By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Microsoft Discussion - XBOX 360 profitability - an analysis

Slimebeast on 16 May 2009

I really wish we could get clear numbers about the X360 revenue (or at least MS gaming). Is it ~$3 billion per year - or $6 billion per year (as people in this thread seem to believe, since 9 months were supposed to account for a massive $5 billion in gaming revenue)?

And profits would be fun to know as well of course, hehe.



Around the Network
BladeOfGod on 16 May 2009
thx1139 said:
BladeOfGod said:
heruamon said:
BladeOfGod said:
thx1139 said:
Bitmap Frogs said:
BladeOfGod said:
thx1139 said:
BladeOfGod said:
meh, its still not enough to cover all lost MS made with RROD and original Xbox. MS still lost over 9 billion on Xbox division

 

 9 million where you pulling that from. Is it that goofy adjusted for inflation number that has been floating around on VGChartz?

 

 

Oh sure evry time MS report a loss these numbers are ''goofy'' but when Sony report a loss those numbers are 100% right.

Anyway here's the link

http://www.vgchartz.com/forum/thread.php?id=57802&page=1

 

 

Exactly. 

 

Those numbers arent correct. For the division that includes the Xbox and Xbox 360.

FY2009 July 1, 2008 June 30, 2009  $179M Partial year
FY2008 July 1, 2007 June 30, 2008 $426M  
FY2007 July 1, 2006 June 30, 2007 ($1,969M) Includes $1M set aside for RRoD repairs. Zune released November 2006
FY2006 July 1, 2005 June 30, 2006 ($1,262M) Xbox 360 launch November 2005
FY2005 July 1, 2004 June 30, 2005 ($485M)  
FY2004 July 1, 2003 June 30, 2004 ($1,215M)  
FY2003 July 1, 2002 June 30, 2003 ($1,191M)  
FY2002 July 1, 2001 June 30, 2002 ($1,135M) Xbox launch November 2001

Then you need to look at what was in the divisions each year.  The division the Xbox has been in has included many other business that have been investments that through these years also operated at a loss. For instance Windows Mobile/Mobility has had 1 profitable year, in 2006 Mobile was its own division and showed its only profit when it made $2M.  Since 2006 Windows Mobile business has declined.  Other business that have been money sinks include Zune, MSN Internet Access, MSN Network Services, Embedded Systems, MS Surface, and Sales and Marketing expenses for retail operations for Office and Windows.

 

 

Those numbers in that theard were only about Xbox division. And how can you prove those numbers are wrong?

I am not saying 360 is not making profit but its not enough to cover all losses it made during past years

 

 

 Are you talking Xbox BRAND or the the xbox 360...because if you're talking Xbox brand, sure...360 hasn't made enough, but if you're talking Xbox 360, you're probably wrong.  The RROD repair plan was expensive, but what was the profit from Halo 3 alot?  Do the math and then when you're looking at the other first party and 3rd party games...whew. 

 

 

Ok, here's the math

Xbox 360 launch 2005 - $464,000,000 lost
Xbox 360 2006 - $1,329,000,000 lost
Xbox 360 2007- $2,016,000,000 lost

Xbox 360 2008 - 267,000,000 profit

You dont have to be genius to see that 360 is NOT profitable

Again where are you getting your numbers?   I went out to the Microsoft site and pulled the numbers from Microsoft Annual reports.  You are correct that the 360 has not yet made back its investment.  Yet it will. The same cant be said yet about the PS3.  The 360 has at least 4 more years of profitability to make back the investment and then some.

 

Microsoft Entertainment and Devices Division/Home and Entertainment/Consumer Software, Services, and Devices
SEC Filings
2006 - 2008 figures: "Calendar Year 2008 filings" - "Form 10-K" - PAGE 70 - "Entertainment and Devices Division"
2005 figures: "Calendar Year 2007 filings" - "Form 10-K" - PAGE 67 - "Entertainment and Devices Division"
2004 figures: "Calendar Year 2006 filings" - "Form 10-K" - PAGE 69 - "Home and Entertainment"
2003 figures: "Calendar Year 2005 filings" - "Form 10-K" - PAGE 66 - "Home and Entertainment"
2002 figures: "Calendar Year 2004 filings" - "Form 10-K" - PAGE 60 - "Home and Entertainment"
2000 - 2001 figures: "Calendar Year 2002 filings" - "Form 10-K" - PAGE 37 - "Consumer Software, Services, and Devices"


Yen to Dollar Rates
The fiscal year currency exchange averages were calculated using FXHistory. 


 

I think 360 will recover its losses in about 4 years, same with PS3



thx1139 on 16 May 2009

Those dont agree with what is on the MS site.



Its libraries that sell systems not a single game.

JaggedSac on 16 May 2009

Hey blade, are those numbers just for the XBox brand, or are they for entire divisions. If they are for the entire divisions, I do not think you get the point of this thread.



BladeOfGod on 16 May 2009
JaggedSac said:
Hey blade, are those numbers just for the XBox brand, or are they for entire divisions. If they are for the entire divisions, I do not think you get the point of this thread.

 

 Those are number from their entertaiment division i  think. But you dont have to be genius to realize that MS earned on their ENTIRE division (not only Xbox) 267,000,000 profit and lost MORE only on RROD. So not even profitable 360 and entire Microsoft entertaiment division earnings in their best year are not enought to cover only RROD



Around the Network
JaggedSac on 16 May 2009
BladeOfGod said:
JaggedSac said:
Hey blade, are those numbers just for the XBox brand, or are they for entire divisions. If they are for the entire divisions, I do not think you get the point of this thread.

 

 Those are number from their entertaiment division i  think. But you dont have to be genius to realize that MS earned on their ENTIRE division (not only Xbox) 267,000,000 profit and lost MORE only on RROD. So not even profitable 360 and entire Microsoft entertaiment division earnings in their best year are not enought to cover only RROD


Nope, you do not get the point of the thread.

scottie on 16 May 2009

Very well reasoned, but I'm not convinced.

Mostly due to the ambiguous 'cost of revenue' Is the 'cost of revenue' all of the costs that the 360 is incurring?



BladeOfGod on 16 May 2009
JaggedSac said:
BladeOfGod said:
JaggedSac said:
Hey blade, are those numbers just for the XBox brand, or are they for entire divisions. If they are for the entire divisions, I do not think you get the point of this thread.

 

 Those are number from their entertaiment division i  think. But you dont have to be genius to realize that MS earned on their ENTIRE division (not only Xbox) 267,000,000 profit and lost MORE only on RROD. So not even profitable 360 and entire Microsoft entertaiment division earnings in their best year are not enought to cover only RROD

 

Nope, you do not get the point of the thread.

 

You didnt get the point of my post.



thx1139 on 16 May 2009
scottie said:
Very well reasoned, but I'm not convinced.

Mostly due to the ambiguous 'cost of revenue' Is the 'cost of revenue' all of the costs that the 360 is incurring?

"cost of revenue" is really what the direct costs to produce the items that are purchased.

I run a consulting business and we have a similiar term "cost of sales" this is the direct cost of my consultants. Salaries and benefits. This does not include as weird as it sounds sales and marketing expenses or general and administrative expenses.

 



Its libraries that sell systems not a single game.

heruamon on 16 May 2009

This is starting to smell of a failing thread...becasue this analysis is going in moron territory.



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder