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

Forums - Microsoft - When will 360 be in the black?

Squilliam on 04 December 2010

Well I can't say when the Xbox 360 will be in the black because teasing that out of the division as a whole is impossible. Barring a specific announcement all we really have to work with is the whole EDD in the time period since the 360 released.

Based off the charts Seece made I would say they will be profitable before the end of 2011 given the fact that WP7 and Xbox 360 look to be doing even better than they ever have in recent memory. I would say in the end they would have made a nice 2B profit along with the massive investment in Live infrastructure which they can reap future benefits from.



Tease.

Around the Network
Seece on 04 December 2010
Squilliam said:

Well I can't say when the Xbox 360 will be in the black because teasing that out of the division as a whole is impossible. Barring a specific announcement all we really have to work with is the whole EDD in the time period since the 360 released.

Based off the charts Seece made I would say they will be profitable before the end of 2011 given the fact that WP7 and Xbox 360 look to be doing even better than they ever have in recent memory. I would say in the end they would have made a nice 2B profit along with the massive investment in Live infrastructure which they can reap future benefits from.

Do you expect them to be profitable a lot sooner with the next console?



 

thx1139 on 04 December 2010
Seece said:

Here is a handy chart I made earlier.



I believe it's accurate ...

The purple is the timeframe when the 360 was out and losing money, the latter green is since 360 has been making money (yes since 2007!) the green at the top is original Xbox and all losses.

So since the 360 the E&D Division stands at about 1.449 billion to go before 360 is profitable.

The thing to note here though is that products come alone like the Kin (previous Q? or one before) and kill any profit. BUT the division is mostly made up of 360/Live.

Over the coming months with the revisions to the 360, Live price increase, Kinect (making a profit) and SW, the E&D division should make a killing, I estimate the 360 and E&D division to break even (since 360 launch) by calender year Q1 2012. Perhaps much sooner though tbh.

As for RRoD the loss was recorded in the 6/30/2007 report in the $1,892,000 amount. That is why the loss increased from the previous year.  The loss was recorded as a $1 billion set aside. In other words they stuck $1 billion into a account to be used to pay for the repairs of 360s that are sent in because of RRoD.  Not anywhere near the 3-5 billion previously mentioned in this thread.



Its libraries that sell systems not a single game.

Squilliam on 04 December 2010
Seece said:
Squilliam said:

Well I can't say when the Xbox 360 will be in the black because teasing that out of the division as a whole is impossible. Barring a specific announcement all we really have to work with is the whole EDD in the time period since the 360 released.

Based off the charts Seece made I would say they will be profitable before the end of 2011 given the fact that WP7 and Xbox 360 look to be doing even better than they ever have in recent memory. I would say in the end they would have made a nice 2B profit along with the massive investment in Live infrastructure which they can reap future benefits from.

Do you expect them to be profitable a lot sooner with the next console?

I don't expect them to post a loss with the next console given the fact they have huge legacy revenue from the Xbox 360 and that they won't lose as much per console as they did in this generation because it doesn't make sense to anymore to the same degree. They will also keep the Xbox 360 on the market whilst the next one is out, so I presume they'll have Arcades with Kinect for $199 and next boxe Arcades with Kinect 2 for $399 or thereabouts.



Tease.

Fumanchu on 04 December 2010

Like others have mentioned it's impossible to quantify using the EDD earnings reports.  It's still pretty crazy the Microsoft/Sony strategy damn near requires 60 million console sales and accessories before making up for losses.



Around the Network
Squilliam on 04 December 2010
Fumanchu said:

Like others have mentioned it's impossible to quantify using the EDD earnings reports.  It's still pretty crazy the Microsoft/Sony strategy damn near requires 60 million console sales and accessories before making up for losses.

Yeah very crazy. However the significant investment in their Live infrastructure will carry forwards. So whilst it isn't a balance book item as far as im aware im sure the value of the asset itself makes them profitable already.

Anyway it looks like the MS boss is on the same page as you:

MS Entertainment Division boss

The company’s Interactive Entertainment Business COO Dennis Durkin claimed: “It’s been a good three years for us. We’ve had nice stair steps in terms of growth every year sequentially getting bigger than the previous year, and this year is going to be our biggest year ever.”
With Kinect gaining strong sales the company is to focus on increasing profit: “I want to make money on things that we sell. I think the business of subsidizing things is a historical artifact. And so, for us, it’s about making money and extracting value for the things that we’re building. ”

http://www.thatvideogameblog.com/2010/12/02/microsoft-brand-2010-xboxs-biggest-year-ever/

So look to the Nextbox being profitable from day 0 or within 6 months.

 



Tease.

Seece on 04 December 2010
Squilliam said:
Fumanchu said:

Like others have mentioned it's impossible to quantify using the EDD earnings reports.  It's still pretty crazy the Microsoft/Sony strategy damn near requires 60 million console sales and accessories before making up for losses.

Yeah very crazy. However the significant investment in their Live infrastructure will carry forwards. So whilst it isn't a balance book item as far as im aware im sure the value of the asset itself makes them profitable already.

Anyway it looks like the MS boss is on the same page as you:

MS Entertainment Division boss

The company’s Interactive Entertainment Business COO Dennis Durkin claimed: “It’s been a good three years for us. We’ve had nice stair steps in terms of growth every year sequentially getting bigger than the previous year, and this year is going to be our biggest year ever.”
With Kinect gaining strong sales the company is to focus on increasing profit: “I want to make money on things that we sell. I think the business of subsidizing things is a historical artifact. And so, for us, it’s about making money and extracting value for the things that we’re building. ”

http://www.thatvideogameblog.com/2010/12/02/microsoft-brand-2010-xboxs-biggest-year-ever/

So look to the Nextbox being profitable from day 0 or within 6 months.

 

Yeah, 360 should sell well in America as well in its twilight years. I see it lasting the longest there out of the 3. So going into next gen that'll help.



 

endimion on 04 December 2010

i still wonder how it's gonna be next.... nintendo who toke a totally different approach, sony that is pushing tech that are not long lasting ones IMO at least not like DVD was.... and CPU GPU architectures become obsolete so fast I still think cell was a mistake for a console... great for super computers that will be in use for decades... but on a console using something that is standard and customize it is the way to go IMO not dev a techs just for it or as the main use for the massmarket...

they'll be stuck with BR and cell architecture for the next one if they want to keep backward compatibility....  or emulation gonna be a pain in the ass.... where MS will be able to have just a slim DVD drive a massive amount of SSD stockage space and just what's hot at the moment CPU GPU RAM wise etc.... looks to me that nintendo is doing there thing well to make massive money and then MS to build up on technology for the future at minimum cost....  unless sony integrates a PS3 or 4 to all their living room device in the future... they are in for a massive investment for a new one and will be forced to have a high price tag again....



Jlmadyson on 06 December 2010

They have been in the black for at least 3 fiscal years. Nearly 700 million made last year and no telling how much this year. That is a handy chart. It looks like the 360 itself will turn overall money in a year or two as this year is likely to be way bigger than last with Kinect.



Stinky on 07 December 2010
endimion said:

i still wonder how it's gonna be next....


MS has a fairly easy upgrade path; the 360 is a nice clean architecture that could be expanded simply by adding CPU cores, RAM and GPU shaders, while easily retaining bacwards compat. The system's bandwidth was state of the art at launch and retains parity even with current PCs.

I wouldn't be surprised if MS could launch profitable hardware from the start next time.