Microsoft Profits Up - Xbox Haemorrhaging Cash
Bill Gates, erm, Steve Balmer, is happy today. News just in from Microsoft.
Despite various analysts sitting eyeing up the company like it was financial carrion, Microsoft has just posted record profits for its third financial quarter ending March 31st.
However, the PC and Xbox division (or, to give it its full, slightly sinister Kafkaesque name ‘the Entertainment and Devices division’) continues to haemorrhage cash like the turn-of-the-millennium online bust had never actually ended.
Are the words of Forbes magazine columnist, which we reported last week, sounding a little less like the gibberings of a man who has never seen a console in his life, and more like a wake-up call?
Overall revenue for the quarter ending March 31st was up 32 percent on last year at an impressive $14.4 billion (£7.2b), with new shonky OS Vista and Microsoft Office largely responsible for the increase.
Revenue for the Entertainment and Devices Divisions in the same quarter fell by over 20 per cent to a mere $929 million ($465m), with an operating loss of $315 million (£158m), attributed to a the declining rate of Xbox 360 sales, in the wake of the recent Wii and PS3 launches.
The company shifted 500,000 360s in the last quarter of the financial year, compared to 1.7 million in the same quarter last year.
Xbox 360’s worldwide shipments have now reached 11 million.
[b]Source: MCV
[/b]
However, the PC and Xbox division (or, to give it its full, slightly sinister Kafkaesque name ‘the Entertainment and Devices division’) continues to haemorrhage cash like the turn-of-the-millennium online bust had never actually ended.
Are the words of Forbes magazine columnist, which we reported last week, sounding a little less like the gibberings of a man who has never seen a console in his life, and more like a wake-up call?
Overall revenue for the quarter ending March 31st was up 32 percent on last year at an impressive $14.4 billion (£7.2b), with new shonky OS Vista and Microsoft Office largely responsible for the increase.
Revenue for the Entertainment and Devices Divisions in the same quarter fell by over 20 per cent to a mere $929 million ($465m), with an operating loss of $315 million (£158m), attributed to a the declining rate of Xbox 360 sales, in the wake of the recent Wii and PS3 launches.
The company shifted 500,000 360s in the last quarter of the financial year, compared to 1.7 million in the same quarter last year.
Xbox 360’s worldwide shipments have now reached 11 million.
[b]Source: MCV
[/b]
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Comments
Knowledgeispower 27 Apr 2007 11:02
1/6
$315M and $929M aren't that horrible. Its a cost of business to continue to be relevant.
tyrion 27 Apr 2007 13:05
2/6
Knowledgeispower wrote:
$315M and $929M aren't that horrible. Its a cost of business to continue to be relevant.
A $315M loss in a quarter isn't horrible? You're right, it's atrocious!
That's a loss of $1.26B in a year. There are over 40 countries in the world that don't have a GDP that high.
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Nonac 27 Apr 2007 19:40
3/6
Not a $929M loss
fell by over 20 percent to a mere $929 million
fell by over 20 percent to a mere $929 million
alexh2o 27 Apr 2007 20:34
4/6
As Ive said before, this loss is for the entire division! That includes IPTV, Windows Mobile and Zune along with the Xbox. Xbox actually makes the money, its all the other crap thats costing them so dearly!
Plus its still early days for the 360. I doubt Sony's Playstion division will be making money this time next year.
Plus its still early days for the 360. I doubt Sony's Playstion division will be making money this time next year.
soanso 28 Apr 2007 01:05
5/6
Microsoft's Xbox division has always reminded me of Abramovich's Chelsea. Spending cash like there's not tomorrow and buying all sort of big name players. Veron, Crespo, Shevchenko, Ballack. All of them the wrong players when spending money on the likes of Henry, Gerrard and Ronaldo would have been wiser choices. (steal your nearest rivals best players of course)
It's just like how they bought Rareware, Lionhead and neither of them has come up with vey much at all.
If sales in Japan were the critical factor for them to actually make profit then as I said in a post a few years ago on here they should have bought Square-Enix and made the Dragon Quest and FF games Xbox exclusive.
If you want to build something from the ground up and are happy to spend limitless resources doing so then on you go, if you want to splash some cash and get instant return then I think my way is the way to do it.
But hey, I'm neither the CEO of a multinational software company nor chairman of a football club so what do I know about it all! ;)
It's just like how they bought Rareware, Lionhead and neither of them has come up with vey much at all.
If sales in Japan were the critical factor for them to actually make profit then as I said in a post a few years ago on here they should have bought Square-Enix and made the Dragon Quest and FF games Xbox exclusive.
If you want to build something from the ground up and are happy to spend limitless resources doing so then on you go, if you want to splash some cash and get instant return then I think my way is the way to do it.
But hey, I'm neither the CEO of a multinational software company nor chairman of a football club so what do I know about it all! ;)
tyrion 28 Apr 2007 11:52
6/6
Nonac wrote:
Not a $929M loss
fell by over 20 percent to a mere $929 million
fell by over 20 percent to a mere $929 million
It was revenues that fell to $929M. That's money in through the door. When combined with the costs involved with money going out the door, the division was left with a $315M loss.