| cleveland124 said: 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 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.
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cleveland124, to reply to your points:
1. Q3 - profit - yes
2. Q4 - loss of 188 million. However, note that in Q4, a lot of the "loss" stemmed from an increase in Sales & Marketing and R&D costs and Headcount costs.
3. Software (XBox) and Consoles are in the same division. So I'm not sure where you can put the $533 million profit you have for software.
4. Yes, this model can never be 100% accurate. However, if we can get 5% to 10% variance on our predictions, then I think the financial model will be considered a fairly good working model.
