Xbox Operation to Turn Profitable by September 2007

[London Geezer]

MS won't have to lower the price to be more competitive against Sony. They will have to do it for Nintendo.

PS3 will be (much) more expensive than both consoles for a long time, probably till PS4 comes out, therefore the price war will be against MS and Nintendo.

But i think price won't really be one of the deciding factors anyway.

 

[function]

Microsoft has shipped more than 6 million consoles worldwide (3.6 million in North America, 1.7 million in Europe, and 700,000 in the rest of the world). This number is very revealing. It suggests that Microsoft has sold through less than 6 million and that shows it is behind on its goal of hitting 10 million consoles sold by the time Sony sells one (starting Nov. 17).

I don't believe "10 million by the time PS3 launches" was ever a real goal for Microsoft. I've never seen shipment projections from MS that indicate they thought they could acheive this. I think it was just some MS execs spouting off, blurring the line between "when PS3 launches" and "holidays".

10 million by the end of the year (which is what's now being questioned) is the only official estimate I've seen that's sounded "real".

 

[patsu]

MS is not saying this. This is a analyst saying that. So if MS doesn't turn a profit then nobody should say they were wrong.

Oops... you're right. Congrats if they can reach and sustain profitability as projected.

 

[zed]

I don't believe "10 million by the time PS3 launches" was ever a real goal for Microsoft. I've never seen shipment projections from MS that indicate they thought they could acheive this. I think it was just some MS execs spouting off, blurring the line between "when PS3 launches" and "holidays".10 million by the end of the year (which is what's now being questioned) is the only official estimate I've seen that's sounded "real".

peter moore (head of xbox) is on record as saying based on MS company predictions, there will be 10million before ps3 launches

 

[Johnny Awesome]

In any case, it seems like the X360 is doing very well shipping 6 million units through September mostly at the $399 price-point. That bodes well for the future. They'll probably ship another 2 million in NA, 1 million in EU, and 500K in the rest of the world from Oct - Dec. This will put them at 9.5 million world-wide by the end of the year. Not too shabby.

I would say that MS is on track to sell at least 50 million units by the end of the X360 lifecycle. If they break even on the hardware, then they stand to make at least $5 billion on X360 this generation as long as the tie ratio hits 10+ (which is pretty standard). That doesn't include extra revenue from Live, Marketplace, or 1st party titles, but those things probably just pay for marketing anyway.

 

[Acert93]

It suggests that Microsoft has sold through less than 6 million and that shows it is behind on its goal of hitting 10 million consoles sold by the time Sony sells one (starting Nov. 17).

Not long after E3 MS did adjust the 10M statement to 10M by the end of the year.

This is kind of like knocking Sony now for missing 4M in CY 2006 when they told us a while ago they wouldn't meet that. The new target is 2M for Sony, so talking about 4M is kind of irrelevant as the expectation has been lowered.

 

[Tap In]

I thought people use Xbox Live on their Xbox 1 consoles too.

yes, but MS knows who is on with an Xbox and who is on with an X360. So they know if 70% of 360 users are on Live.

 

[function]

peter moore (head of xbox) is on record as saying based on MS company predictions, there will be 10million before ps3 launches

This is exactly what I'm talking about. MS execs wanting to make the difference sound bigger than it was. I don't believe "10 million by the time PS3 launches" was ever a real MS projection that they posted in their reports to investors.

10 million by the end of the year, yeah, I read that one (more than once).

 

[a688]

This is exactly what I'm talking about. MS execs wanting to make the difference sound bigger than it was. I don't believe "10 million by the time PS3 launches" was ever a real MS projection that they posted in their reports to investors.

10 million by the end of the year, yeah, I read that one (more than once).

Since the PS3 will have yet to launch in Europe by christmas, you could give MS some extra fudging time to still make it true .

 

[dobwal]

Since the PS3 will have yet to launch in Europe by christmas, you could give MS some extra fudging time to still make it true .

Selling 4 million during the 4 quarter of a CY is not impossible.

http://forum.pcvsconsole.com/viewthread.php?tid=11067
These are NPD numbers and people are BD posters have mention them as not all inclusive.

Sony sold 4.5 million ps2 consoles in the US alone back in 2002 albeit at the $200.00 price point. They did move ~3.5 million in the US back in 2001 at the $299.00 price point.

The 360 would have to move around 2.75-3.00 million in the US and around 1-1.25 million around the rest of the world. However, that $399.00 price point for the premium seems a little high to expect such movement. I expect MS will move about 3.25-3.5 and round up to make the claim of 10 million shipped.

 

[fulcizombie]

I expect MS to move around 2 million consoles in the U.S,1+ million in Europe(first proper holiday season for the console),300k in Canada,150k in Australia and 100k in Japan(well maybe,if BD sells decently) in the last quarter of the year.

That would bring them really close to 10 million at the end of 2006.

 

[Skrying]

I expect MS to move around 2 million consoles in the U.S,1+ million in Europe(first proper holiday season for the console),300k in Canada,150k in Australia and 100k in Japan(well maybe,if BD sells decently) in the last quarter of the year.

That would bring them really close to 10 million at the end of 2006.

These numbers seem pretty reasonable to me also. MS will be settings pretty after this coming holiday season. Should be a big seller.

 

[zed]

This is exactly what I'm talking about. MS execs wanting to make the difference sound bigger than it was. I don't believe "10 million by the time PS3 launches" was ever a real MS projection that they posted in their reports to investors.
10 million by the end of the year, yeah, I read that one (more than once).

Microsoft will have a 10 million unit Xbox 360 installed base, according to now official company predictions.

+ peter moore + according to this link bill gates (warning kotaku)
http://www.kotaku.com/gaming/xbox-360/msoft-blows-10-million-head-start-promise-210483.php

now if that aint good enuf ill try and get our lord hendrix down from heaven to voice the word
the fact is, they wanted + predicted a 10million base before the wii/ps3 lanched, it aint no happened bro
i predict 10million sold (not shipped in march next year)

 

[ninzel]

According to this article MS expects to be profitable by June 30 2008 if I'm reading that correctly.
http://blogs.mercurynews.com/aei/2006/10/console_wars_a_.html

"Sales rose 70 percent in the Entertainment and Devices division, which includes games, to $1.03 billion in the quarter. The division cut its loss from $173 million a year ago to $96 million. Microsoft says it is on target to hit profitability by the fiscal year that ends June 30, 2008. That’s a long way away, but the company is making some progress."
"Adam Holt, an analyst at JP Morgan, said in a note that sales were light and Microsoft seemed to be behind its goal."

 

[function]

+ peter moore + according to this link bill gates (warning kotaku)
http://www.kotaku.com/gaming/xbox-360/msoft-blows-10-million-head-start-promise-210483.php

now if that aint good enuf ill try and get our lord hendrix down from heaven to voice the word
the fact is, they wanted + predicted a 10million base before the wii/ps3 lanched, it aint no happened bro
i predict 10million sold (not shipped in march next year)

Do you even understand what I'm saying?

I don't think you do.

 

[Johnny Awesome]

There's no point in fighting the trolls. That only encourages them.

MS is doing very well and will be at 9-10 million shipped by the end of the year. Excellent news.

 

[Bohdy]

Heh, they still have to make up the 4 billion from last gen.

 

[Fox5]

According to this article MS expects to be profitable by June 30 2008 if I'm reading that correctly.
http://blogs.mercurynews.com/aei/2006/10/console_wars_a_.html

"Sales rose 70 percent in the Entertainment and Devices division, which includes games, to $1.03 billion in the quarter. The division cut its loss from $173 million a year ago to $96 million. Microsoft says it is on target to hit profitability by the fiscal year that ends June 30, 2008. That’s a long way away, but the company is making some progress."
"Adam Holt, an analyst at JP Morgan, said in a note that sales were light and Microsoft seemed to be behind its goal."

Does that include recovering all the losses from Xbox 1? If not, that's a real misstep for MS if they couldn't make 360 profitable sooner even with the foresight that the Xbox way was the wrong way to do things. The again, Sega couldn't do it with Dreamcast after like 3 years.

 

[Shifty Geezer]

Does that include recovering all the losses from Xbox 1?

Nope.

If not, that's a real misstep for MS if they couldn't make 360 profitable sooner even with the foresight that the Xbox way was the wrong way to do things.

Give the guys a chance! Consoles take a while to get going before they starting raking in the dough. The success or failure will be apparent in say ten years time, when downloaded content is an easy revenue stream and we see whether the living room dominance was achieved and as profitable as hoped.

 

[Fox5]

Nope.
Give the guys a chance! Consoles take a while to get going before they starting raking in the dough. The success or failure will be apparent in say ten years time, when downloaded content is an easy revenue stream and we see whether the living room dominance was achieved and as profitable as hoped.

Nintendo, Sega, Sony, and Atari did not take 10 years or 2 console generations to become profitable.
The Xbox was an admitted mistake in economics, but with the 360, MS had the chance to fix the problems. They had the chance to design a system and price it appropriately so it wouldn't bleed money, and they have Xbox Live which is pretty much pure profit, and yet they won't even recover the costs of just the 360 hardware on its own until 2008? That better include all the R&D and marketing dollars as well; the original Xbox was also predicted to be profitable within 3 years of launch.