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Forums - Sales Discussion - Can Microsoft afford another price cut??? erm NO

Once again, all I know is i forsee Epic threads when the price Cut hits and then epic threads when Septembers NPD is releads. I can see April and july being relived once again. How entertaining.



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twesterm said:
Right, because you truly know everything and MS doesn't have piles of money.

 

I can't believe it took 6 posts for Obie to get wtf-pwnd.

Obie, you should know, it's nice owning a console that doesn't have a bottom line of "Profit."

As consumers, we don't get the profit. We do get the benefit of that spent profit.

Microsoft is building a fanbase, just like Sony did. I can barely believe it, but I'm starting to really get behind this idea of "spend what we have to, in order to get more 3rd party games and services to our customers."

Call me crazy, but I like it better than "Sony won't spend any more money on 3rd party exclusives. We're trying to make a profit here."

If Sony could have just put some JRPGs out in its first year, then I wouldn't have had to cheat, and eventually leave her for the younger woman.



I don't need your console war.
It feeds the rich while it buries the poor.
You're power hungry, spinnin' stories, and bein' graphics whores.
I don't need your console war.

NO NO, NO NO NO.

i except overtracking.



What I was trying to get at with past price drop is that it increased the sales of 360 to the point that Microsoft(who was then fixing production problems) couldn't keep up with the demands. The lack of 360 fueled a large momentum swing in Sony's favor. Microsoft is fighting tooth and nail not only to push past the Sony brand name, but to push past their own company's name. I expect that more than a few savy gamers who haven't picked up a 360 yet will get an arcade pack and pick up a used 20 gig for a few bucks. I also read someone say the 60 gig has been selling for 300 for a while... that would be untrue... hell it'll sell for 350 until midnight on the 4th in most stores.



Hope all 360 models can come to the price around $100.
then i will gonna to buy it, a few of it.



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badgenome said:
DMeisterJ said:
Oh, so since Microsoft doesn't have a separate division just for games, we don't count it?

That's fair.

So because they don't differentiate between, say, the Xbox and the Zune in their financial report, we assume whatever we want?

That's fair.

 

 

I think its pretty damn clear that the Zune is not making tons of money... actually neither does the 360 :P



Vote the Mayor for Mayor!

Gobias said:
Remember how Microsoft is over 6 billion dollars in the red in their gaming division?


Good times.

 

Meanwhile, over the same time period Microsoft as a whole has posted $77.653 billion in profit:

2002 $5.355
2003 $7.531
2004 $8.168
2005 $12.254
2006 $12.599
2007 $14.065
2008 $17.681

Seriously, Microsoft isn't hurting, and neither are their investors. Even if they find it impossible to make a profit in the console gaming industry, they won't be forced to leave for monetary reasons. They'll only leave if they no longer see the Playstation as a threat to Windows. However, the way things look now they have the potential to break even on the 360, and make a profit on the 360's successor.



twesterm said:
Right, because you truly know everything and MS doesn't have piles of money.

 

ermm didn't he mean the XBOX devision rather MS as a whole?! :s 

Cuz if so, the same can be said for SONY making money on all other sectors where tehy have profited from BR and CCell and their other HD products :S



Microsoft (MSFT) Cuts Xbox Price, Damns Nintendo

MsftMicrosoft (MSFT) has decided that it would rather be the video game market share leader than make a buck at the business.

Redmond cut the price of its Xbox 360 to $199. That drops it from its previous sticker of $279. The action may take some business away from the Sony (SNE) PS3, but it is more clearly aimed at market leader Nintendo which has remained in the front spot for months with its $250 Wii.

According to MarketWatch, "This is a smart move by Microsoft ahead of the holidays, as this makes them the price leader," said Colin Sebastian of Lazard Capital Markets.

There is also a very good chance that the move will put the Microsoft device division back into the red. It struggled for years to make money.

In the fiscal year ending in July, Microsoft made $426 million on $8.1 billion in revenue in the unit it calls "entertainment and devices". It lost a total of $2.3 billion in the operation over the previous two years.

Some of the improvement in revenue at Microsoft's Xbox empire came from games, primarily Halo 3. It is not at all clear that this income can offset such a huge price drop for the Xbox game console.

Microsoft has never been against losing money to weaken competition. With the holidays coming, it has a chance to best it two large rivals.


The move puts Sony in a tough spot. It has been counting on a resurrection of its games division to help improve the company's multi-year lackluster earnings performance.

With cash still pouring from its software operations, Microsoft can afford to wage a price war in the video game market.


24/7 Wall St.



^ All that says is MS can always afford to make a price cut. For god's sake it's MS. But there's still a limit.

I dont agree with the topic title, but I do think at some point, MS would be losing so much on every console that they might as well cut their losses and bow out of the game business.


Am I saying that's going to happen? Very, very unlikely. I'm just pointing out that, while the article makes it (correctly) seem like MS has bottomless pockets, at some point it wouldn't be worth it for them to stay in the game.




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