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Forums - Microsoft - Is MS's total investment in the 360, in the black?

TheRealMafoo on 25 June 2008
Aprisaiden said:
umm where are people getting the 1.5 billion in total losses from.

M$'s FY06 = 1.28 billion in losses. ( Thats 1st July 2005 - 31st June 2006)
M$'s FY07 = 1.89 billion in losses ( 1st july 2006 - 31st June 2007)
M$'s FY08(Q1-Q3) = approx 550 million in profit.

360 wasn't released till Q2 FY06. So Q1 profit / loss should count towards the Xbox not the 360.
M$ FY06 Q1 = 141 million in losses.

So M$'s losses on 360 in FY06 was 1.14 billion.
FY06 + FY07 losses = 3.03 billion.
(3.03 billion) + 0.55 = 2.48 billion.

Therefore Microsoft is 2.48 billion in the red on 360.

 

That doesn't include development costs does it? (those would have been before FY06)



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ymeaga1n on 25 June 2008
TheRealMafoo said:
JaggedSac said:
TheRealMafoo said:
TheBigFatJ said:
TheRealMafoo said:
I don't count the first XBox. That we should just write off as a loss, and start over.

If you feel you need to include previous gaming revenue, you would have to include PC gaming as well, and if you did that, they would already be out of the red, by tens of billions.

So the answer is 1.5 billion. Thanks :)

MS hasn't made that much in PC gaming. They don't get revenues for all windows released games, just their own. If you include PC gaming, MS is still in the red almost certainly.

Yes, of course you include the original Xbox. MS does -- they promised this generation would bring profit to the xbox division from the beginning. By itself, the 360 will probably never generate a profit overall, though.

 

Not to turn this into a Mac vs PC thread, but if you take gaming out of the equation, there is not a single reason to buy a PC over a Mac. Linux is not a bad solution either, if you can live with old versions of Office.

One of the things that keeps the PC industry where it is, is gaming. I just spent $750 on a new Gaming PC, and installed Vista. Apple does not have an alternative for me (as I type this on my Mac Book Pro).

It's hard to quantify how much gaming has meant to Microsoft, but it's a lot.

Wrong.  Businesses are M$'s main money market.  They are in heavily with businesses which is one of the main reasons why Windows is so bloated.  They must keep all businesses legacy code working with newer operating systems.  Other OSs do not have this problem.  Microsoft works very hard at helping businesses incorporate their software whereas other companies do not.  Apple does not have very good customer support for big businesses and quite honestly they do not care to.  They enjoy their market of trendy people and artists.  Gaming is a good way for the masses to keep with Windows but as long as businesses continue to develop and interate with Windows, M$ will continue to rake in the cash.

 

 

It's funny. The world changes very fast these days, but peoples perception of the market place does not. Apple is no longer the system for hippies and artists. It's a very powerful business machine. Many companies have moved to web apps for almost all of there internal applications. I am not sure if you work in an office, but if you do, how often do your employees use something other then a web browser, or an MS Office tool? Most people never do. The biggest issue that stands in the way of a company like Apple taking over the business world, is IT training.

Apple is already clost to 20% market share in the US, and that is not all homes.

Most people never use their office pcs for anything other than web browsing and ms offices?...are you serious? What about retail sales programs? Point of sales machines? Software which access the company database? Inventory programs? Accounting programs? The biggest problem is not IT training. If you wanted to attribute it to one major thing, it would be because business/enterprise software makers don't make software for MACs.

I have worked for 3 different small~medium size companies. And yes we did use webs apps, but that was a very very small part. Most companies do NOT use web apps...developing web apps is not cheap. Our third party software ran from our windows server database, which is the platform it was designed for. Client software was only made for windows. We ran a domain from a windows servers. We ran our mail system from an exchange server. Mail was checked using outlook.

You're crazy if you believe that Mac's can replace PC's in the work place.

 




Aprisaiden on 25 June 2008

@TheRealMafoo -- nope. R&D costs are immpossible to tell as they would of been factored into the Xbox's losses...

But its the same for PS3's 3.3 billion in losses - R&D is ignored...
And Wii's profits -- R&D costs are ignored. The gamecube / DS payed them off a long time ago ....



TheRealMafoo on 25 June 2008
ymeaga1n said:

Most people never use their office pcs for anything other than web browsing and ms offices?...are you serious? What about retail sales programs? Point of sales machines? Software which access the company database? Inventory programs? Accounting programs? The biggest problem is not IT training. If you wanted to attribute it to one major thing, it would be because business/enterprise software makers don't make software for MACs.

I have worked for 3 different small~medium size companies. And yes we did use webs apps, but that was a very very small part. Most companies do NOT use web apps...developing web apps is not cheap. Our third party software ran from our windows server database, which is the platform it was designed for. Client software was only made for windows. We ran a domain from a windows servers. We ran our mail system from an exchange server. Mail was checked using outlook.

You're crazy if you believe that Mac's can replace PC's in the work place.

 

 

The trend is web apps. I work for a small compact (120 million a year in sales), and we have moved all our internal apps to the web. I worked for CSC (multi-billion dollar company) for 7 years as a developer, and when I left three years ago, they were in the process of moving everything to the web. They probably have now.

In our company (350 employees), people use MS Office (Outlook, Word, Excel, PowerPoint), and a web browser for everything else. We could do that on a Mac (some of us do).

I am a .NET developer, so I need windows. We need IIS, so we need windows server, but all non-developers can use OSX in our company.

In fact, I think it would reduce costs for us by tens of thousands a year.



FaRmLaNd on 25 June 2008

The business I work for has moved entirely to macs except for the servers, which are running windows.



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MorgZ on 25 June 2008

Total investment in the 360 is in the red but M$ have a great chance of breaking even on the 360 if we write off the original Xbox losses.

I agree with a lot of posts here that say M$ has lost a trick by not trying to develop more and more top draw first party titles.



famousringo on 25 June 2008

All this talk of how much MS has lost or earned on the Xbox brand is severely clouded by the fact that its game division is rolled in with a lot of other products. Zune, peripherals, I can't even keep track of all the things that prevent me from keeping track of Xbox financials. :P



"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event."  — Mona Hamilton, Capcom Senior VP of Marketing
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shanbcn on 25 June 2008
RolStoppable said:
niksta2 said:
how much are the losses for the two xbox's combined?

Nearly $6 billion.

 

More like $8 billion+ $1 billion rrod.



Reasonable on 25 June 2008
TheRealMafoo said:
I don't count the first XBox. That we should just write off as a loss, and start over.

If you feel you need to include previous gaming revenue, you would have to include PC gaming as well, and if you did that, they would already be out of the red, by tens of billions.

So the answer is 1.5 billion. Thanks :)

 

I would count Xbox as I think the question should be has MS made any money from its entry to console market?  Obviously the answer is no.  Even if only looking at 360 the answer is no and they're probably $1.5B to $2B away counting development costs for console, initial losses, etc.

Like I said though I think Xbox and the whole console division is what should really be looked at though as it represents their true entry to console market and their initial success with Halo franchise.

With Sony losses on PS3 to date and MS never having seen a dime in total you've got to admire Nintendo, those guys have turned nothing but a profit throughout I believe, and at the moment they're just raking it in.



Try to be reasonable... its easier than you think...

Aprisaiden on 25 June 2008
famousringo said:
All this talk of how much MS has lost or earned on the Xbox brand is severely clouded by the fact that its game division is rolled in with a lot of other products. Zune, peripherals, I can't even keep track of all the things that prevent me from keeping track of Xbox financials. :P

 

Well i think its fair to say the Zune and Microsoft Game Studio's(PC-wise) and 1st party 360 peripherals are proberly profitable. Im sure that if those products were moved to their own division the profit/loss for 360 would be rather simaliar to now... I think the main reason Microsoft keeps all those products lumped together is for revenue reasons. How could 360 compete with Wii+DS or PS3+PS2+PSP revenue-wise.