Microsoft’s Xbox 360 sinking quickly in face of opposition from PS3 and Wii

[LordTheNightKnight]

Alby_da_Wolf said:

LordTheNightKnight said:

Alby_da_Wolf said:

LordTheNightKnight said:
"The 360 was MOVED for accounting purposes into the 'Entertainment and Devices" division starting FY08."

It was there well before, at least as early as the of '06, when the Zune launched.

Yes, but don't forget that MS calculates, totally or in part, some expenses like “broad-based sales and marketing, product support services, human resources, legal, finance, information technology, corporate development and procurement activities, research and development and other costs, and legal settlements and contingencies” for some divisions, including Entertainment and Devices, in another mishmash report item that years ago was named "Other" and now, judging by where losses are reported, should be "Corporate-Level Activity".

Putting lots of differents losses together makes more difficult for external observers to distinguish clearly what produces profits and what not, except for divisions that despite the accounting trick report losses anyway or for division like those of Windows and Office, that undoubtedly are cash cows that produce gargantuan profits.

In this case, I'm going to have to say that may not be our business, in terms of such specifics. Nintendo and Sony don't give us that much information anyway. And besides Microsoft can't fudge too much, or else they risk getting audited by the IRS.

Basically, this seems to be just sifting around to try to make it look as though the 360 is in trouble.

 

The part inside quotation marks is as MS itself summarizes the "Other" report item. And I can bet too that the accounting is formally perfect and that this is a field where MS wouldn't ever push itself outside the law.

About XBox 360, we only know that production costs are lower than XBox 1's, but project and development should have been higher, as XBox 1 was really a modified x86 PC, while the 360 is a real console designed from scratch, with an expressly made PowerPC tri-core CPU, for example, and this alone could have easily cost hundreds of millions, even billions, particularly to pay the foundries' plants and start production. And this seems to be confirmed by 2004 and 2005 reports, when "Other" losses skyrocketed. But unless we are expert accountants, we'll never know precisely.

Well they did admit R&D was much bigger this time, so we don't need to look for that. Yet that was already a while ago. The general profits for the company already took care of those costs.