Reposting from the MS can either make $$$ or outsell PS3, NOT BOTH. thread.
It seems that alot of people are prepared to use the EDD profit/loss figures as a surrogate for actual XBOX profitability. Doing so is increadibly missleading. If you look at the latest 10Q filing from Microsoft you can actually get somer sense of the actual XBOX business, this is because they give you deltas as both dollar value and percentage offset.
Nine months ended March 31, 2009 compared with nine months ended March 31, 2008
EDD revenue decreased primarily due to decreased Xbox 360 platform and PC game revenue and included an unfavorable impact from foreign currency exchange rates of $47 million or one percentage point. Xbox 360 platform and PC game revenue decreased $51 million or 1%, primarily as a result of decreased revenue per Xbox 360 console as a result of price reductions during the past 12 months. We shipped 10 million Xbox 360 consoles during the first nine months of fiscal year 2009 compared with 7.5 million Xbox 360 consoles during the first nine months of fiscal year 2008.
EDD operating income decreased primarily due to increased research and development expenses, partially offset by decreased cost of revenue. Research and development expenses increased $317 million or 30%, primarily reflecting increased headcount-related expenses associated with the Windows Mobile device platform, driven by recent acquisitions. Cost of revenue decreased $60 million or 2%, primarily driven by decreased Xbox 360 platform costs.
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The bolded sections are the important ones. Gaming related revenue decreased $51 Million, or 1%. If $50million is one percent then 100 percent is 5Billion. This gives us gaming revenue. Cost of revenue decreased 2% or $60million which gives ua a total cost of revenue for the EDD of $3 billion. A 30% increase in R&D at 317million gives you about $1 Billion before, $1.3Billion after.
So, we have $5 Billion in revenue (gaming alone) with a cost of revenue of $3 Billion and R&D exenses of $1.3 Billion (both for the entire devision) it is very hard to come to the conclusion that the XBOX is losing money.
There is obviosly $2 Billion in expenses missing, $6.5 Billion in revenue, minus $300 Million in profit, minus $4.3 Billion combined cost of revenue plus R&D leaves $2 Billion. There is obviously Administrative costs as well as cost associated with the recent aquisitions that drove up Windows Mobile R&D expeses. Truth be told we can't tell from this report. Perhaps it's $2 Billion dollars worth of money hatting.
To reiterate my point, there is $2 Billion more revenue from gaming then there is cost of revenue for the entire EDD.
Entertainment and Devices Division
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Three Months Ended
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Percentage
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Nine Months Ended
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Percentage
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||||||||
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(In millions, except percentages)
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2009
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2008
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2009
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2008
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||||||||
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Revenue |
|
$ |
1,567 |
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$ |
1,592 |
|
|
(2)% |
|
$ |
6,564 |
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$ |
6,616 |
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|
(1)% |
|
Operating income (loss) |
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$ |
(31 |
) |
$ |
106 |
|
|
* |
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$ |
299 |
|
$ |
668 |
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|
