CNBC's Jim Goldman has revisited Microsoft's recent figures... bear in mind that CNBC is an NBC news service and isn't MSNBC, the online news service jointly owned by Microsoft and General Motors/NBC. So, they're not related, not in the slightest, no way.
Jim points that, although Microsoft's Entertainment and Devices division (run by the always quotable Robbie Bach) made $357 million (£180.5m) profit for the three months to December 2007, we shouldn't forget its $3.06 billion (£1.5b) in revenue.
Jim spoke to Microsoft's chief financial officer (CFO), Chris Liddell, about the figures to get some more perspective, and was told, "...it's all about the "attach rate," the number of games and accessories consumers buy along with the console itself.
"We're now at a stage where we sell about seven games per console and that's a record certainly for any console and relative to history. So people are now actually spending more on the games and accessories than they are on the underlying console, so that business model that we put in place the last couple of years is certainly starting to fire."
According to Jim, "...and because of that, entertainment and devices is hardly a one-hit wonder: this hardware could become the gift that keeps on giving for Microsoft's bottom line".
Now for a slice more perspective, let's have a look at the headline to Jim's story and compare it to a few more headlines in his TechCheck column:
"Microsoft CFO Liddell Talks To Me About Jaw Dropping Earnings"
and some others:
"Microsoft Ready To Challenge Google? Yahoo? Both?" - January, 25th, 2008
"Microsoft Recession Proof? Could Be!" - Friday, 25 January 2008
"Google Plunges: So Just What's Going To Happen Next?" - Wednesday, 23 January 2008
Finally, this was Jim's take in November last year in a story called, "Microsoft's Xbox Issues: Just How Bad Are They?" regarding the admittedly weak Nunez class action suit based on Halo 3 'incompatibility'.
"Still, from a PR and competitive perspective, it has the potential of being a big issue, just as Xbox gets itself into the black after four years and billions in losses. Consumers and investors are watching carefully; almost as carefully as Nintendo and Sony.
UPDATE: More than 310,000 Xbox 360 consoles sold in the U.S. for the week of Nov. 18, including Black Friday, rounding out its third holiday season on the market. While Xbox 360 consoles continue to generate great consumer demand, the strength of the Xbox 360 ecosystem remains unmatched by any console on the market."
Just how is this kind of coverage actually providing any kind of insight into the industry? The Liddell quote regarding attach rate for Xbox 360 and its games should have been a valid and useful. However, the lack of supporting information (Aside from Liddell, are these figures supported by, for example, NPD data? What is the accessories to game split?) undermines them terribly. Combine this with the fact that they are enveloped in so much obvious pro-Microsoft 'opinion' and once again it's time for the 'mainstream' media to look to its basic principles before commenting out of hand and provides negative information.
Jim points that, although Microsoft's Entertainment and Devices division (run by the always quotable Robbie Bach) made $357 million (£180.5m) profit for the three months to December 2007, we shouldn't forget its $3.06 billion (£1.5b) in revenue.
Jim spoke to Microsoft's chief financial officer (CFO), Chris Liddell, about the figures to get some more perspective, and was told, "...it's all about the "attach rate," the number of games and accessories consumers buy along with the console itself.
"We're now at a stage where we sell about seven games per console and that's a record certainly for any console and relative to history. So people are now actually spending more on the games and accessories than they are on the underlying console, so that business model that we put in place the last couple of years is certainly starting to fire."
According to Jim, "...and because of that, entertainment and devices is hardly a one-hit wonder: this hardware could become the gift that keeps on giving for Microsoft's bottom line".
Now for a slice more perspective, let's have a look at the headline to Jim's story and compare it to a few more headlines in his TechCheck column:
"Microsoft CFO Liddell Talks To Me About Jaw Dropping Earnings"
and some others:
"Microsoft Ready To Challenge Google? Yahoo? Both?" - January, 25th, 2008
"Microsoft Recession Proof? Could Be!" - Friday, 25 January 2008
"Google Plunges: So Just What's Going To Happen Next?" - Wednesday, 23 January 2008
Finally, this was Jim's take in November last year in a story called, "Microsoft's Xbox Issues: Just How Bad Are They?" regarding the admittedly weak Nunez class action suit based on Halo 3 'incompatibility'.
"Still, from a PR and competitive perspective, it has the potential of being a big issue, just as Xbox gets itself into the black after four years and billions in losses. Consumers and investors are watching carefully; almost as carefully as Nintendo and Sony.
UPDATE: More than 310,000 Xbox 360 consoles sold in the U.S. for the week of Nov. 18, including Black Friday, rounding out its third holiday season on the market. While Xbox 360 consoles continue to generate great consumer demand, the strength of the Xbox 360 ecosystem remains unmatched by any console on the market."
Just how is this kind of coverage actually providing any kind of insight into the industry? The Liddell quote regarding attach rate for Xbox 360 and its games should have been a valid and useful. However, the lack of supporting information (Aside from Liddell, are these figures supported by, for example, NPD data? What is the accessories to game split?) undermines them terribly. Combine this with the fact that they are enveloped in so much obvious pro-Microsoft 'opinion' and once again it's time for the 'mainstream' media to look to its basic principles before commenting out of hand and provides negative information.
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Comments
SuperSaiyan4 30 Jan 2008 11:19
1/8
The Xbox 360 is doing fantastic and with the millions Microsoft have sold they have definently made a huge comeback since the old Xbox 1.
Dee Peay 30 Jan 2008 12:34
2/8
i own both the ps3 and xbox 360.
i noticed that the attach rate includes accessories and is, therefore, a very misleading statistic.
As we know, the most popular xbox 360 (the premium edition) is lacking much of the functionality that the PS3 has out of the box. I had to go out and buy several expensive extras including rechargeable batteries for the wireless controllers, proprietary HD cables and a (very over priced) wireless network adapter just to get the same "basic functionality" as the PS3. And so...
...ofcourse their attach rate is higher! Because the consumer is getting shafted. Only a company like Microsoft would brag about that.
i noticed that the attach rate includes accessories and is, therefore, a very misleading statistic.
As we know, the most popular xbox 360 (the premium edition) is lacking much of the functionality that the PS3 has out of the box. I had to go out and buy several expensive extras including rechargeable batteries for the wireless controllers, proprietary HD cables and a (very over priced) wireless network adapter just to get the same "basic functionality" as the PS3. And so...
...ofcourse their attach rate is higher! Because the consumer is getting shafted. Only a company like Microsoft would brag about that.
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SuperSaiyan4 30 Jan 2008 13:21
3/8
No its all about 'choice' Sony dont give you that 'choice' instead they bungled it all up by including all the hardware at a price point that many could not afford and leaving out the most important thing...HD cables...
I will agree that the hard drive and wireless adaptor are over priced other than that the Xbox 360 is more capable as a gaming console offline and online than the PS3.
The Xbox 360 has far more games, more exclusives, more Japanese support this gen, has now got once PS games and once PS exclusives as its own exclusive like Ace Combat 6 and the famous Ridge Racer finally on the 360 as well.
Overall the 360 offers you everything you need out of the box for HD gaming it even has its own headset with the Premium and Elite options.
The Xbox 360 is a dedicated gaming console along with adding entertainment features that are soo well networked you are always signed in, unlike with the PS3 that signs you out when watching movies.
I will agree that the hard drive and wireless adaptor are over priced other than that the Xbox 360 is more capable as a gaming console offline and online than the PS3.
The Xbox 360 has far more games, more exclusives, more Japanese support this gen, has now got once PS games and once PS exclusives as its own exclusive like Ace Combat 6 and the famous Ridge Racer finally on the 360 as well.
Overall the 360 offers you everything you need out of the box for HD gaming it even has its own headset with the Premium and Elite options.
The Xbox 360 is a dedicated gaming console along with adding entertainment features that are soo well networked you are always signed in, unlike with the PS3 that signs you out when watching movies.
icanseeu 30 Jan 2008 13:45
4/8
SuperSaiyan4 wrote:
No its all about 'choice' Sony dont give you that 'choice' instead they bungled it all up by including all the hardware at a price point that many could not afford and leaving out the most important thing...HD cables...
I will agree that the hard drive and wireless adaptor are over priced other than that the Xbox 360 is more capable as a gaming console offline and online than the PS3.
The Xbox 360 has far more games, more exclusives, more Japanese support this gen, has now got once PS games and once PS exclusives as its own exclusive like Ace Combat 6 and the famous Ridge Racer finally on the 360 as well.
Overall the 360 offers you everything you need out of the box for HD gaming it even has its own headset with the Premium and Elite options.
The Xbox 360 is a dedicated gaming console along with adding entertainment features that are soo well networked you are always signed in, unlike with the PS3 that signs you out when watching movies.
I will agree that the hard drive and wireless adaptor are over priced other than that the Xbox 360 is more capable as a gaming console offline and online than the PS3.
The Xbox 360 has far more games, more exclusives, more Japanese support this gen, has now got once PS games and once PS exclusives as its own exclusive like Ace Combat 6 and the famous Ridge Racer finally on the 360 as well.
Overall the 360 offers you everything you need out of the box for HD gaming it even has its own headset with the Premium and Elite options.
The Xbox 360 is a dedicated gaming console along with adding entertainment features that are soo well networked you are always signed in, unlike with the PS3 that signs you out when watching movies.
The "choice" to only be able to upgrade your harddrive by using a expensive microsoft made one, unlike the ps3 which lets you buy any!
king skins 30 Jan 2008 14:01
5/8
icanseeu wrote:
The "choice" to only be able to upgrade your harddrive by using a expensive microsoft made one, unlike the ps3 which lets you buy any!
As a point of interest, is your warranty still valid if you use the 3rd part HDD or even if you upgrade it?
alexh2o 30 Jan 2008 14:14
6/8
Of topic but the girl in the picture that spong has used (along with xbox.com), is in fact my best mates sister. Wierds me out seeing her there. Oh and no she doesnt play 360...
dee peay 31 Jan 2008 09:51
7/8
king skins wrote:
icanseeu wrote:
The "choice" to only be able to upgrade your harddrive by using a expensive microsoft made one, unlike the ps3 which lets you buy any!
As a point of interest, is your warranty still valid if you use the 3rd part HDD or even if you upgrade it?
Doesn't invalidate your warranty. Sony even have a illustrated guide on their website.
dee peay 31 Jan 2008 09:55
8/8
I wont disagree with you, but i do think my point still holds:
its misleading to compare the attach rate between the three consoles if Microsoft are going to count hardware that Sony and Nintendo provide as standard.
from a consumer perspective that is. (im sure the retailers are very happy about it)
its misleading to compare the attach rate between the three consoles if Microsoft are going to count hardware that Sony and Nintendo provide as standard.
from a consumer perspective that is. (im sure the retailers are very happy about it)
SuperSaiyan4 wrote:
No its all about 'choice' Sony dont give you that 'choice' instead they bungled it all up by including all the hardware at a price point that many could not afford and leaving out the most important thing...HD cables...
I will agree that the hard drive and wireless adaptor are over priced other than that the Xbox 360 is more capable as a gaming console offline and online than the PS3.
The Xbox 360 has far more games, more exclusives, more Japanese support this gen, has now got once PS games and once PS exclusives as its own exclusive like Ace Combat 6 and the famous Ridge Racer finally on the 360 as well.
Overall the 360 offers you everything you need out of the box for HD gaming it even has its own headset with the Premium and Elite options.
The Xbox 360 is a dedicated gaming console along with adding entertainment features that are soo well networked you are always signed in, unlike with the PS3 that signs you out when watching movies.
I will agree that the hard drive and wireless adaptor are over priced other than that the Xbox 360 is more capable as a gaming console offline and online than the PS3.
The Xbox 360 has far more games, more exclusives, more Japanese support this gen, has now got once PS games and once PS exclusives as its own exclusive like Ace Combat 6 and the famous Ridge Racer finally on the 360 as well.
Overall the 360 offers you everything you need out of the box for HD gaming it even has its own headset with the Premium and Elite options.
The Xbox 360 is a dedicated gaming console along with adding entertainment features that are soo well networked you are always signed in, unlike with the PS3 that signs you out when watching movies.