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Forums - Sales - Microsofts profit by division. Is the XBOX really worth it to Microsoft?

MonstaMack on 21 March 2010

Last I knew MS has profited on the 360 for the last several years, however they did eat a huge chunk of money on RROD costs. When It's all said and done they will profit quite some bit on the 360, but will not recover enough in profit to wipe out original XBOX costs.

The original XBox was basically Microsoft's way of getting into the gaming market. They ate tons of money on the original XBox.



It's just that simple.

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Ssenkahdavic on 21 March 2010

The Xbox is a great idea for MS.

Look at their top 2 profit makers (Windows and Office). They know that eventually the profits from these two ventures will begin to fall (with one goes the other).

It is MUCH better for a company to diversify WHILE they are making record breaking profits than once those profits dry up and the company is losing money. They just need to tread carefully as they grow that they do not get closed to the US governments definition of a Monopoly (talking MS as a whole, not the Xbox).



 

  

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kibebr on 21 March 2010

I am SURE Xbox brings a LOT OF MONEy to MS... but how is included ZUNE (new online music store investments) and also MS LIVE... there´s no balance and this are down...

I think it´s just a matter of time to make a shift to the positive side of the chart... it could take up to 3 years, but menas MS os insied a lot of media markets... soo... they are right about this jump and investing a lot these years..

They are not losing money, believe me.



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Squilliam on 21 March 2010

Simple answer really:

They had an opportunity to not make another console after the Xbox 1. They decided to make another console and so far they doubled the sales and they have other useful synergies with their online services, music/film sales online, Windows mobile + WM7 gaming and the console itself has been profitable for them on its own. Pretty decent effort really. Their ROI better than had they kept the money in the bank.



Tease.

Xoj on 21 March 2010
LuStaysTru said:

Synergism for me describes Sony's plan more because the PS3 gave a huge boost to Blu-Ray. In my opinion Blu-Ray would have beaten HD-DVD anyway but that wasn't a risk Sony wanted to take. I'm not sure how synergistic Microsoft is. Their plan seems to be more just to throw Sonys synergy off. That's why they supported HD-DVD, if High-Def movie playback was really that important to their console in their eyes then the XBOX would be supporting Blu-Ray playback now.

I'm pretty sure most people would agree that the E & D division is pretty indicative of the Xbox's success. If you were to extend this graph back to 2001 then June 2007 is a pretty reasonable date to assume first time profitability for the XBOX brand.

Also it's been a pretty rocky road since then according to the graph. With a potential price cut looming and heavy marketing for the Natal who knows what the future holds for their bottom line.. When Microsoft releases a new console they will go the Nintendo route in my opinion and try to be profitable out the gate by making a less powerful console and like Nintendo it could be what makes or breaks them in the end.

Admittedly I'm no expert but this is what I've observed.

it if sells, it will fail to steal sony thunder, nintendo knew this and they went into a different route,

 

sony it's about selling a full entertaiment system,

they saw this and their focus was fighting the japanese giant, the thing is sony not only recovered they are stronger first party than ever, so their only choice it's bundles and heavy price reductions, it's already much cheaper so it have to be a big one.

but their ultimate goal, they failed, PS brand remained strong, and will see PS4, and in the end it's smartphones that ended up taking the lead where they already have nothing of marketshare.



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Bamboleo on 21 March 2010
kowenicki said:
Bamboleo said:
Ms may want to drop off the console market in a near future.

The overall profit performance of this adventure in the home console land is an absolute failure for Microsoft, just look at the graph.

The only purpose to Microsoft to have a console is to prevent sony from having a living room PC damaging their golden cow: Microsoft Windows

If they can afford losses like this just to reach that end, then I wish good luck for them.


look at the top graph.... they can easily afford losses like this.

but the 360 now makes a profit so its mute.

Say that to stock holders.

Being able to afford a loss is worse than not having that said loss at all....



Huya on 21 March 2010

Man as long as a console keeps releasing halo its all the same to me~~



Staude on 21 March 2010
leatherhat said:
The xbox has been and always will be a means an end. MS doesn't want Sony having a PC replacement in the living room that is independent of the windows platform.
  • "It is Microsoft. And I will kill them."
Ken Kutaragi, 1994, when asked who he thought the biggest competition would be for his upcoming PlayStation game console.



 ^regardless. That is a badass quote.
Anyways... It's like you said.


Check out my game about moles ^

Mr Puggsly on 21 March 2010

I assume "Entertainment & Devices" does not include Xbox Live services. That's probably the most profitable aspect of the Xbox 360.



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Squilliam on 21 March 2010
Staude said:
leatherhat said:
The xbox has been and always will be a means an end. MS doesn't want Sony having a PC replacement in the living room that is independent of the windows platform.
  • "It is Microsoft. And I will kill them."
Ken Kutaragi, 1994, when asked who he thought the biggest competition would be for his upcoming PlayStation game console.



 ^regardless. That is a badass quote.
Anyways... It's like you said.

Its pretty funny that they ended up getting killed.



Tease.