lol funny. Post of the week!

Heres some more information from here at beyond3d/forum

Since I am currently looking through a fair number of annual reports, 10K and 10q to see if I can find some bargains or once in a lifetime opportunities due fear in the stock markets, let have a look at MS's numbers.

Lets look at MS financials to get a somewhat clear but still muddled picture

In FY 2008 ending June 30th 2008 ($426 M profit)

Revenue for EDD was 8.14 billion.

"Xbox 360 platform and PC game revenue increased $1.7 billion or 41%" during 2008. Lets add in some math and that comes out to ~5.85 in revenue for the 360 and PC game platform. If retail windows office/OSs was worth 2 billion in revenue that would put that 360/PC game + Office + Windows = ~7.85 billion

That leaves about 290 million in revenue for Zune; Mediaroom; numerous consumer software and hardware products (such as mice and keyboards); Windows Mobile software and services platform; Windows Embedded device operating system; Windows Automotive; and Surface computing platform. 290 million doesn't look like a revenue for all those products, but maybe its true.

In FY 2007 ending June 30th 2007 ($969M loss, excluding one off $1B RROD)

Revenue for EDD was 6.083 billion.

"Mobile and Embedded Devices revenue increased $138 million or 28% driven by sales growth in Windows Mobile software and Windows Embedded operating systems." Add in the math and that puts revenue generated for this segment at ~630 million dollars. Who knows how much is actual profit, in 2006 when this was reported as its own division MS profit just 2 million dollars off 377 million in revenue. But looking at this segment alone and not including Zune and the dozens of other products that EDD encompasses that 2 billion a year in retail Office and OS profits looks like an exaggeration.

In fact I am not even sure that revenue of sales of retail Office or Windows is even recorded under the EDD division as the FY 2006 annual report states:

"In addition, the segment carries out all retail sales and marketing for Microsoft Office and the Windows operating systems (for which it receives an inter-segment commission),"

Its my thought that MS allows the EDD division to handle retail versions Vista, XP and Office because its the only division who sales and marketing team revolves around retail, which a majority of EDD's products would fall under. EDD doesn't record revenue from the product sales but from comission from those retail sales of Office and Windows.

Seems like to me, EDD's responsibility of retail sales of Windows and Office has nothing to do with nefariously trying to inflate EDD revenue or hide losses but rather allowing retail responsbility to fall under one sales and marketing team as it's more efficient than having several teams who handles the same duty.

The interesting part of this particular analysis is that the Xbox 360 revenues increased by 1.7B and the actual shift from profit/loss in the entire division went $1.4B towards profit. As there was very few changes in terms of other revenue one could say the difference was probably almost solely due to the Xbox 360.

 These are numbers from their entire entertament division. We're only talking about 360

woh, if we are only talking about 360 than why are you quoting the entire division's loss record as the 360's loss?  You can't have it both ways.  BTW Blade, did you read the OP?

^ Inferred numbers from EDD for the Xbox 360 which happen to match the work of the OP. I just added a few thoughts to it in bold.