By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Microsoft - Official Microsoft Earnings Results for Q3 2010

theprof00 on 22 April 2010
hobbit said:
theprof00 said:
Shorty11857 said:
theprof00 said:

So I did some math on xboxlive numbers, and if 20M people subscribe to xboxlive and pay 9$ a month, they should be making 540M in a quarter. Of course lots of people just pay per year, not per month, but even so, subtracting the 165M profit this quarter gives us 380M to take away from my math.
WHat the hell does MS spend all its money on?!?!?

 

I guess a better question is, what the hell is dragging down EDD so much.

$9 a month? I'd say they make more like an average of $50 a year which would be $250 million a quarter

Like I said, even if they only made 165M a quarter, where is the profit from licensing, hardware sales, and game sales?

EDIT: correction, monthly rate is 8, not 9. But yes, I know that most people buy yearly subs.

how they handle the money from months paid in advance

Unearned Revenue

Unearned revenue at March 31, 2010 comprised mainly unearned revenue from volume licensing programs. Unearned revenue from volume licensing programs represents customer billings for multi-year licensing arrangements, paid either upfront or annually at the beginning of each billing coverage period, which are accounted for as subscriptions with revenue recognized ratably over the billing coverage period. Unearned revenue at March 31, 2010 also included payments for: unspecified upgrades/enhancements of Microsoft Internet Explorer on a when-and-if-available basis for Windows XP; post-delivery support and consulting services to be performed in the future; Xbox LIVE subscriptions; Microsoft Dynamics business solutions products; unspecified enhancements for Zune HD; the 2010 Microsoft Office system technology guarantee program; online advertising for which the advertisement has yet to be displayed; Mediaroom; and other offerings for which we have been paid upfront and earn the revenue when we provide the service or software, or otherwise meet the revenue recognition criteria 

 

I can't read that. Where is unearned revenue located on the chart?



Around the Network
r505Matt on 22 April 2010
nightsurge said:
theprof00 said:
Seece said:
GamerExclusive said:
$1 billion in profit, another $800 million to go before the 360 was worth it. Will they reach that number by the end of the 360s cycle?

Well for starters, we don't know how much the 360 has lost/earnt over the last 5 years.

But if we're talking E&D division ... it should do it relativly easy.

We don't? I thought totaled FY reports were showing like -6B or something..?

Again, that's EDD, not just the 360.  And that's since the original Xbox.  The 360 itself did not lose much at all compared to the original Xbox.

Man, I actually crunched some numbers on this a while ago. I put everything from Xbox 360's release (so that doesn't include R&D unfortunately) up to about 2 quarters ago. I came to 2.5ish (like 2.503 or something like that) billion in the red since 360's relase. What was last quarter? 345 million or something? I really can't remember *goes to check*

It was 375 million, so putting it all together MS's EDD is about 1.96 billion in the red since 360's release. Again, this doesn't account for R&D costs, but it's the best that can be done without a complete disclosure of every facet of the EDD's financial report (which would be silly for them to do anyways).



hobbit on 22 April 2010
theprof00 said:
hobbit said:
theprof00 said:
Shorty11857 said:
theprof00 said:

So I did some math on xboxlive numbers, and if 20M people subscribe to xboxlive and pay 9$ a month, they should be making 540M in a quarter. Of course lots of people just pay per year, not per month, but even so, subtracting the 165M profit this quarter gives us 380M to take away from my math.
WHat the hell does MS spend all its money on?!?!?

 

I guess a better question is, what the hell is dragging down EDD so much.

$9 a month? I'd say they make more like an average of $50 a year which would be $250 million a quarter

Like I said, even if they only made 165M a quarter, where is the profit from licensing, hardware sales, and game sales?

EDIT: correction, monthly rate is 8, not 9. But yes, I know that most people buy yearly subs.

how they handle the money from months paid in advance

Unearned Revenue

Unearned revenue at March 31, 2010 comprised mainly unearned revenue from volume licensing programs. Unearned revenue from volume licensing programs represents customer billings for multi-year licensing arrangements, paid either upfront or annually at the beginning of each billing coverage period, which are accounted for as subscriptions with revenue recognized ratably over the billing coverage period. Unearned revenue at March 31, 2010 also included payments for: unspecified upgrades/enhancements of Microsoft Internet Explorer on a when-and-if-available basis for Windows XP; post-delivery support and consulting services to be performed in the future; Xbox LIVE subscriptions; Microsoft Dynamics business solutions products; unspecified enhancements for Zune HD; the 2010 Microsoft Office system technology guarantee program; online advertising for which the advertisement has yet to be displayed; Mediaroom; and other offerings for which we have been paid upfront and earn the revenue when we provide the service or software, or otherwise meet the revenue recognition criteria 

 

I can't read that. Where is unearned revenue located on the chart?

Basically they don't count the prepaid months until those months come up.

 check lines 8 and 9 on the cash flow chart


 

 



hobbit on 22 April 2010

The following table outlines the expected future recognition of unearned revenue as of March 31, 2010:

 

 

 

 

 

 

(In millions)

 

 

 

 

 

 

 

Three Months Ending,

 

 

 

 

 

June 30, 2010

 

$

4,877

 

September 30, 2010

 

 

3,123

 

December 31, 2010

 

 

2,245

 

March 31, 2011

 

 

926

 

Thereafter

 

 

1,089

 

 

 

Total

 

$

  12,260

 

 

 

 

 

 

 

 

NOTE 13    UNEARNED REVENUE

The components of unearned revenue were as follows:

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

March 31,

 

 

June 30,

 

 

 

 

 

 

 

 

 

 

2010

 

 

 

2009

 

 

 

 

Volume licensing programs

 

 

 

$

  9,576

 

 

$

  11,350

Undelivered elements

 

 

 

 

764

 

 

 

1,083

Other

 

 

 

 

1,920

 

 

 

1,851

 

 

 

 

 

Total

 

 

 

$

12,260

 

 

$

14,284

 

 

 

 

 

 

 

 

 

 

Unearned revenue by segment was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

March 31,

 

 

June 30,

 

 

 

 

 

 

 

 

 

 

 

2010

 

 

2009

 

 

 

 

 

Windows & Windows Live Division

 

    

 

$

1,498

 

 

$

2,345

 

Server and Tools

 

 

 

 

4,242

 

 

 

4,732

 

Microsoft Business Division

 

 

 

 

5,657

 

 

 

6,508

 

Other segments

 

 

 

 

863

 

 

 

699

 

 

 

 

 

 

 

Total

 

 

 

$

  12,260

 

 

$

  14,284

 

 

 

 



Frank_kc on 22 April 2010

Wouldnt the shipped number indicate that 360 is overtracked here. The stock in market seems low (less than a million), typically it should be around 1.5 to 2 million units. No shortages were reported for 360 compared to Wii and PS3.



Around the Network
hobbit on 22 April 2010
Frank_kc said:
Wouldnt the shipped number indicate that 360 is overtracked here. The stock in market seems low (less than a million), typically it should be around 1.5 to 2 million units. No shortages were reported for 360 compared to Wii and PS3.

shipped as of march 31, its 3 weeks of sales later on here. You also have to remember that console sales always go down this time of yr so the retailers inventories go down as well.  This is the first time, for me, hearing about a Wii shortage. Got a link to that story? and the Ps3 shortage is just a joke at this point. Theres no reason for it, unless they are still losing money in the us market and just don't feel like making them to lose anymore.



ramses01 on 22 April 2010
yaskar said:
Xbox 360 slim + NATAL for 300 dollars certainly for end of the year, Microsoft will make 50-70 dollars profits for each Xbox 360 + Natal sold.

Natal cost 50-70 dollars to produces, and with studio which work for end of the year Microsoft will take a part of their revenu.

Prédiction Natal sell in three years : 15 millions + 100 millions Natal Games.


15 million is less than they will sell the first year.  It will probably sell at least 12 million in bundles, and i could see another 8-12 million in retail sales so call it 20-24 first year.



heruamon on 22 April 2010

These results point to some pretty HUGE results in the offing for EDD in the coming quarters. The 4th quarter is going to be another nice profitable quarter, but the 1st quarter is going to be massive because of Halo Reach...probably the biggest ever, but I think the 2nd quarter will be even larger, since Win Mo 7 won't be a huge drag on the division any longer, and instead might start to challenge Xbox for dominance. That, and the fact that you'll have Halo Reach, compounded with Fable III and whatever other games that get released.



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

heruamon on 22 April 2010
theprof00 said:
matt247 said:
theprof00 said:

So I did some math on xboxlive numbers, and if 20M people subscribe to xboxlive and pay 9$ a month, they should be making 540M in a quarter. Of course lots of people just pay per year, not per month, but even so, subtracting the 165M profit this quarter gives us 380M to take away from my math.
WHat the hell does MS spend all its money on?!?!?

 

I guess a better question is, what the hell is dragging down EDD so much.

R&D

but think of this too. Just on the number of games (27M) they make nearly 450M. First party games make much more than that, and 360 revenue must be pretty high too. Probably around 25-50$ per Elite and maybe 5$ per arcade.

That's a lot of R&D money, especially considering that they didn't invent Natal, some other company did.

LOL...these results must be painful for you to watch.

@ Seece

Yeah...I just saw the shift to 6 July...day before my b-day!...WOOT!



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

scat398 on 22 April 2010

Well this was a very good sign for MS, and really with Apple's numbers yesterday it's a good sign in general for the technology sector.

In terms of MS success in the console market, these number really show how important Live is to their strategy. Being able to rely on the constant income in what is typically a slower quarter is huge.