http://vgchartz.com/news/news.php?id=588

a non-oil company making $4.3 bln a quarter... amazing.

well you have walmart number one company in revenue in the world in front of exxon.... (I said revenue not profit)

He was probably referring to the entertainment part of MS, which had $165mil in profits. 

165 mil is not bad, if they can double that at a certain point and keep it, heck could put a huge dent in their giant hole, then dont #$## up with the next console (terms of hardware failure, etc) then they might become truely profitable!

I think Microsoft's Entertainment and Devices Division will be profitable next quarter as well. The 360 will be selling for a profit (unless there's another price drop in the next month or two) and it looks like it'll be a great holiday season for game sales.

Sony should probably ask them what step 2 was.

The most important thing was:

#1. It was their most profitable H&E quarter, ever. With a cash-sink in the Zune, they still profited more than $70m more than the last profitable quarter they had, with Halo 2.

#2. They shipped 100% more consoles versus this quarter last year (0.9m vs. 1.8m). This shows they've cleared the warehouse/distribution channels, and are now shipping on-level with demand.

From now on, the key is being profitable due to more Halo sales (should double sales in the next 3 months vs. the 1 week Halo 3 launched @), and moving a crapload of profitable Xbox 360s. Thats the key. If they can ship 5-6m consoles this quarter, and make money on each one sold, they should maintain $50-150m of profits for the next 3 months.

@Mr Stick.... Just out of curiosity, how much "more" money to the bottom line will Microsoft realize in the holiday season due to the sheer number of software titles they are releasing that will sell like mad? I realize most are 3rd party and they don't make as much, but the royalty is still there. How many "units" of software did they move last year same quarter and how many will they move this one? What is the guess per unit? Isn't it something like $7-10 per unit or so? This is where I think MS will really do well this quarter as they have quite a lineup this fall and 360 attach rates are just nuts high. Also, how much of a drain was the zune on the bottom line?

Dangit, it didn't post what I had....

At any rate, Microsoft stands to make a large bit more this year in software vs. last year for the same quarter (last year, MS lost around $150m, but I would say most of that was due to the Zune launch).

A few numbers:

Last year, Microsoft had litterally no first party titles to sell, aside from Viva Pinata, and older Platinum titles, of which, Forza 2 is currently besting every title combined (and that doesn't include the profits MS is getting from PGR4 and the 2nd week onward of Halo 3).

Microsoft makes about $7 per software unit sold - that's less than Sony or Nintendo charge, at $10 each.

Having said that, with just 3 weeks in the books for October, this year has been oh-so much better than last year: first party sales are much, much higher (about 1.3m units in the US vs. 50,000)

Not only this, the overall software sales are incredibly higher: last year, the Xbox 360 only managed 1.3m units of software for the first 3 weeks. So far, Halo and PGR alone have managed the entire software sales in just 2 titles. The rest of the 3rd party sales have been a bit higher too (1.7m units in third party sales thus far, with only 1 major launch).

The Zune was a decent-sized drain, but now I would assume that it's probably treading water, and only draining a bit via marketing for the holidays.

Now, having said all this, I believe this year, with everything that's next, software-wise, is oh-so much better.

Last year, we had Madden 07, Marvel: UA, Gears, RSV, CoD3, Splinter Cell, Blue Dragon, and Viva Pinata for the major software-movers.

This year, we have Madden 08, Guitar Hero 3, Orange Box, Mass Effect, CoD4, Army of Two, Assassain's Creed, Ace Combat 6, Virtua Fighter 5, and Lost Odyssey. Not to mention vastly higher-selling titles (the first week of August featured only 300k s/w sales in holdovers last year, this year it was double that).

I would expect software sales on the X360 to be up by about 100% worldwide vs. last year. But more importantly: hardware and first party software should be up. Halo 3 still has alot of selling to do this Christmas. First Party sales should be up around 10x over last year (First Party sales might of accounted for 500,000 units last year. This year, expect 5m from LO, H3, VP:A, PGR4, and the leftovers) - and that's just US/JPY.


IMO, like last year, the attach rates are going to suffer, like they always do. Attach rates are never as blisteringly high as they are during the non-Holiday months. Last year, MS saw around a 5.0 attach rate over Christmas vs. a decently higher everytime else. But mind you, I'm talking a 5.0 over Nov-Dec for new buyers....That doesn't include old ones.