but they sold nowhere near the level of Halo 2 (in part because we're talking about 20 million Xbox owners vs. 1.5 million 360 owners worldwide).

Re:In other words, the XBox 360 plant was expensiv (1)

GrumblyStuff (870046) | more than 8 years ago | (#14575396)

What? Like the original was?

XBox 360 plant? (0)

Anonymous Coward | more than 8 years ago | (#14575491)

What do you think, the things grow on trees?

Hoo ah. Tough crowd. OK, here's my Jimmy Stewart.... "Zuzu's petals! I'm alive! Maaaaary!"

Re:In other words, the XBox 360 plant was expensiv (2, Insightful)

Yahweh Doesn't Exist (906833) | more than 8 years ago | (#14577150)

>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.

Re:In other words, the XBox 360 plant was expensiv (1)

KDR_11k (778916) | more than 8 years ago | (#14579890)

You got that wrong. MS announced their XBox division won't be profitable until 2007 but after that they expect profits.

In other words.. (3, Informative)

Mr_Tulip (639140) | more than 8 years ago | (#14575191)

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.

Re:In other words.. (3, Informative)

Anonymous Coward | more than 8 years ago | (#14575287)

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.

Re:In other words.. (1)

Mr_Tulip (639140) | more than 8 years ago | (#14575427)

True, my subtraction makes no sense.. time to lower the dose on my medication. The point still stands that in general, it's good news for MS, as revenue is up, and expenses are higher presumably due to marketing and R&D for the XBOX 360

Re:In other words.. (1)

CastrTroy (595695) | more than 8 years ago | (#14575560)

Higher revenue is only a good thing if your profit margin remains the same. If your profit margin is negative, then the more money you make, the more money you lose. If you have a profit marge of -1% and you make $100, you lose $1. However, if you have a profit marging of -1% and you make $1,000,000,000, you lose $10,000,000. I could have a revenue of $130 billion, but If it cost me $645 billion to sell that $130 billion, then I wouldn't be running a very good business.

Re:In other words.. (1)

Keeper (56691) | more than 8 years ago | (#14577040)

You're looking at a single aspect of a static snapshot and using that perspective to judge future performance without actually thinking about what that snapshot represents.

Eternally selling one product at a loss is a bad thing. Microsoft isn't selling one product.

Game consoles are generally sold using a razor-blade model. Sell the razor at a loss (console), sell the blade at a profit (games). Revenue trending up generally means that you're selling more stuff, which is a very good thing for the future (more potential game sales).

Re:In other words.. (1)

CastrTroy (595695) | more than 8 years ago | (#14577681)

But Microsoft tried this last time, with the original XBox, and they never did end up making a net profit on the venture. What makes them think that's it's going to work this time around. They can make more cash by selling their online service, but the other manufacturers are planning to give that away for free. Nintendo sells it's consoles above cost, and got just as manu sales as Microsoft did in the last round. So I would have to say that selling at a loss is not the only way to do it. I think a major reason for the sales of the XBox being so high was that it was basically a PC, and therefore very hackable. Think this new one won't be so hackable, and therefore, won't really catch as much attention on that front.

Re:In other words.. (1)

Keeper (56691) | more than 8 years ago | (#14587199)

Early on in a console's life market share and adoption is more important than breaking even on the hardware. Market share attacts developers, which increases the number of games available for the system, which increases consumer interest, which in turn increases marketshare.

Losing money early on isn't a terribly big deal, as you expect to make it back over the life of the console when customers purchase new games or controllers/peripherals. Remember, early adopters will be "in" for much longer than people who purchase the hardware late in its life cycle. Later in the console's life cycle hardware costs become more important, as there is less time to make up the loss on the hardware.

So WHY didn't the original xbox never really wander into profitability? Hardware costs. Microsoft was unable to cost reduce their hardware; they didn't own any of the IP -- they were just buying off the shelf parts from nvidia and intel. Essentially, they were stuck paying the same prices for parts when they launched the unit as they are today; it was a GIGANTIC error on Microsoft part, and I'm sure Nvidia and Intel were trying to hold back some giant grins as the contracts were being signed.

With the 360, Microsoft owns all of the IP. They can have whoever they want manufacture the parts, they can shrink the chips, etc. The theory being that over time they'll be able to reduce costs and break even on hardware.

Re:In other words.. (1)

ObsessiveMathsFreak (773371) | more than 8 years ago | (#14577356)

You must be using the new math.

What's important is that he tried, not that he got the correct answer.

Re:In other words.. (1)

Just Some Guy (3352) | more than 8 years ago | (#14580389)

What's important is that he tried, not that he got the correct answer.
--
ObsessiveMathsFreak

Oh, so you're one of those throwbacks that thinks that math is about accuracy, proof, and all that other old-school stuff?

Re:In other words.. (1)

edwdig (47888) | more than 8 years ago | (#14575598)

The last 3 months of 2004 included the release of Halo 2, which sold millions within the quarter. It was the only quarter where the Xbox division has ever made a profit. You can't really judge other quarters based on that one. This quarter is just standard fare for the games division.

Re:In other words.. (2, Informative)

moosesocks (264553) | more than 8 years ago | (#14575937)

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)

Re:In other words.. (0)

Anonymous Coward | more than 8 years ago | (#14577011)

The demand for the 360 seems tiny

Is that why you can't walk into any random retailer and pick one up? Or are you using /.think?

Re:In other words.. (1)

jchenx (267053) | more than 8 years ago | (#14577018)

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.

Okay, I admit I'm a little biased (see my profile), but what are you smoking?

If there was "little demand", then there'd be no supply problems. There would be hundreds of 360s readily available. That's simply not the case (except in Japan, but that's a different story). From TFA, over a million consoles were sold in, what, two months? No, it's not the best console release out there, but the PS2 didn't have a good one either and we know how well THAT system has done.

In any case, I would like to see Nintendo do a lot better this generation. The Revolution is certainly interesting, but a lot is going to depend on the public's reception to the new controller once enough people have tried it. I was skeptical of the DS at first, but I'm loving all the games I have for it now. It has become THE platform of choice for all my Nintendo needs. (The retro-library is also very intruiging, although I'd like to see how much the games end up being)

As for Sony, I'm hoping they fall significantly in market share this time around. It just seems like they've gotten too arrogant about their lead position, and that may set them up for failure. They consistently over promise and under deliver (Toy Story-rendering anyone?), and don't care about features that are quickly becoming important to all consoles (consistent online platform, downloadable games, easy to develop for, focus on GAMES and not merely better graphics). I can easily see them releasing the PS3 late this year for a high price ($500), thinking people will snap it up merely because it has Blu-ray. Now I highly doubt they're going to tank in market share, but I do think it's going to be much more even across the board.

Re:In other words.. (1, Informative)

Anonymous Coward | more than 8 years ago | (#14577074)

"Toy Story-rendering anyone?"

http://news.com.com/2100-1040-250632.html [com.com]

"One of the basic premises of the Xbox is to put the power in the hands of the artist," Blackley said, which is why Xbox developers "are achieving a level of visual detail you really get in 'Toy Story.'"

http://www.wired.com/news/technology/0,1282,40970, 00.html?tw=wn_story_related [wired.com]

"Gates said the 3-D chips in the Xbox would be three times faster than anything on the market and offer nearly unlimited graphical visuals. "We're approaching the level of detail seen in Toy Story 2," he said, referring to the computer-generated kids film from Disney/Pixar."

Sony has never in any public statement claimed anything having to do with "Toy Story" level graphics.

Microsoft has. Multiple times.

Time to shutup idiot.

Re:In other words.. (1)

jchenx (267053) | more than 8 years ago | (#14580890)

Waddaya know, the AC is actually right! A simple Google search confirms that the Toy Story comparison was actually made by Gates, but for some reason, the press attributed it to Sony. Then apparently it took off from there and now everyone and their mother thinks it was Kutaragi that made the claim. (To be honest, though, that sounds much like something he WOULD say) Of course Sony did make a lot of claims about the PS2 power (like how it would replace the PC [cnn.com] , but that's pretty common for most console makers to hype their platform). Anyway, thanks for pointing that out, I'll be sure not to use that "Toy Story" line again (or at least attribute it to the right company now).

As for trumped up claims of the Xbox power, I agree that there was a lot of stupid hype about it. It actually frustrated me quite a bit, when I joined the business. There were a lot of people (who didn't understand the games industry at the time), who believed that merely having a faster machine meant it was a better one. The only important numbers were how many polygons could be rendered, etc. Wrong.

"It's the games stupid!" I'm happy to see there's been some major progress in developing better titles for the 360 (no more Azurik please!) and getting some big-name 3rd party developers (welcome EA and Square!). Still a long way to go, but that's a much better approach than merely trumpeting up console statistics (which there's still lot of, but that's par for the course).

And now the big focus is on other platform features surrounding the game experience. Things like gamerscore and achievements are becoming extremely addicting [gamespy.com] , and the Live Arcade is becoming a big hit [slashdot.org] to publishers and gamers. Nintendo has already announced some similar plans, with their own online platform and downloadable library.

But as it stands now, all Sony appears to be trumpeting is two things: Cell, and Blu-ray. Both extremely costly, and I don't really see how much of a benefit they're going to be to gaming.

Re:In other words.. (1)

moosesocks (264553) | more than 8 years ago | (#14581889)

There's a small demand compared to the original XBox.

There's an even smaller supply, hence the shortages. Most large chain stores were only getting 10-20 units per shipment. They're going to sell out regardless of demand. The only true way to gauge demand at this point is to look at the number of people who want one from the people you know.

Most of my friends were in line to buy the original xbox the week it came out. They have little or no interest in the 360, and I would say that out of my friends, more of them are planning on dropping $100 or so on ebay to buy a used N64 to play Goldeneye, Mario Kart, and Super Smash Bros. I think that split-screen gaming reached its peak on the N64.

Small (but not pathetic) demand. Tiny (and certainly pathetic) supply. Not a good combination.

Re:In other words.. (1)

jchenx (267053) | more than 8 years ago | (#14583730)

I think both of us are relying on anecdotal experience. Most of my friends (myself included), had little to no interest in the original Xbox. Microsoft had no experience in the console business, so we were all in a "wait and see" attitude. This time around, it's actually different, and a few of my friends have actually gotten 360s at launch (or at least tried to).

I find it hard to believe there's LESS demand for the 360, now that Microsoft has proven themselves, in some degree. Certainly from reading all the gaming press (from game magazines to your popular web [penny-arcade.com] comics [ctrlaltdel-online.com] ), it seems like there's a lot more demand for the 360 than there ever was for the original Xbox. *shrugs*

I tried looking for actual launch numbers for the original console, but haven't been able to find it so far. That's probably the best way to compare releases and things like demand. If someone could find them, that would be helpful ...

Re:In other words.. (0)

Anonymous Coward | more than 8 years ago | (#14576650)

I am just not seeing the math on this. They posted a profit last year of $55 million on $1.37 billion in revenue. So by my count that is something like $1.31 billion in expenses. This year the numbers are $293 million loss, $1.56 billion in revenues for $1.853 billion in expenses. Now I know that companies do weird accounting, but by my count there expense increased by over a half a billion dollars and they had a drop in profit by $348 million dollars.

Re:In other words.. (1)

Keeper (56691) | more than 8 years ago | (#14577050)

You can't directly compare numbers, as Microsoft shuffled the divisions around a bit between FY06Q1 and FY06Q2.

Small? (3, Funny)

suricatta (617778) | more than 8 years ago | (#14575354)

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

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

Re:Small? (1)

KarmaMB84 (743001) | more than 8 years ago | (#14575677)

That's almost nothing compared to the profit they make off the Office and Client divisions... almost makes you wonder why they bother...

Re:Small? (1)

Swordsmanus (921213) | more than 8 years ago | (#14576237)

A quarterly profit of $55 million is kinda small compared to the average ~$1 billion in losses that division has seen per year for the last four years.

XBox 360 not selling at $299. Price cut needed. (1, Insightful)

Animats (122034) | more than 8 years ago | (#14575827)

The XBox 360 just isn't selling. Maybe they're hard to find at retail, but there are thousands available on eBay. An unopened core system just sold for $255 [ebay.com] , well below the $299 list price. The speculators who bought at the launch are getting killed.

Microsoft will probably have to relaunch the product at a lower price point, and lose even more money per unit.

How much longer will Microsoft's stockholders put up with this money drain? Microsoft lost money on every original XBox, so, hoping to make some money in round two, they increased the price for the XBox 360. But the customers aren't buying.

Re:XBox 360 not selling at $299. Price cut needed. (0)

Anonymous Coward | more than 8 years ago | (#14575932)

We'll see ...

I'm in no way a Microsoft fan, but it is nearly impossible to determing how popular the XBox 360 is being that I know no one who owns one (or has any intention of owning one) and yet they're sold out at retail; I'm told that the next shipment will finially cover all of the remaining people who have pre-ordered a system from the retailers so the systems will become available to the general public. The question is how well will the XBox be selling in February and March? If sales go well we can assume that it is popular enough to justify the early launch; otherwise you could assume that it was a waste to rush the system to market. Ultimately, I am willing to wait until September or October to make my decision (it is only 9 months afterall) which demonstrates that (for me) the early launch was wasteful.

Re:XBox 360 not selling at $299. Price cut needed. (1)

ClamIAm (926466) | more than 8 years ago | (#14575955)

Maybe they're hard to find at retail, but there are thousands available on eBay.

I wonder how many of these just go back and forth between "speculators".

Microsoft will probably have to relaunch the product at a lower price point, and lose even more money per unit.

I'm waiting to see whether their better-laid plans work out this time around (better contracts with component makers, etc).

And in regards to the shareholders, I wonder if those who own MS stock have all been pacified by the big giant with promises of huge future earnings. OK, obviously it's not all of them, but it certainly puzzles me.

Re:XBox 360 not selling at $299. Price cut needed. (1)

jchenx (267053) | more than 8 years ago | (#14575982)

The XBox 360 just isn't selling.

Are you kidding? (Or rather, are you trolling?)

The units are still hard to find at retail, no doubt. Yes, there are a lot of units on eBay, but just doing a search for "xbox 360" brings up several packages that are over well $400. A few weeks ago, they were selling for much higher even (over $600). Plus, a lot of shady folks were actually selling Xbox 360 empty boxes, which IMHO is pretty fradulent. There were definately a lot of speculators and in-store managers that hoarded multiple consoles so they could make a quick buck on eBay. I don't feel sorry for those shmucks who somehow sold them at a loss (they should learn to use the reserve price feature).

Anyway, the fact that the price has gone down to more reasonable levels is an indication that more people are able to get the console through normal means and aren't willing to pay an arm and a leg to get it ASAP. That's a good sign for Microsoft, as it means that people who want a console are starting to get them. The fewer people that have to be shafted through eBay, the better.

Really, the criticism that's been levied at Microsoft isn't that the console is too expensive or not selling well, it's that it is plain not available. TFA explains a little bit why (unforeseen component shortages).

If you're going to bash MS just for the sake of bashing MS (a popular /. past-time), at least get your story right. :P

Hurry, before the price goes down (2, Informative)

Animats (122034) | more than 8 years ago | (#14576649)

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.

Re:Hurry, before the price goes down (0)

Anonymous Coward | more than 8 years ago | (#14576727)

The same seems to be true for the premium systems, too.

If you are selling either type of 360 on ebay you are at best getting back the price you paid for the system + tax + your time and effort to order, pick up, and place for sale the thing on ebay.

Re:Hurry, before the price goes down (1)

jchenx (267053) | more than 8 years ago | (#14576955)

That's because the core systems are $300 at retail, and they've been much more likely to be on stock than the premium bundles (which are $400). Most of the hardcore fans want only a premium system, and those who don't can now get it with some calling around.

Also remember that eBay prices were huge right before Xmas, with parents desperate to fill their kids' wish lists. If you've got a garage full of Xbox 360s with the hope of selling them for mega profit ... you're screwed. You're only going to get it for retail price. Maybe you're better off scalping Super Bowl tickets instead ...

Re:Hurry, before the price goes down (0)

Anonymous Coward | more than 8 years ago | (#14576991)

"Also remember that eBay prices were huge right before Xmas"

Actually they weren't.

They were higher, but not the crazy prices some xbox fans want people to believe. There were a few idiots who paid 1000+ for a 360, but they were exceptions.

well duh.. core systems are 299 brand new.. (1)

cybrthng (22291) | more than 8 years ago | (#14580268)

why pay the hassle of ebaying when you can get it cheaper at walmart? No S&H, no paypal, no dealing with slow shippers or fraudsters.

WalMart has been getting stocks fo Core systems, it's the premium that is hard to find and sought after but even then it's really a matter of just looking for it.

Ebay is hardly the value of the market

Re:XBox 360 not selling at $299. Price cut needed. (0)

Anonymous Coward | more than 8 years ago | (#14576567)

I've been watching the eBay auctions for a couple of months ever since I told a friend she should be able to make a good profit on the four 360s she got through her work.

Microsoft has a serious problem on their hands with demand for the 360 if eBay is any indication. Both the number of bidders and low price for 360s are a bad sign.

Mixed with the growing reports of 360s being instock all over the US has got to be a sign that the console just isn't going to reach the first Xbox installed base numbers.

Home & Entertainment Division (2, Informative)

R3d M3rcury (871886) | more than 8 years ago | (#14576186)

"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.

Re:Home & Entertainment Division (0)

Anonymous Coward | more than 8 years ago | (#14576802)

Yes. MS uses MacBU's high yearly profits to prop up the rest of the H&E. This is by design.

Another important headline... (-1, Offtopic)

Metroid72 (654017) | more than 8 years ago | (#14577378)

I noticed this story on the same link. I figured I post it here since it doesn't meet the usual "Nintendo is doomed" criteria for being published. "Profits Double For Nintendo On DS Success Officials from Nintendo have announced the company's third quarter results, with profits more than doubling for the company, from ¥21.3 billion ($183.7m) in the same period in 2004 to ¥55.66 billion ($480.3m) in 2005, thanks to continued strong sales of the Nintendo DS handheld, specifically in Japan but also elsewhere in the world. Operating profit for the company was roughly flat compared to the previous year at ¥63.17 billion ($544.9m). Following these positive results, the company has kept to its full year estimates of a net profit of ¥75 billion ($646.9m), compared to ¥87.4 billion ($754.0m) a year earlier. The company has also kept its full year unit sales forecasts for the Nintendo DS, Game Boy Advance and GameCube unchanged, despite poor sales of the latter contributing to disappointing results in previous quarters this year. Software sales during the all-important Christmas sales period were said to be strong, but as normal the company's vacillating profits were equally influenced by its enormous foreign currency holdings, with an overall war chest now estimated to be worth close to $10 billion. Share in the company closed up 1 percent at ¥16,380 ($141.3) on Thursday. Overall, over the first nine months of the current financial year, shares in Nintendo have risen an impressive 23.3 percent." P
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