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cleveland124 on 04 August 2008
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bumidan said:
cleveland124 said:

bumidan said:

If you look at the previous thread, you can see how I broke it down.  If you take into account all the numbers, it's ALMOST IMPOSSIBLE, that they are losing money on hardware in FY End Jun 08.

Because there are no other places where you can attribute enough profit to make up the $426 million that they reported.

How about this math.  According to this site, Microsoft has sold 46,083,983 units of software for the first six months of 2008.  Assume 80% is third party and they collect a $10 licence fee.  Assume 20% is first party and they make $20.  Let's do the math.  36,867,186.4 x $10 = $368,671,864 from third party software.  $9,216,796.6x $20 = $184,335,932 for first party.  Total profit of $553,007,796.  Hmm, that's over their reported profit.  Still think they can't be losing money on hardware?

 

@ cleveland124.  I appreciate your feedback.

That calculation does not prove anything unless you can show me how those numbers "fit" with their reported numbers.

For example, if you are saying that the GROSS MARGIN from your data = $553 million (or is it revenue?)

Let me make it simpler for you this way:

FY Jun 08 (taking into account the 6 months you are referring to)

Total Revenue = 8,140 million

Total XBox PLATFORM Revenue = 5,784 million

Total Cost of Revenue = 4,571 million

Total Gross Margin = 3,569 million

Where will you put the $553 million + the other 6 months of profit , compared to the 8.7 million consoles sold? Also, Live, PC Games, Accessories?  Remember, you only have 3,569 of gross margin (+ losses) you can play with.

Let me know?  I can do the calculations for you even, just as long as you give me the numbers.

I have done trial and error, making hardware lose money, software make a lot of money, etc. and so far I haven't been able to do what you are claiming - that is consoles lose money in FY Jun 08 - to make the numbers work.

So if you have some data/numbers, I will be more than happy to do it for you.

But realistically, I think it's highly UNLIKELY that 360 consoles(on average) are losing money in FY Jun 08.

I look forward to your reply.  Thanks.

 

I was indicating gross margin for software.  And I only included six months of sales.  I must be honest I am not totally sure where the $3.5 billion of profit comes from.  Fiscal year (12 months) June 2008 their earnings were $426 million for the games division.  If we look at year 2008 (last six months) only for the games division they have a loss. 

Quarter 3 Jan 1-Mar 31   89 million profit http://www.gamedaily.com/articles/news/xbox-division-posts-89-million-profit-in-q3-on-robust-demand-for-360/?biz=1
Quarter 4 Apr 1-Jun 30  188 million loss http://www.microsoft.com/msft/earnings/FY08/earn_rel_q4_08.mspx

So during the timeperiod I presented, software would have made them a net profit of $533 million while the games division reported a loss of $99 million.  Your good with numbers, but I still think you make way too many assumptions to be entirely accurate.  I also think in the games unit the only known loser is 360 hardware.  If they are still reporting a 6 month loss for the unit, I don't know how they could be making money on hardware.