heruamon said: 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!

Why would you say that? Because you think I'm a fanboy? Maybe you confuse substantiated arguments with fanboy gibberish. I'm biased toward Sony, yes, but only because I think they have the best console. I am also biased toward the DS, which I think is the best all-around console of all time. I wrote just two days ago that 360 is a great product, and had they not gotten under my skin with the original xbox and my RROD I would still be playing it (because it's a great product). So chill. If you look calmly at my posts and the responses to them, instead of breaking out the hot tar and raising the drawbridge, you would see that someone posted a segment of almost 800M$ worth of "unearned revenue", which I'm sure consists mainly of xbox live subscriptions that haven't reached maturation.

So look at that. I asked a question and got an amazing answer that you yourself might not have even known. 360 probably has another 800M$ worth of profit that isn't categorized yet.

I have faith that next gen, MS will really shine. This gen was just unlucky for them. That's not a fanboy quip, it's a fact.

theprof00 said:   I have faith that next gen, MS will really shine. This gen was just unlucky for them. That's not a fanboy quip, it's a fact.

How has this gen been "unlucky" for them?

If they were "unlucky" this gen then what would you categorize them as last gen?

dsister44 said: theprof00 said:   I have faith that next gen, MS will really shine. This gen was just unlucky for them. That's not a fanboy quip, it's a fact. How has this gen been "unlucky" for them? If they were "unlucky" this gen then what would you categorize them as last gen?

they were a disaster last gen. Perhaps a necessary disaster, but a disaster nonetheless.

This gen they had a lot of failures, but also a lot of victories.

The whole campaign of the xbox, the reason why it was created, was to bring the focus back to PC based gaming. In direct opposition was Sony, who was trying to direct consumers into buying a console that had computer like functions. They were disrupting PCs in a sense. PSs were cheap, were focused mainly on gaming (niche), and were more reliable, but almost never rivaled pc grafx. But like the wii lesson, people didn't care, it was easier and more social than sitting at a computer. It was a livingroom activity.

In this sense, MS failed this gen by mistakenly likening their console with a very similar PC problem, instability. In the xbox, they mistakenly likened themselves to the cumbersomeness of PCs.

Secondly, they had the chance this gen to really squash the PS brand. This is a similar point to the previous one, although this one has to do more with sales. They've lost a lot of brand quality this gen and the consumer can see that.

Lastly, the Live integration to PCs has taken far too long to be called successfully linked to PCs. Along with that, the 360 is getting so many features that they will be soon disrupting PCs themselves, rather than tying the two together. 

Those are the failures...but when you count them among the successes they aren't very significant. The main thing though is that they could have done so much better. But I guess that could be said about any console.

EDIT: The main point I want to make is that they could have really squashed PS this gen, and were unable to fulfill that potential. However, they are in a very good place to follow through next gen, and I guarantee I will own the next xbox as well, because they have really established a strong foothold this gen. It's like, they got their foot in the door last gen. Then this gen the door swung open and they fell through into the hallway and down onto the carpet. This gen they were capable of swinging the door open and raping everyone inside, but they didn't. Now everyone is aware of the intruder though, so it's debateable how the competition will react next gen.

EDIT2: And yes, I am aware that I just juxtaposed being lucky with breaking into someone's home and raping everyone.

Xbox division posts $165 million Q1 profit despite 12% 360 sales drop

* By Tor Thorsen, GameSpot
* Posted Apr 22, 2010 2:20 pm PT

Increased Xbox Live revenue, lowered manufacturing costs, currency exchange help offset just 1.5 million consoles sold; Microsoft reports record $14.50 billion quarter overall.

This afternoon, Microsoft reported its financial results for the January-March quarter, the third of its fiscal year. For the three months ending March 31, the software giant posted record revenue of $14.50 billion, a 6 percent increase over the same period in 2009. Profits for the quarter jumped 35 percent to $4.01 billion, for $0.45 earnings per share.

Microsoft had a record quarter…

Microsoft's Entertainment and Devices division had a less spectacular quarter, with revenues rising just 2 percent year-over-year to $1.67 billion in revenue. The division saw operating income rise from a loss of $41 million in January-March 2009 to $165 million during the same period this year.

The profit was in large part due to a $62 million windfall resulting from foreign currency exchange rates. Microsoft also called out increased revenue from Xbox Live as a factor, as well as a $199 million decrease in the cost of revenue "resulting primarily from lower Xbox 360 console costs." The drop in manufacturing costs for the console will likely further fuel speculation that Microsoft has developed an Xbox 360 Slim, which would require fewer materials to make and cost less to ship.

…but Xbox 360 sales dropped from 1.7 million to 1.5 million.

That said, both Xbox 360 hardware and software revenues were down during the quarter. Microsoft only sold 1.5 million consoles from January to March, down 12 percent from 1.7 million during the same period the year prior.

Though the company said the slip was "in-line with overall market decline," its impact was compounded by the lower price commanded by Microsoft's consoles, which now sell for $200 (Arcade) and $300 (Elite). First-party Xbox 360 software sales were also down, comparing unfavorably due to the release of the hit Halo Wars during the same quarter in 2009.

Non-gaming revenue in the Entertainment and Devices Division, which also makes the Zune, was up 14 percent. Looking ahead until the end of its fiscal year on June 30, Microsoft expects EDD revenues to remain largely flat, which executives said would mean a "significant uptick" in gaming revenues during the April-June quarter.

For the nine months ending March 31, Xbox 360 and PC game revenue decreased $240 million, or 5 percent. This was in part due to console sales falling from 10 million to 8.8 million. The loss was compounded by the fact that Microsoft cut into its own bottom line to boost sales, slashing the price of the Xbox 360 Elite in August and releasing a $300 Halo 3: ODST/Forza 3 Elite bundle in March.

Curiously, though, Entertainment and Devices Division profits more than doubled, rising 242 percent from $249 million to $851 million. Part of this was due to increased Xbox Live revenue, but the main reason was, again, cost of revenue reductions--this time to the tune of $779 million, or 19 percent. This was in large part due to lower manufacturing costs for the Xbox 360, which also saw sales and marketing costs drop $60 million, or 6 percent.

Finally, the EDD division found savings by reducing research and development expenses during the nine month period by 6 percent, or $82 million. The cutback is curious, given that Microsoft spent the period hard at work developing its motion-sensing system Project Natal, which it plans on launching this holiday season with as much hype as it would console.

Q2 2011 (October - December 2010) will be insane for the EDD. Natal, WinMo 7, Halo Reach, Fable III will boost the profits big time. Gears of War 3 will be out 4 months later and this one won't hurt sales either.

Next Q4 should be healthy with Alan Wake, Splinter Cell and Crackdown 2 as exclusives and 1st party games.

nightsurge said: So 165 million more profit to the 360's EDD division and looks like close to a billion in EDD profit over the last 12 months! That's pretty good considering all the R&D for Natal, Windows Mobile 7, etc included in there.

  The R&D development costs for this item will not be disclosed until next years earnings. This will bring the dept down again i predict without a new console micrsoft's EDD dept will be well into the red next year prompting microsoft to move away from the console gaming arena and conecntrating on the war with apple and google. Sony and Nintendo will crush microsoft next gen (if they arent already this gen) Microsoft will be running scared this time next year in every dept they compete in. It's long overdue but seeing microsoft actually with real competitiona dn seeing them for what they really are is very appealing!

theprof00 said: dsister44 said: How has this gen been "unlucky" for them? If they were "unlucky" this gen then what would you categorize them as last gen? they were a disaster last gen. Perhaps a necessary disaster, but a disaster nonetheless. This gen they had a lot of failures, but also a lot of victories. EDIT2: And yes, I am aware that I just juxtaposed being lucky with breaking into someone's home and raping everyone.

If they closed down all their PC gaming studios and have published fewer PC games as the years have progressed since the start of the generation. Hardly what I would call defending their PC gaming empire. PC gaming and their PC empire has hardly been a focus of their actions these past few years. The Xbox 360 and Live is about expanding beyond their Win/Office monopolies. The Xbox 360 is meant to link in with the EDD which is why they have Windows Mobile, Natal, Windows 4 Cars, Surface etc in the same division.

They could have done some more damage at the cost of taking a massive loss. This is hardly what I would call sustainable. Which is why they didn't do it obviously. They probably weighed it up at the time and decided against it.

How has Live integration been slow? Can you detail their aims with regards to PC + Xbox 360 Live integration?

 

 

theprof00 said: The whole campaign of the xbox, the reason why it was created, was to bring the focus back to PC based gaming. In direct opposition was Sony, who was trying to direct consumers into buying a console that had computer like functions. They were disrupting PCs in a sense. PSs were cheap, were focused mainly on gaming (niche), and were more reliable, but almost never rivaled pc grafx. But like the wii lesson, people didn't care, it was easier and more social than sitting at a computer. It was a livingroom activity.

Source?

matt247 said: Finally, the EDD division found savings by reducing research and development expenses during the nine month period by 6 percent, or $82 million. The cutback is curious, given that Microsoft spent the period hard at work developing its motion-sensing system Project Natal, which it plans on launching this holiday season with as much hype as it would console.

Its easy to see why R&D costs are reducing.  Natal, Windows Phone 7, and Kin Phones are all moving into a production phase.  R&D costs are reducing as they just iron out the wrinkles.

If WinMo7 takes off (which I'm thinking it will), EDD will see a HUGE 2nd quarter...maybe even bigger than the first one is going to be.