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

thranx on 21 April 2013
pokoko said:
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?


they put the 1 billion aside for the future cost of the failed devices, not for ones that had already failed, but also for the ones that were going to fail. So its already accounted for.



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pokoko on 21 April 2013
thranx said:
pokoko said:
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?


they put the 1 billion aside for the future cost of the failed devices, not for ones that had already failed, but also for the ones that were going to fail. So its already accounted for.

Even if that's true, I doubt it accounts for everything.  To Microsoft's credit, the upgrades they made to the 360 warranty service were major and dramatic, which means they were very expensive.  Adding repair staff, paying for shipping, fixing production problems, retraining customer service, even extending the warranty on repaired consoles.  As I said, it still accounts for costs, even today.  Also, I'm pretty sure that $1.2B write-off was retroactive, as I remember that people who paid for repairs were reimbursed.  This was a hugely expensive undertaking and there is no way they could have foreseen the total cost or pulled all the costs under one umbrella.  The truth is, we'll probably never know the final price tag.  All we can really know is that it was massive and likely impacted many departments.



thranx on 21 April 2013
pokoko said:
thranx said:
pokoko said:
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?


they put the 1 billion aside for the future cost of the failed devices, not for ones that had already failed, but also for the ones that were going to fail. So its already accounted for.

Even if that's true, I doubt it accounts for everything.  To Microsoft's credit, the upgrades they made to the 360 warranty service were major and dramatic, which means they were very expensive.  Adding repair staff, paying for shipping, fixing production problems, retraining customer service, even extending the warranty on repaired consoles.  As I said, it still accounts for costs, even today.  Also, I'm pretty sure that $1.2B write-off was retroactive, as I remember that people who paid for repairs were reimbursed.  This was a hugely expensive undertaking and there is no way they could have foreseen the total cost or pulled all the costs under one umbrella.  The truth is, we'll probably never know the final price tag.  All we can really know is that it was massive and likely impacted many departments.


yes they can. insurance accuraies would be able to tell them this info. that is what they do for stuff like this. that is most likely why they choose the number they did. MS has the failure % we do not, they also know the cost to repair. based off of that they can figure out the cost. I dont think it still accoutns for costs today, i dont see why it would, the extened warranty period ened long ago.



thismeintiel on 21 April 2013

What ridiculously biased drivel. You've done the exact opposite of what you did in the PS3. Where there you attributined every lose to the gaming division, even though it was merged with other divisions once the PS3 became profitable to hide losses elsewhere and it most likely contained the R&D for Blu-ray, here you have contributed every profit to the 360, even though it was merged in its first year with products that were profitable to hide extreme of 360 losses.

I mean you do realize that EDD contained/s Windows Embedded (this was removed in late 2010), Skype (added in 2011), and Windows Phone. The latter of which is probably responsible for much of the profit, as it also contains all of the profits MS makes off of phone patent licensing. Again, all of these were added to help hide 360 losses. 360 was not added to hide losses from them.  EDD may have made an overall profit, but I highly doubt that the 360 has.  And it sure as heck hasn't come close to covering the costs of the original Xbox.



 

pokoko on 21 April 2013
thranx said:
pokoko said:
thranx said:
pokoko said:
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?


they put the 1 billion aside for the future cost of the failed devices, not for ones that had already failed, but also for the ones that were going to fail. So its already accounted for.

Even if that's true, I doubt it accounts for everything.  To Microsoft's credit, the upgrades they made to the 360 warranty service were major and dramatic, which means they were very expensive.  Adding repair staff, paying for shipping, fixing production problems, retraining customer service, even extending the warranty on repaired consoles.  As I said, it still accounts for costs, even today.  Also, I'm pretty sure that $1.2B write-off was retroactive, as I remember that people who paid for repairs were reimbursed.  This was a hugely expensive undertaking and there is no way they could have foreseen the total cost or pulled all the costs under one umbrella.  The truth is, we'll probably never know the final price tag.  All we can really know is that it was massive and likely impacted many departments.


yes they can. insurance accuraies would be able to tell them this info. that is what they do for stuff like this. that is most likely why they choose the number they did. MS has the failure % we do not, they also know the cost to repair. based off of that they can figure out the cost. I dont think it still accoutns for costs today, i dont see why it would, the extened warranty period ened long ago.

We're just going to have to disagree here.  I don't see how you can accurately predict costs of that magnitude over a period of years.  The best you can do is an estimate, which you probably want to be conservative with.

As for costs today, as I said, it's still a subject that employees are trained in.  That's a cost.



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Turkish on 21 April 2013

What a horrible, misleading thread. Atleast change the title to Entertainment and Devices Division and stop bullshitting people with your bias.



Slimebeast on 21 April 2013

There is no denial, Xbox360 was insanely profitable. I think mostly due to Xbox Live, being the difference maker compared to the competition. The competition made a huge mistake in not charging for an online service.

But I think the competition earned lots of good-will and trust among core gamers in this gen, which may or may not pay off in next gen.



pokoko on 21 April 2013
kowenicki said:
pokoko said:
thranx said:
pokoko said:
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?


they put the 1 billion aside for the future cost of the failed devices, not for ones that had already failed, but also for the ones that were going to fail. So its already accounted for.

Even if that's true, I doubt it accounts for everything.  To Microsoft's credit, the upgrades they made to the 360 warranty service were major and dramatic, which means they were very expensive.  Adding repair staff, paying for shipping, fixing production problems, retraining customer service, even extending the warranty on repaired consoles.  As I said, it still accounts for costs, even today.  Also, I'm pretty sure that $1.2B write-off was retroactive, as I remember that people who paid for repairs were reimbursed.  This was a hugely expensive undertaking and there is no way they could have foreseen the total cost or pulled all the costs under one umbrella.  The truth is, we'll probably never know the final price tag.  All we can really know is that it was massive and likely impacted many departments.

yeah... thats why profits have increased almost relentlessly year on year for MS as a whole..

"Massive impact... many deparrtments"?   I doubt that.  But if you maintain that, what about the PS3?  Same situation? No?

I like that we are now moving into the realms of company profits....  I welcome that dicsussion.

I said nothing about the PS3 so I have no idea what you're talking about.  I also said nothing about Microsoft not making a profit, so again, I have no idea what you're talking about.  Looks like you're trying to drag this off-topic as best you can.  Why not just make your own thread for that?  It would make you look a good deal less petty than to keep repeating "I welcome that dicsussion" in threads about other subjects.



pokoko on 21 April 2013
kowenicki said:
pokoko said:
kowenicki said:
pokoko said:
thranx said:
pokoko said:
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?


they put the 1 billion aside for the future cost of the failed devices, not for ones that had already failed, but also for the ones that were going to fail. So its already accounted for.

Even if that's true, I doubt it accounts for everything.  To Microsoft's credit, the upgrades they made to the 360 warranty service were major and dramatic, which means they were very expensive.  Adding repair staff, paying for shipping, fixing production problems, retraining customer service, even extending the warranty on repaired consoles.  As I said, it still accounts for costs, even today.  Also, I'm pretty sure that $1.2B write-off was retroactive, as I remember that people who paid for repairs were reimbursed.  This was a hugely expensive undertaking and there is no way they could have foreseen the total cost or pulled all the costs under one umbrella.  The truth is, we'll probably never know the final price tag.  All we can really know is that it was massive and likely impacted many departments.

yeah... thats why profits have increased almost relentlessly year on year for MS as a whole..

"Massive impact... many deparrtments"?   I doubt that.  But if you maintain that, what about the PS3?  Same situation? No?

I like that we are now moving into the realms of company profits....  I welcome that dicsussion.

I said nothing about the PS3 so I have no idea what you're talking about.  I also said nothing about Microsoft not making a profit, so again, I have no idea what you're talking about.  Looks like you're trying to drag this off-topic as best you can.  Why not just make your own thread for that?  It would make you look a good deal less petty than to keep repeating "I welcome that dicsussion" in threads about other subjects.

you said it impacted many departments with no proof.  it didnt and couldnt. 

Really?  You don't think it did?  That's fine with me, I don't really care.  Just on a guess, though, I'd say the RRoD fiasco impacted manufacturing, repair, legal, public relations, shipping, warranty, and customer service.  That's just a guess off the top of my head, though.  If you say those departments had nothing to do with the policy and protocol changes stemming from the RRoD situation then it must be so.



mutantclown on 21 April 2013

The interesting question would be, what did they do with it?