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Forums - Microsoft Discussion - How much money MS really made with the Xbox 360

As you may have noticed, I recently made a thrad about the PS3 and how much money Sony lost with it. Quite a few members said that the situation would be the same for the Xbox 360. So I checked the numbers MS reported since the launch of the Xbox 360 in 2005, which happend to be the FY 2006 for MS. Here are the results of the EDD (Entertainment and Devices division, which is mainly driven by the Xbox 360)

 

FY 2006: 1.262 billion USD Loss; Link: http://www.microsoft.com/investor/reports/ar06/staticversion/10k_fr_dis.html
FY 2007: 1.892 billion USD Loss; Link: http://www.microsoft.com/investor/reports/ar07/staticversion/10k_fr_dis.html
FY 2008: 426 million USD Profit; Link: http://www.microsoft.com/investor/reports/ar08/10k_fr_dis.html
FY 2009: 169 million USD Profit; Link: http://www.microsoft.com/investor/reports/ar09/10k_fr_dis.html
FY 2010: 679 million USD Profit; Link: http://www.microsoft.com/investor/reports/ar10/10k_fr_dis.html
FY 2011: 1.324 million USD Profit; Link: http://www.microsoft.com/investor/reports/ar11/financial_review/discussion_analysis.html
FY 2012: 364 million USD Profit; Link: http://www.microsoft.com/investor/reports/ar12/financial-review/discussion-analysis/index.html

FY 2013 Q1: 19 million USD Profit; Link: http://www.microsoft.com/Investor/EarningsAndFinancials/Earnings/FinancialStatements/FY13/Q1/SegmentRevenues.aspx
FY 2013 Q2: 596 million USD Profit; Link: http://www.microsoft.com/Investor/EarningsAndFinancials/Earnings/FinancialStatements/FY13/Q2/SegmentRevenues.aspx
FY 2013 Q3: 342 million USD Profit; Link: http://www.microsoft.com/Investor/EarningsAndFinancials/Earnings/FinancialStatements/FY13/Q3/SegmentRevenues.aspx

As you can see, the EDD posted an overall profit of 775 million USD and counting (R&D is not included!). But there is more to consider:

In FY 2007, MS spent 1 billion USD for the RRoD. So this is already included.
In FY 2012, MS cancels the Zune (HD), which was posting losses since it was released. The last Zune was released in 2009.
In FY 2011, MS canceled the Kin phone and paid somewhere between 200 million and 350 million USD for it.
In Q4 of FY 2012 MS began paying Nokia 250 million USD per Quarter for the Windows phone agreement for 1 year, 1 billion USD in total.
In FY 2012, Skype joined the EDD. Skype was bought May 2011. Former Skype CEO said that they are profitable, but the last annual report in 2010 posted a 7 million net loss. So it probably adds something to the profits, but not overwhelmingly much. yet.

So if you try to look at the Xbox 360 / Xbox Live business seperately, it easily sits at a very healthy 2 billion USD profit for this gen.



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DirtyP2002 said:

In FY 2007, MS spent 1 billion USD for the RRoD. So this is already included.

The rrod was NOT charged to EDD. It was an ADDITIONAL 1.1b charge NOT charged to the edd division. You know that and this has been discussed to death years ago, so why do you reapeat this again and again and again?

Again, it is completely pointless to single out "XBox360 is good" into the division results (which contained stuff like "Peripherals", which was hugely profitable in almost all years). You did the same nonsense in the "Blame it all on the PS3"-thread.. There is no way you can find out whether X360 has become  profitable or not, we simply do not have the numbers.



kowenicki said:
Whilst I applaud your efforts... its impossible to say with any accuracy. Which is why that post that is wheeled out at every opportunity from gaf is a load of old bollocks.

It IS possible to say thought the the xbox project is net profitable.

It has pretty much propped up the division in which it sits, which has had many other loss making products within it.

Ms are sticking with XBOX because XBOX makes them lots of money.


I know that every attempt will fail. Here is mine.



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Not as good an effort as your PS3 thread....



I'm on Twitter @DanneSandin!

Furthermore, I think VGChartz should add a "Like"-button.

drkohler said:
DirtyP2002 said:

In FY 2007, MS spent 1 billion USD for the RRoD. So this is already included.

The rrod was NOT charged to EDD. It was an ADDITIONAL 1.1b charge NOT charged to the edd division. You know that and this has been discussed to death years ago, so why do you reapeat this again and again and again?

Again, it is completely pointless to single out "XBox360 is good" into the division results (which contained stuff like "Peripherals", which was hugely profitable in almost all years). You did the same nonsense in the "Blame it all on the PS3"-thread.. There is no way you can find out whether X360 has become  profitable or not, we simply do not have the numbers.

1st: source? I can't find it in the annual report.

2nd: peripherals are mainly mouse and keyboards and probably reflect less than 10% of the entire division. And hugely profitable is quite a statement considering the world market leader for peripherals, Logitech, posted a whopping 70 million USD profit for the entire year.



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I think I will quote myself from another thread:

 "Xbox 360, the system that evolved gaming to the stage it allows you enjoy stocks going up"

Let's make another thread about how much money CoD made and remember its contribution to gaming.



DigitalDevilSummoner said:

I think I will quote myself from another thread:

 "Xbox 360, the system that evolved gaming to the stage it allows you enjoy stocks going up"

Let's make another thread about how much money CoD made and remember its contribution to gaming.


perhaps you shouldn't visit a site that is based on video game "sales" than. Being focused on sales also means we are more inclined to look at business and there stratigies, as it is also intersting. had we only cared about video games we would be on one of the many other video game forums, you know the ones that dont focus on sales and finacials.



Nokia has paid MS more back in licensing fees than the payments MS made to Nokia.



kowenicki said:
DigitalDevilSummoner said:

I think I will quote myself from another thread:

 "Xbox 360, the system that evolved gaming to the stage it allows you enjoy stocks going up"

Let's make another thread about how much money CoD made and remember its contribution to gaming.


Bull.

This site has many, many discussions about sales and revenues.  If you dont like it, dont comment or contirbute.

Really hate this kind of post.

Oh yeah ?

Wasn't this the guy just who tried to dance around the PS3's comeback as a gaming device, based on revenues that are in fact irrelevant to the actual gamer himself ?

I suppose I missed this site's rule where we only mix sales and their actual impact on the gaming industry whenever it suits us.



I have a question. Beyond that initial $1.2B write off for the RRoD, extending the warranty must have cost Microsoft hundreds of millions of dollars in the following years. It was still a subject that we were trained on when I worked with Microsoft last year, so it's still a cost factor internally. My question is, where does that extended cost show up? Are customer service and warranty losses debited against the gaming division?