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Forums - Microsoft Discussion - MSFT Game Division - 4Q ending June 2008 - Profit Projections

bumidan on 30 June 2008

For the Quarter Ending June 2008, here are my projections:

Revenue = 1.780 Billion

(based on shipping/selling 2.10 million consoles)

Profit = 100 Million

(Prediction with a projected variance of 5%)

This is including the other divisions like Zune and Windows Mobile and PC Games.

Profit and Revenue could be a little bit more if GTA4 significantly affected software sales and profitability.

Last Quarter:

Revenue = 1.576Billion

Profit = 89 Million

What are your projections?



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celine on 30 June 2008

Small profit.



 “In the entertainment business, there are only heaven and hell, and nothing in between and as soon as our customers bore of our products, we will crash.”  Hiroshi Yamauchi

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Venji on 30 June 2008

I would say 100 Million Profit is a pretty good prediction.



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jenny on 30 June 2008

They had no big money making releases this quarter. Rather, they had a price cut in Europe. Id say 50 million profit tops. Maybe less. And thats cause of the GTA 4 royalties.



bumidan on 30 June 2008

@jenny

Remember this division includes other products.

Zune (probably losing money)
Windows Mobile and Embedded
IPTV
PC Games
Consumer Retail and Hardware

I tried to take those into account as well, not just XBox Stuff



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starcraft on 01 July 2008

Some of those other products probably LOSE money for Microsoft. The Zune for example.

I can't think of a reason Microsoft's profit would be significantly less than last quarter.



starcraft - Playing Games = FUN, Talking about Games = SERIOUS

bumidan on 01 July 2008

Yes, most likely those other divisions lose money or just break even.

Zune probably lost $200 to $500 million last fiscal year.



mrstickball on 01 July 2008

I'm going to go with $75-$100m profit. Which would be good, considering the European pricedrop, and lack of 1st party SW.



Back from the dead, I'm afraid.

thx1139 on 01 July 2008

Not knowing the losses on other products in development in that division makes this tricky, but as for 360.

Cost to produce console should have continued to decline.
Price reduction in Europe will reduce some revenue and profit per console sale.
Increased console sales in Europe will increase software sales which will partially offset the lost revenue.
Looks like software in 4th qtr will really be a big increase signifigantly compared to 3rd quarter. Resulting in higher revenue and higher software profits. MS getting $10 per shipped copy of GTA4 is $60,000,000 right there.



Its libraries that sell systems not a single game.

bumidan on 01 July 2008

@ thx1139

Yup, it's hard because we do not have data on those other divisions.

Though we can infer based on past reports.

I think a slight profit is the case - about $100 million (as per my original post)

Note that for the past year, MSFT did mention that headcount (employees) were up between 15% to 20%. So even though sales and margins are going up, overall profit may not grow as much due to increased overhead and expenses (especially marketing, IMO).