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Forums - Sales Discussion - Microsoft Entertainment Posts $130 million Loss in Q4 2009 : is the 360 in trouble ?

Dark Chaos on 26 July 2009
mario64 said:
@NJ5 : the difference is MS is a company which used to report a big growth in profit. Now it's just struggling to break even.

The other companies don't have Windows or Office as cash cows and they already report better numbers... The problem is those cash cows were the only things working at MS, and now they're starting to decline too.

Wait didnt SONY have a cash cow too in the Playstation brand??? How did that work out?? Oh wait they are losing money on it.

 



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thx1139 on 26 July 2009
mario64 said:
Nobody said MS was doomed. It's still obviously a very profitable company. Nobody contests that.

It's just the pace of the decline (-30% revenue) is slightly worrying, and even more worrying is the loss of market share in their core software businesses (OS, browsers, office...). Nothing more, nothing less.

When General Motors started declining, nobody saw anything either, everybody said they would stay the number one, yet today they reached bankrupcy... What matter is the trend.

Boy are you wrong. Plenty of people saw problems with US car manufacturers and thier continuing trying to live off of big Car,  big SUV and big trucks.

As for MS core software business. They still own nearly 90% of the OS market.  70% of browser market (and more importantly nearly 100% inside corporate walls. My firm develops business software and rarely do we have to concern ourselves with browsers other than IE).  Server software MS is also doing bang up business. The only are of our business growing in this economy is MS SharePoint and related techologies (well actually MS Silverlight is growing as well and this is also driving MS Server needs). SharePoint is a part of Office 2007 and requires Windows Servers.  We only develop software so we dont implement office desktop or operating systems.  Yet we only have to concern ourselves with MS Office and Windows for integration, except occasionally marketing departments need us to support Mac.



Its libraries that sell systems not a single game.

badgenome on 26 July 2009
mario64 said:
@NJ5 : the difference is MS is a company which used to report a big growth in profit. Now it's just struggling to break even.

I used to struggle to take you seriously. Now I can't even be bothered.



Ajax on 26 July 2009

This loss is not huge at all.



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CatFangs806 on 26 July 2009

Well, Sony is losing even more and the PS3 is still going, so the 360 is not in hot water at the moment.



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mario64 on 26 July 2009

break even in growth I mean.

English is not my native language.

Growth used to be great every year, now they're struggling to even reach zero growth...

Of course MS still makes money, they've got Windows and Office...



NJ5 on 26 July 2009

How is it possible to grow profits when revenues are down 10-30%, as in most companies these days?

Some companies may be able to do it, but those are rare exceptions, achieved by massive layoffs and other cost cutting.

Your complaints about Microsoft are unreasonable.



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sinha on 26 July 2009
thx1139 said:

Read the detailed report about the EDD division. It is clear the 360 is profitable.

Some numbers from it.

Loss was $130M

100K less 360 consoles shipped compared to last year in same qtr.

non-gaming revenue decreased by $291M compared to a year ago. Again that is non-gaming.

360 platform and PC game software revenue decreased by $110M. 100K consoles would be around $20M of that revenue.

Cost of sales (product production costs) declined $266M compared to a year ago. Primarily due to declines in 360 production costs (part of that would be the 100K fewer consoles sold).

This is the first time I have noticed them call out non-gaming revenue.  I believe this is because they want analyst to understand the 360 is the profit making part of that division. Zune is losing money but investing heavily with ZuneHD. Mobile platform is being hammered by the iPhone and is investing heavily so as not to disapear from the market.



We don't provide the 'easy to program for' console that they [developers] want, because 'easy to program for' means that anybody will be able to take advantage of pretty much what the hardware can do, so the question is what do you do for the rest of the nine and half years? It's a learning process. - SCEI president Kaz Hirai

It's a virus where you buy it and you play it with your friends and they're like, "Oh my God that's so cool, I'm gonna go buy it." So you stop playing it after two months, but they buy it and they stop playing it after two months but they've showed it to someone else who then go out and buy it and so on. Everyone I know bought one and nobody turns it on. - Epic Games president Mike Capps

We have a real culture of thrift. The goal that I had in bringing a lot of the packaged goods folks into Activision about 10 years ago was to take all the fun out of making video games. - Activision CEO Bobby Kotick

 

thx1139 on 26 July 2009
mario64 said:
break even in growth I mean.

English is not my native language.

Growth used to be great every year, now they're struggling to even reach zero growth...

Of course MS still makes money, they've got Windows and Office...


Are you ignoring the economy we have today? Companies are regaining and staying profitable now by massivly cutting costs not because they are selling more?  Lets repeat again the economy today is the worst we have had in 70 years. 



Its libraries that sell systems not a single game.

snyperdud on 26 July 2009

Regardless of the loss, the 360 isn't going away anytime soon. This is a very small amount for Microsoft.



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