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Microsoft XBox (Games)

Rare Spike in Microsoft Console Profits 39

PLMIV writes "Microsoft said the company's home and entertainment division, which includes games and the Xbox video game console system, posted its first profitable quarter on sales of its hit game Halo 2. But the company said the division probably would be back in the red for the rest of the fiscal year and would not achieve sustained profitability until sometime in fiscal 2007."
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Rare Spike in Microsoft Console Profits

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  • What are the legal ways for companies to conveniently shuffle money around so the overall numbers are the same but make certain things look more profitable? They could be throwing a bone to XBox supporters while nothing has really changed.
    • You are assuming that they care that the XBOX looks profitable. It's not like the Bush administration is going to come after them for abusing their Windows monopoly to undersell their console hardware. They have no fear of stockholder, customer, or legal backlash, so what do they care?
    • Or could be that Halo 2 was one of the biggest selling video games ever?
      • It umm... doesn't even make the top 10 last I checked.

        I think it's sold 6.7 million copies worldwide atm. Nothing to sneeze at, and very respectable...

        But the thing is there are a LOT of huge sellers in previous console generations.

        Mario Kart 64 for example sold something stupid like 12 million units worldwide. Mario 64 sold 10 million units in Japan and the US alone.

        And that's just Nintendo, last generation.

        I guess it depends upon your definition of biggest.
      • Or could be that Halo 2 was one of the biggest selling video games ever?

        It had good sales. It's more notable for beign quick then copious.
    • They could do it by recognizing expenses late (or early), or failing to account for inter-division expenses in the console segment's books, or by cross-ownership of other businesses (eg. like Circuit City does with CarMax). All of these, incidentally, are pretty obvious. The SEC's pretty strict, so it's hard to cook the books legally.

      However, they're not doing anything of the kind. Their press release says this is a blip because of Halo 2, and that they don't expect sustained profitability in consoles unt

    • They massaged the books by buying Bungie and making a game that everyone (or close enough) wanted to play. Remember, some kinds of massage aren't even dirty.
  • by FriedTurkey ( 761642 ) on Friday January 28, 2005 @02:31PM (#11505863)
    Are people still telling themselves that they are sticking it to Microsoft by buying an Xbox? Microsoft is making money on every unit sold now. Not that I am against Microsoft making money on a console, it just seems these people are lying to themselves. It doesn't bother me if you want a Xbox but stop lying to yourself that you aren't supporting Microsoft.
    • I stick it to Microsoft by not buying their products.
      • "I stick it to Microsoft by not buying their products."

        Really? That is a novel approah for boycotting that I have not considered. I have been protesting Beijing's policies by buying as many Chinese-made consumer goods as possible. But after reading your message, I will reconsider this approach. I also wonder if "sticking it to the Republicans" by voting for George W. Bush was a good idea either.

    • what if i bought an xbox when they were still losing money on everyone they sold, and have used it for XBMC and emulators ever since? Can i still take the moral high ground?
      • by Anonymous Coward
        Of course you can still take the "moral high ground" from pirating games...
    • If you thought that you were screwing with Microsoft because they sold the XBox at a loss, you're wrong from the start. The logic behind selling at a loss is that, well, you sell a lot of them so the necessary goods that *DO* make cash for it (namely: software titles) sell well. And for every geek buying one to use it as a Linux server there are another 1000 geeks that buy one to play games ocasionally.

      The more they sell, the more they earn. Simple math.
      • Yes, it's simple. The more games they sell, the more they earn. The more peripherals they sell, the more they earn. However, for every Xbox linux cluster, they lose some money. In the end... they come out in the red. Not because of the Linux users, but they make a contribution. Well, unless the whole thing is a lie and they make money on hardware now. Personally, I bought ONE new Xbox, and I'll probably buy a new Xbox 2, but I'll be buying used Xboxes for Linux, because I don't care if they've been banned f
    • Even if microsoft were losing money on that sale, they're still benefiting. More sales means much more reason to say that the system is appraoching profitability, meaning more string to draw in investors.
    • I bought an Xbox..... .....

      I am supporting microsoft...... ....

      so what
  • by EddieBurkett ( 614927 ) on Friday January 28, 2005 @02:35PM (#11505920)
    Bungie made Halo 2 and therefore is responsible for this spike. The Rare spike will occur when the new Conker game is released.
    • Good point. I think what's happening here is that Bungie has cause Microsoft's stock to bounce back up.
    • I had a similar thought as well. MS paid $375 million for Rare and since then, they've released 1 game on the Xbox, and 4 or 5 GBA games in that time. Unless Conker becomes a runaway hit, I don't see MS recouping their expenses for that purchase anytime soon...
      • I still wish Ninteno had never sold them. They could really have done with another 2nd party developer and the i imagine Rare had several games in the pipeline for the cube when they got sold off, which many would have been released by now. From a gamers point of view the selling of Rare was a black day
        • Looking at Starfox Adventures, Grabbed By The Ghoulies and the number of companies formed by ex-Rare employees perhaps Nintendo saw that Rare had it coming and they'd rather sell the horse to the butcher before it's completely worthless?
    • I hear the next Perfect Dark game is expected to come out "some time before Duke Nukem Forever."
      • The simple fact that PD once faded entirely from the public memory, and seems to be making a comeback in recent weeks, is indicative in itself. Why are people suddenly bringing up in posts again? Even I have, and I don't know why.
  • Source []

    "As a result of the sales forecast revision, the company also revised its financial forecasts downward for the year to the end of March. Nintendo said it expects consolidated net sales to be YEN 520 billion (US$5 billion), a drop from the previously forecast YEN 540 billion, while net income is now forecast to be YEN 70 billion, a drop from the prior forecast of YEN 90 billion. Despite the revisions, consolidated net sales and net income are still expected to grow by 1 percent and 111 percent respec
  • Certainly I understand the supposed Microsoft strategy: Be in the red as long as it takes to build up the brand, at which point it turns to gorgeous green. And certainly I understand that Microsoft has enough resources to maintain this for quite some time.

    But (and I am fully prepared to be modded down to oblivion for the following :P) it seems almost benevolent of Microsoft to continue in this fashion. How long are they going to be in the green just to regain lost sales afterall? I suppose it is true that
    • Re:Benevolent? (Score:1, Interesting)

      by Anonymous Coward
      No for-profit corporate entity exists just to lose money to the benefit of its customers.

      MS sees the console games industry as a means of getting a Windows-operated box into your living room, that will serve as a media hub and entertainment command center. MS wants to sell content and also be the means by which you lease, rent, license, view or play that content.

      Xbox is a stepping stone, just like PS2 is a stepping stone. The living room infrastructure is currently not suitable for either to have been d
  • Microsoft has deep enough pocket to lose money until 2007 so it can build long-term brands and profitibility. Xbox is a great machine. Even then, Microsoft has to project losing money for a long time before it would be able to capture enough market shares from an firmly established Sony and for Xbox to become profitable by itself. Imagine you are a new start-up that has created a brand new, cutting-edge gaming machine. You hawk around your design until . Your investors usually want to see profits in tw

Machines that have broken down will work perfectly when the repairman arrives.