Xbox Divison FY06 Stats

Talez · Post by **Talez** » 15 Oct 2006 11:03 pm

I can't believe I let this one slip by!

Looks like the ring of light isn't the only thing red these days

So. How did it do?

US$1.2 billion in the red. For one year.

Madmya · Post by **Madmya** » 15 Oct 2006 11:23 pm

jizzlobber · Post by **jizzlobber** » 16 Oct 2006 01:16 am

those numbers don't suprise me, it's the first year of a new system, from july 2005 to july 2006 they have put money into R&D, advertising, manufacturing and selling the system at a loss... there's no avoiding this.

but you already knew this, didn't you?

Sonic Jam · Post by **Sonic Jam** » 16 Oct 2006 04:04 am

They lost similar ammounts per year on the XBOX, even though it outperformed the Cube worldwide (And Nintendo made shitloads on that "failure" as I recall).

The XBOX division either doesn't know how to make money, or never had any intention to do so..

It essentially exists to protect Microsofts other interests (You know, the one that makes them such an incredibly fucking rich company) down the line so that one day hundreds of millions of people don't start using alternative software for their home computing via the latest Playstation or Nintendo console or whoever else wants to rule the living room.

If this is news to anyone I'm pretty shocked. And realistically these kinds of losses are minimal vs the overall financial state of MS for that year if it means in 10 years they don't lose control of the markets that are really important to them.

Talez · Post by **Talez** » 16 Oct 2006 08:54 am

Jismlobber wrote:those numbers don't suprise me, it's the first year of a new system, from july 2005 to july 2006 they have put money into R&D, advertising, manufacturing and selling the system at a loss... there's no avoiding this.

but you already knew this, didn't you?

Did you know Microsoft has lost a US billion a year on the Xbox since its launched? You know, those other years when they haven't put money into R&D, advertising, manufacturing and selling the system at a loss... Oh wait

Texas · Post by **Texas** » 16 Oct 2006 09:22 am

Talez wrote: Did you know Microsoft has lost a US billion a year on the Xbox since its launched? You know, those other years when they haven't put money into R&D, advertising, manufacturing and selling the system at a loss... Oh wait

Hmmm... and all that money being lost is putting such a dent into their cash reserves, isnt it?

Even if this is a troll,Talez, I'd expect you to at least understand what a loss leader is, yeah?

Talez · Post by **Talez** » 16 Oct 2006 09:46 am

Loss leaders usually don't remain loss leaders for an entire generation. Most people would consider losing money hand over fist, year after year a bad venture

I suppose when you have 40 billion in cash you can let a billion here and there slide

lestat · Post by **lestat** » 16 Oct 2006 09:58 am

Talez ms on several occasions have said that xbox is a defensive strategy for their core business. Besides first year always rack up big losses, they have said on numerous occasions that the 360 hardware and all the ip they own in the machine is meant to heavily reduce in cost for them, greatly reducing the losses hardware sales incur. So we'll see if that holds true for them. M$ i think just want to break even on 360. If they can manage that it's good overall for their business.

Sony will be loosing a tonne of money when ps3 launches too, actually several analysts are predicting that sony won't be able to claw back the losses for 3-5 years after the machines launches. But unlike ms sony greatly relies on their games division turning a profit. So I'd be more worried about sony loses then ms.

The only company that will be making profit straight away is nintendo, with their overpriced GC turbo. But of course when you ship last gen hardware at next gen prices, you're definitely guaranteed to make some coin straight away.

Kabal · Post by **Kabal** » 16 Oct 2006 10:06 am

Why should we be caring if MS is willing to throw away money to give us a great game system?

Talez · Post by **Talez** » 16 Oct 2006 10:53 am

We should be welcoming them as liberators and shower them with flowers

Peppermint Lounge · Post by **Peppermint Lounge** » 16 Oct 2006 12:38 pm

lestat wrote:Talez ms on several occasions have said that xbox is a defensive strategy for their core business. Besides first year always rack up big losses, they have said on numerous occasions that the 360 hardware and all the ip they own in the machine is meant to heavily reduce in cost for them, greatly reducing the losses hardware sales incur. So we'll see if that holds true for them. M$ i think just want to break even on 360. If they can manage that it's good overall for their business.

As someone who in the past has shown an interest in how vendors impact the industry how do you feel about MS's reasons for entering the industry and the way they do business?

lestat · Post by **lestat** » 16 Oct 2006 01:35 pm

I wouldn't want ms being in a totally dominant position Pep. I've always said the ideal outcome is for the market share to be split. The competition keeps both sides driven and ultimately means we get the best we possibly can get.

Peppermint Lounge · Post by **Peppermint Lounge** » 16 Oct 2006 02:28 pm

I hope that's how it turns out but MS or rather XBox is conspicuous in that it's still financially shithouse years down the track. Hopefully MS are using their financial muscle to eventually turn xbox into a viable subsidary rather than wage a war of attrition with a view to eliminating or acquiring comeptitors.

lestat · Post by **lestat** » 16 Oct 2006 02:50 pm

I think Nintendo realised that the razor blade model may not work anymore in future. Sony has sunk 4 billion into cell, projected to loose 1-2billion in the first 6-12months with ps3, sony is gambling a lot with bluray. The r&d and resources needed to push things to the next level are really spiraling up to the point where royalties on software may not cut it.

I think the only company that will come out of this gen with a healthy p&l will be Nintendo. They may not become market share leader but every unit sold is money in the bank for them and has little risk, not to mention their software usually sells extremely well.

Talez · Post by **Talez** » 16 Oct 2006 03:36 pm

Don't forget the rebuying of the Wii when they release it in Black.

Froggy · Post by **Froggy** » 16 Oct 2006 04:31 pm

and with a handle

Pat · Post by **Pat** » 16 Oct 2006 04:56 pm

Talez wrote:
Jismlobber wrote:those numbers don't suprise me, it's the first year of a new system, from july 2005 to july 2006 they have put money into R&D, advertising, manufacturing and selling the system at a loss... there's no avoiding this.

but you already knew this, didn't you?
Did you know Microsoft has lost a US billion a year on the Xbox since its launched? You know, those other years when they haven't put money into R&D, advertising, manufacturing and selling the system at a loss... Oh wait

You do know why yeah?

A loss in the console market that slows/stops Sony from hitting MS in the pc software market is their plan. If XBox loses a few billion, big deal. If XBox acts as a buffer protecting their Windows platform, worth many billions more - it's a good investment.

As for Nintendo - nothing is threatening their Pokemon market so they will do whatever the fuck they like.

Pat · Post by **Pat** » 16 Oct 2006 04:57 pm

Talez wrote:Don't forget the rebuying of the Wii when they release it in Black.

I want the red and lime green ones.

selfish · Post by **selfish** » 16 Oct 2006 06:08 pm

i can't wait for the wii SP - now with headphone jacks in the controllers!

Sonic Jam · Post by **Sonic Jam** » 16 Oct 2006 06:16 pm

Honestly, I'd like a Wii HD update, like the Gameboy Colour did for old Gameboy games the Wii HD could output 720p Wii games.

After so many months with a 360 I'm really used to HD everything. Do it Nintendo.

selfish · Post by **selfish** » 16 Oct 2006 08:59 pm

i don't know if we'll see it until the wii is pretty much dead, like the nes update (with dogbone controllers)