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bumidan on 25 July 2008
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Gross Margin Breakdowns

 

FY End Jun 2007

 

Total Gross Margin should be $1,889(*) – see the beginning of the thread again

 

Console = 6.6 million x $45(*) gross margin per unit = 297(*)

Games = 49.5(*) x $12(*) gross margin per unit = 594(*)

Accessories = 23.8(*) x $6(*) gross margin per unit = 143(*)

Live = 55%(*) Gross margin x $225(*) revenue = 124(*)

PC Games = 60%(*) Gross margin x $48(*) revenue = 29(*)

 

Zune+ and Mobile = 35%(*) Gross Margin x $1,999(*) revenue = 700(*)

 

--- Zune+ 1,368(*) add Mobile 631(*) = 1,999(*) revenue (see previous analysis)

 

Subtotal Gross Margin = $1,887(*)

Add Variance of $2(*) (or basically 0% unaccounted for)

 

= $1,889(*) Total Gross Margin

 

FY End Jun 2008

 

Total Gross Margin should be $3,569(*) – see beginning of thread again

 

Console = 8.7 million x $75(*) gross margin = 653(*)

Games = 65.3(*) million x $20(*) gross margin = 1,305(*)

Accessories = 31.3(*) million x $9(*) gross margin = 282(*)

Live = 75%(*) gross margin x $380(*) revenue = 285(*)

PC Games = 62%(*) gross margin x $54(*) revenue = 33(*)

 

Zune+ and Mobile = 41%(*) gross margin x $2,356(*) revenue = 966(*)

 

Subtotal Gross Margin = $3,524(*)

Add Variance of $45(*) (or basically 1% unaccounted for)

 

= $3,569(*) Total Gross Margin

 

Some Explanations:

 

  1. Console margins assumed to be $45(*) in FY end Jun 07 to $75(*) in FY end Jun 08 due to cost reductions
  2. Games margins increased because of the assumption that Halo has greater margins than regular software
  3. Accessories margins increased due to assumed cost reductions
  4. Live Margins were increased due to increased downloads, especially of movies, which should essentially be almost cost free on a per unit basis.
  5. PC games initial assumption of 60% gross margin – a somewhat semi-standard gross margin for software in general.  Margins increased slightly to 62% in the next year.
  6. Zune+ and Mobile – assumed a 35% gross margin – due to mix of both hardware and software.  Increase grossed margins to 41% due to cost reductions on the Zune hardware.
  7. All these numbers were done via some trial and error – but this initial result makes the most sense for ALL BUSINESS SEGMENTS in the EDD division.