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Forums - Sales Discussion - Is Microsoft the only one of the big 3 who knows how to run a video game business at this point?

A_C_E on 29 July 2011
Seece said:
RolStoppable said:
Seece said:

Well I agree, and I don't really agree with the OP anyway, not with Nintendo's track record and how much they made last year. But we do have their updated FY forecast to go on, which is $250M profit ...

That could drop and they're in danger of having the first FY loss in company history?

Yeah, their updated forecast is pretty shocking, because it's such a significant adjustment. There's definitely a possibility that they will end this fiscal year with a loss, but things would need to go really bad for that happen. The majority of the adjustment is due to the unforeseen drastic 3DS price cut, unlikely that something of the same magnitude happens again. Realistically, I think they are least going to post a profit of $100 million which is still pretty bad considering Nintendo's history.

Yeah, the 3DS cut was most certainly not in their foreseeable future when they launched in the west, I don't get the drastic cut tbh, I think $199, with a strong SW line up at xmas would have been better for the company ... they don't have to have huge sales from the get go, it's obviously very very early days for the 3DS.

But if they keep cutting DS and Wii forecast then yeah they can drop further, and despite the cut, 3DS still might not live up to their 16 mill forecast, I mean they have 15.3M left to go in 3 Q's ... and they still have a lot of stock out there (1 mill)

The drastic cut I'm guessing has to do with the DS's launch price - $169 - and Nintendo's just trying to match it. I am going to take another guess and say the reason why Nintendo didn't wait to drop the price come christmas is because that's when Vita launches in many territories (confirmed speculation, really) and Nintendo wants to establish the 3DS as much as possible before it's main competitor releases.

As for the 3DS forecast it's going to be an incredible Christmas for the 3D machine if there are enough Nintendo games and a couple of good 3rd party games to satisfy or to warrat a $169 price tag. The 3DS should be the best selling system this Christmas if most things go well enough.



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phinch1 on 01 August 2011
Seece said:
kowenicki said:
ethomaz said:

Seece said:

oh FGS they've changed it again, NWS was Bravia, LCDTV PS ect, this just means they've shoved even more in together, so the picture is even less clear.

I found that.

Its pretty unclear now... will be difficult to work out if PS is profitable from now on.    Thats a massive division. 

No point in even mentioning that divisions profits as it'll be impossible to figure out how it's doing. Sony really do want to cover their tracks ...

And they would have gotten away with it too if it wasnt for you peskey kids...



S.T.A.G.E. on 02 August 2011
blue7x7 said:
I think they are just the only ones who haven't gotten arrogant. Sony obviously did and which is why they are in third place. Nintendo seems to have gotten arrogant as well which is why they are in the spot they are now wii sales keep going down and the 3DS bombing. As long as Microsoft keeps playing it smart and doesn't get too arrogant then they will be okay.


Microsoft is arrogant, but they know they don't know as much about the gaming crowd as Sony and Nintendo. They take generational moves out of Sony and Nintendos playbook. This is how they've survived.



SOLIDSNAKE08 on 03 August 2011

yeh microsoft may be doing well making profit at the moment but they got other things to worry about. like why is the wii and ps3 outselling them after all the pushes they've been making.



XanderZane on 03 August 2011
zarx said:

New platforms are expensive to introduce and MS are the only ones currently not introducing one. Also the Xbox brand has been bleeding hundreds of millions for years and cost billions to establish and will need another 15 years of profit to make the money back. 

Being the only one bassed in the USA where they make they majority of thier sales also helps with the weak US dollar which hurts Sony and Nintendo.

They've already recovered what they lost witht he XBox. You musthave missed the announcement over a year ago. The original XBox had lost over $5 billion. The PS3 lost more then that and they have yet to recover what they lost with the PS3 and PSP Go. They are still bleeding money now, especially with the PSVita which they will sell at a LOSS again just like the PS3. I'll be surprised if they get out of the hole this generation.



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deskpro2k3 on 03 August 2011

If i can make an extra 100 dollars a month by putting ads on my youtube channel, imagine how much Microsoft is making with Ads on their dashboard, including LIVE fee. Just 2 examples, now you know how they have enough money to campaign Kinect and buy timed exclusive rights etc.



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zarx on 03 August 2011
XanderZane said:
zarx said:

New platforms are expensive to introduce and MS are the only ones currently not introducing one. Also the Xbox brand has been bleeding hundreds of millions for years and cost billions to establish and will need another 15 years of profit to make the money back. 

Being the only one bassed in the USA where they make they majority of thier sales also helps with the weak US dollar which hurts Sony and Nintendo.

They've already recovered what they lost witht he XBox. You musthave missed the announcement over a year ago. The original XBox had lost over $5 billion. The PS3 lost more then that and they have yet to recover what they lost with the PS3 and PSP Go. They are still bleeding money now, especially with the PSVita which they will sell at a LOSS again just like the PS3. I'll be surprised if they get out of the hole this generation.

If you read further down you would see MS lost $4.2b during the OG Xbox's life and that they are currently $4.7B in the hole since they launched the Xbox brand as of the end of this year they can start paying off the losses on the OG Xbox as this gen they havn't even profited as a whole on the 360 yet they will soon thos as they just have $500 million to go. But as it currently looks like they will be launching a new console in the next 2-3 years they will drop back into the red again before they can recover all losses on the Xbox brand. They won't have another $1.2b year this year because they won't have Kinect which made over $1b last finacial year, 360 sales and software are both also down YoY.



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scottie on 03 August 2011

US $ has plummeted and Japanese yen is high. MS has a huge advantage in profitability due to factors outside of their control.

Nintendo is hardly 'bleeding money', it's a flesh wound. I don't think Sony is losing much either



scottie on 03 August 2011
zarx said:
Seece said:
zarx said:

New platforms are expensive to introduce and MS are the only ones currently not introducing one. Also the Xbox brand has been bleeding hundreds of millions for years and cost billions to establish and will need another 15 years of profit to make the money back. 

Being the only one bassed in the USA where they make they majority of thier sales also helps with the weak US dollar which hurts Sony and Nintendo.


Havn't been doing your homework. X360 is practically break even for the division and if profits remain the same, the entire division will break even (yes even that 4.2 Bill Original Xbox diaster) will be cleared within 3 years.


admitadly my info is pretty old...

Wasn't the bill for the OG Xbox ~$6 billion with ~$4 billion in losses the devision first turned an operating profit (as in actually made more than they spent or invested not just more than the costs that year) in 07 with $89 million in operating profit since then they have made more each year but I don't think they have made back the billions they lost. But if you can provide the data showing that they have made a net profit over the life of the Xbox brand I would love to see it.


In all likelihood Seece is going off EDD financials raw data, whereas zarx is going off an interpretation of the raw data. Zarx's data will be more accurate, because it does not include the highly profitably keyboard/mouse/joystick section of EDD.



D-Joe on 05 August 2011

since 360 shipment already lead 1.4m,i can't see how 360 sales will going down yoy



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