View Full Version : Microsoft Q3 earnings are in*
Rangers
27-Apr-2007, 01:09
Cleared almost 5 billion dollars overall. Profits up 65%. So much for the Vista bomb.
Here's a more gaming focused writeup:
http://www.gamasutra.com/php-bin/news_index.php?story=13698
Game division loss was at 315m
Of interest, they only shipped 500k 360's in the Q. This was because they stuffed the channel to hit the 10m target last year (10.4m to be exact) and was expected. This is not an indicator of low sales, as my math shows they sold ~750k just in US NPD over that time period.Total 360 shipments to date as of March 31 are~11m. I would expect 360 shipments to pick up to at least 1-1.5m next quarter, as the channel gets depleted and Elite gets launched. MS previous June 31 target was also 12m.
Cleared almost 5 billion dollars overall. Profits up 65%. So much for the Vista bomb.
Here's a more gaming focused writeup:
http://www.gamasutra.com/php-bin/news_index.php?story=13698
Game division loss was at 315m
Of interest, they only shipped 500k 360's in the Q. This was because they stuffed the channel to hit the 10m target last year (10.4m to be exact) and was expected. This is not an indicator of low sales, as my math shows they sold ~750k just in US NPD over that time period.Total 360 shipments to date as of March 31 are~11m. I would expect 360 shipments to pick up to at least 1-1.5m next quarter, as the channel gets depleted and Elite gets launched. MS previous June 31 target was also 12m.
Any mention on the reasons behind the losses in the gaming division? The console has great attach rates and its almost sold at cost. I was expecting profits
edit: Btw I dont think its due to reduced shipments. The console is clearly not outsold with the current amounts available
Rangers
27-Apr-2007, 01:43
Any mention on the reasons behind the losses in the gaming division? The console has great attach rates and its almost sold at cost. I was expecting profits
edit: Btw I dont think its due to reduced shipments. The console is clearly not outsold with the current amounts available
It's not the gaming division per se, my wording should be more like "division that includes gaming". The division that Xbox is in is now called "entertainment and devices". It contains Zune, some PC stuff, all kinds of stuff, as is impossible to tease xbox results out of.
They lost 315m in the division this Q versus 402 last 3Q, is about all you can fully say.
I get something out of this, they only narrowed losses ~100m despite shipping 1.2m less 360's than the comparable previous year Q. That suggests to me 360 hardware losses alone are not a huge component of their losses.
They are probably losing money on Zune, marketing, warranty, all that stuff is my guess. Probably still losing some on 360 hardware, just no idea how much.
It's not the gaming division per se, my wording should be more like "division that includes gaming". The division that Xbox is in is now called "entertainment and devices". It contains Zune, some PC stuff, all kinds of stuff, as is impossible to tease xbox results out of.
They lost 315m in the division this Q versus 402 last 3Q, is about all you can fully say.
I get something out of this, they only narrowed losses ~100m despite shipping 1.2m less 360's than the comparable previous year Q. That suggests to me 360 hardware losses alone are not a huge component of their losses.
They are probably losing money on Zune, marketing, warranty, all that stuff is my guess. Probably still losing some on 360 hardware, just no idea how much.
hmm...Must be due to the other factors you mentioned like Zune, marketing and such then. Atleast mostly. I dont think its the 360 but I could be wrong.
Another article for the gaming side of MS results from Gamedaily (http://biz.gamedaily.com/industry/feature/?id=15953).
The earning release from MS (http://www.microsoft.com/msft/earnings/FY07/earn_rel_q3_07.mspx).
The 2006 Annual report (http://www.microsoft.com/msft/reports/ar06/downloads/MS_2006_AR.doc)(doc) and the browserthe flash version (http://www.microsoft.com/msft/reports/ar06/flashversion/index.html).
By the way, I edited the thread topic to something more descriptive, if nobody minds.
Was the previous quarter attributed to the startup loss of Zune? If so, now the onus is solely on Xbox.
Cleared almost 5 billion dollars overall. Profits up 65%. So much for the Vista bomb.
I suck at reading stuff like this, where can i find the numbers on the Vista sales and profits?
Microsoft 2006 earnings are in
Cleared almost 5 billion dollars overall. Profits up 65%. So much for the Vista bomb.
that cant be right, im pretty sure MS usually makes about 10billion profit a year
that cant be right, im pretty sure MS usually makes about 10billion profit a year
Isn't this only for a quarter?...
Cheezdoodles
27-Apr-2007, 10:12
This are quarterly numbers. Someone should change the topic title.
My bad, edited it again.
After I posted the Q3 press release, I added the 2006 full report, that explains the mistake of typing 2006 instead of Q3. :oops:
function
27-Apr-2007, 11:56
You can see why MS are resisting 360 price cuts, at least until the cheaper (and possibly more reliable) units are in.
I suck at reading stuff like this, where can i find the numbers on the Vista sales and profits?
Remember when reading the Vista numbers that it includes all the back-dated sales to OEMs who have the free upgrade bundles. This is why it is such a massive (65%) increase on normal quarters. Oh, and Office 2007 sales too.
Also, with the 360 don't forget to factor in the channel stuffing to reach the magic 10million. I guess they are paid for though.
It's simple, a monopoly doesn't follow the laws of free market economics.
Force OEMs to sell what the customer doesn't want on new PCs, and the customer will have to buy it. Charge more for the new product and the customer will have to pay it.
It's simple, a monopoly doesn't follow the laws of free market economics....
....Charge more for the new product and the customer will have to pay it.
Hmmm, playstation 3 now? ;) Just kidding
Hmmm, playstation 3 now? ;) Just kidding
Unlike a monopoly they can take risks and suffer the implications
It's simple, a monopoly doesn't follow the laws of free market economics.
Force OEMs to sell what the customer doesn't want on new PCs, and the customer will have to buy it. Charge more for the new product and the customer will have to pay it.
Something is fishy. I've been shopping laptops and it's almost impossible to get XP instead of Vista. Only Dell offers a choice because their customers have demanded it. Why would anyone choose Vista on a low end laptop at this point, so why isn't XP offered by all vendors? I guess MS is strong arming them or have just priced it so XP isn't competitive.
Something is fishy. I've been shopping laptops and it's almost impossible to get XP instead of Vista. Only Dell offers a choice because their customers have demanded it. Why would anyone choose Vista on a low end laptop at this point, so why isn't XP offered by all vendors? I guess MS is strong arming them or have just priced it so XP isn't competitive.
How many Honda dealership still offer new 2005 Honda Accords? Its only natural that once you offer a new product thats meant to replace an older model that the older model gets fazed out. The smaller the price gap between the respective models the faster fazing out happens.
The longer MS continues to offer XP, the longer it has to support it.
The longer MS continues to offer XP, the longer it has to support it.
I don't see it that way. MS is making us buy something we don't want because they can. Anyone can buy XP via retail channels, it's still supported and sold. Yet MS has made it so new systems from big vendors no longer have the choice (except Dell). Vista is not an improvement over XP, so why force it on us? It's good to be a monopoly I guess.
Anyhow I ended up with a Dell with XP, which I will install Linux onto. I don't feel like beta testing Vista ATM.
Was the previous quarter attributed to the startup loss of Zune? If so, now the onus is solely on Xbox.
If the prem/core ration is 80/20 then the 360 sales make up about 20% of the revenue but for the 360 to be the sole contributor of the loss would mean the 360 selling at a loss of about $630.00 dollars per unit minus any marketing and support cost attributed to the 360.
I don't see it that way. MS is making us buy something we don't want because they can. Anyone can buy XP via retail channels, it's still supported and sold. Yet MS has made it so new systems from big vendors no longer have the choice (except Dell). Vista is not an improvement over XP, so why force it on us? It's good to be a monopoly I guess.
Anyhow I ended up with a Dell with XP, which I will install Linux onto. I don't feel like beta testing Vista ATM.
MS is not forcing you or anyone else to buy anything. It made a strategic decision to maximize the uptake of Vista. Its not MS responsibilites to provide you with choice, its responsibilities is to its shareholders. Most people don't care what edition of an OS they have on their new computer as long as its the newest and its from MS and this is what sustains MS's monopoly. Does MS's monopoly provides them with greater latitude when making strategic decision? Yes, but it gained that latitude because the general population lacks the fortitude to support other OSes enough to foster competition that would force MS to offer more consumer friendly choices.
MS is not forcing you or anyone else to buy anything. It made a strategic decision to maximize the uptake of Vista. Its not MS responsibilites to provide you with choice, its responsibilities is to its shareholders. Most people don't care what edition of an OS they have on their new computer as long as its the newest and its from MS and this is what sustains MS's monopoly. Does MS's monopoly provides them with greater latitude when making strategic decision? Yes, but it gained that latitude because the general population lacks the fortitude to support other OSes enough to foster competition that would force MS to offer more consumer friendly choices.And to add: hardware companies typically like new operating systems, since it jump starts sales. They also hate supporting multiple operating systems, since this introduces complexity in their build-outs. Multiple software configurations impacts their build-out infrastructure, test, and support at what I would guess would be a linear progression. So, dollar for dollar, it behooves them to minimize this.
Here's an ancillary question: can one buy an Apple MacBook with an older version of the OS on it? I just went to Apple.com and spec'ed out a nice MacBook Pro and not once did I see an option letting me select an older OS. Also? The damn thing was so sexy I wanted to buy it. :sad:
Was the previous quarter attributed to the startup loss of Zune? If so, now the onus is solely on Xbox.
I think you're right. It looks like it's costing Microsoft about $630 for every unit sold (US$315 million in losses with 500,000 units shipped. I would presume the majority of that is in marketing with the hardware coming in a close second...but you'd think they wouldn't be losing much on the hardware at this point. Though given the screenshots of the Elite's motherboard, it doesn't appear there's been much cost reduction. And, they seem to have solid software and peripheral sales. So what's going on?
I think you're right. It looks like it's costing Microsoft about $630 for every unit sold (US$315 million in losses with 500,000 units shipped. I would presume the majority of that is in marketing with the hardware coming in a close second...but you'd think they wouldn't be losing much on the hardware at this point. Though given the screenshots of the Elite's motherboard, it doesn't appear there's been much cost reduction. And, they seem to have solid software and peripheral sales. So what's going on?
no, I think that would mean $630 loss per console , which is impossible so 360 is probably a fraction of those losses although I'd assume by those numbers that they are in fact still losing money per console.
no, I think that would mean $630 loss per console , which is impossible so 360 is probably a fraction of those losses although I'd assume by those numbers that they are in fact still losing money per console.
I was thinking more in terms of what it cost Microsost to sell a console, not necessarily the hardware cost of the console. Not sure that it matters, given the abstractness of the numbers...
vBulletin® v3.8.6, Copyright ©2000-2013, Jelsoft Enterprises Ltd.