It is said that Microsoft is now making a profit with the 360, but does their financial reports take into account their massive spending for third party game exclusives and timed exclusives? How much does Microsoft spend for third party exclusives?

x = the amount of money spent by Microsoft to get third party exclusives.

0

They have very few first-party developers. So, maybe paying for third-party games is as if they were paying for their own games? Like, the money  Sony and Nintendo spend on their first-party games, Microsoft use it on third-party games?

Don't take that as a fact. My heart is too weak today to take abuse.

Who knows?  Presumerably a fair bit.  It does of course have to be in their financial reports - but probably the better question is where?

MS don't necessarily have to surface this spending visibly against entertainment if they want to make the profits from that area look as good as possible - they could probably stick it under promotional activity or vendor funded activity.  Alternatively it might be reported as a cost for the entertainment division and even with that cost they are profitable.

But unless MS wants to have a nasty audit (which they don't of course) it will be reported somewhere.

Not enough, considering 99% of 3rd party games on the HD systems are multiplatform. I wish MS would really throw their weight around for a change, we haven't seen much significant spending from them this gen besides Mistwalker and GTA DLC. :/

Actually the number of studios or people working for MGS increased significantly in the past months.

@op

Sure it is in this financial report. And looking at the results, it really paid off.

I guess they could spend more, but a lot of people (not saying you do specifically) seem to think they have bottomless pockets.  This isn't really true.  They do have huge reserves, but as a publicily traded company with shareholders they cannot spend those reserves beyond certain reasonable limits without taking a lot of flak.

360, etc. is still not their main earnings stream, and they cannot spend endlessly on it out of proportion to what it contributes vs other areas of the business.  To do so could garner very negative analyst and investor attention and harm their financial position on the markets.

I think looking at current position we're not going to see quite as much of the GTA IV DLC type investment for a while.  Instead I expect:

1 - investment in timed exclusive DLC particularly for high profile and US/Europe centric titles like MW2

2 - investment in Natal exclusives and marketing

3 - investments in a few high profile titles, probably more in terms of backing the developer a'la Alan Wake but not going crazy with this

4 - investments in 360 extension services like Facebook, Netflix, etc. as they strive to keep Live ahead of PSN for features

5 - investments in Live itself (interface, content, community services, etc).

as a 3 console man, i must say i dont care what system anythign comes out on

so for consumers like me, they spend too much obviously ;)

Billions

Maybe a hundred million to hundred and fifty at the absolute tops? This includes co-promotion as well as money paid.