Xbox division profit nearly doubles, nearly 34 million 360s sold

http://www.gamespot.com/news/6237794.html?om_act=convert&om_clk=newstop&tag=newstop;title;9

This morning, software giant Microsoft reported its earnings declined during the quarter ending September 30. On a year-on-year comparison, quarterly revenue sank 14 percent to $12.92 billion, with profits declining 18 percent to $3.57 billion ($0.40 per share), from $4.37 billion ($0.48 per share). The company blamed the decline on the deferred cost of a program that lets new PC buyers upgrade to Windows 7, which officially launched yesterday.

Of particular interest to gamers is the performance of Microsoft's Entertainment and Devices Division, which makes the Xbox 360 and Zune multimedia handheld, and will have 3D games by year's end. Though Microsoft touted "Windows and Xbox exceed expectations due to strong consumer demand" in the subtitle of its earnings release, the division's earnings were down slightly. Revenues fell from $1.893 billion in July-September 2008 to $1.891 billion during the same three months in 2009.

E&D operating profit, however, nearly doubled, going from $159 million to $312 million during the quarter, which saw the launch of the already multiplatinum 360 shooter Halo 3: ODST. The game was the top US title for September, the same month that also saw the $300 Xbox 360 Elite price drop in full effect. (It began at the end of August.)

[UPDATE] In a conference call with analysts after the report, Microsoft investor relations general manager Bill Koefoed dropped more details on game revenue. For the quarter, overall gaming revenue was up nearly $100 million dollars, with Xbox Live revenues increasing 50 percent.

The executive also revealed that the Xbox 360 now has an industry-best 8.7-title attach rate--that is, an average of 8.7 Xbox 360 games sold for each console sold. More significantly, the 360's installed base is now "almost" 34 million units worldwide, up about 3 million from August. By contrast, Nintendo's Wii had an installed base of nearly 53 million at the end of July, and nearly 24 million PlayStation 3s were sold as of late August.

During Microsoft's prior fiscal year, which ended June 30, the E&D division generated an annual operating profit of $169 million, its second consecutive year in the black. As a platform, the Xbox 360--and before it, the Xbox--had traditionally been money losers for Microsoft since it got into the console business in 2001.

Today, though, Microsoft's overall third quarter profits were bigger than the $0.32 per share predicted by a survey of analysts compiled by the Thomson Reuters news service. As a result, the company stock shot up over $2.40 (9 percent) to over $29 per share in premarket trading.

Good to see Microsoft start to claw back some of their losses. At the current rate it'll only take about 100 years for Xbox to get into the black :p

Lol Mike.

That's what I love about Microsoft strategy.

It's never a short-term endeavor to penetrate and dominate the marketplace.

However the goal is simple in every case, be number one. It's often a 3, 6 or 8 year investment but it eventually holds.

Micosoft has to disposable cash assetts to do this, and eventually wear the competition down.

Next stop, Windows Mobile. ;)

That's what I love about Microsoft strategy.

It's never a short-term endeavor to penetrate and dominate the marketplace.

MS has made some masterful moves with the 360; pretty impressive that they have become a major player in gaming after only their 2nd console. Hopefully MS does not get lazy and start taking things for granted...

Next stop, Windows Mobile. ;)

I think the mobile OS market will be a bigger challenge. With so many strong competitors (black berry, apple, google, nokia, palm), this will be difficult. The smart phone OS market is arguably already too crowded. MS prob should have bought palm when it was a penny stock

MS has made some masterful moves with the 360; pretty impressive that they have become a major player in gaming after only their 2nd console. Hopefully MS does not get lazy and start taking things for granted...

No other major player has taken 2 gens to become market leader ;) (or had to bleed billions) all they have done is proven that if you have the money, you can buy your way into the gaming market.

(note: I've got nothing against Microsoft, I just can't think where this "they've done really well" comes from... other than through eyes blinded by patriotism.)

In fact, with the exception of the PS3, I can' think of any system that has come close to initially losing the money that both Microsoft consoles have done before being able to turn a modest profit and just about scrape 2nd place in the market.

In fact, with the exception of the PS3, I can' think of any system that has come close to initially losing the money that both Microsoft consoles have done before being able to turn a modest profit and just about scrape 2nd place in the market.

Yes, that is indeed quite an exception. The only thing worse than bleeding money scrapping 2nd is bleeding money and scrapping 3rd...:D

Xbox 360 and Xbox live are great! I got xbox live a few months ago. It's been a helluva ride.

No other major player has taken 2 gens to become market leader ;) (or had to bleed billions) all they have done is proven that if you have the money, you can buy your way into the gaming market.

(note: I've got nothing against Microsoft, I just can't think where this "they've done really well" comes from... other than through eyes blinded by patriotism.)

In fact, with the exception of the PS3, I can' think of any system that has come close to initially losing the money that both Microsoft consoles have done before being able to turn a modest profit and just about scrape 2nd place in the market.

Indeed, but the notion of winning a race by throwing more and more money isn't exactly new :what:

Lets be fair and balanced here... Compared to sega and nintendo (at the time), sony had $$. PS was released at the right time. Sony spent big $$ establishing the PS brand. Why when an american company does the same thing, we get all the whining? Biased are we? :what: ;)

No other major player has taken 2 gens to become market leader ;) (or had to bleed billions) all they have done is proven that if you have the money, you can buy your way into the gaming market.

(note: I've got nothing against Microsoft, I just can't think where this "they've done really well" comes from... other than through eyes blinded by patriotism.)

In fact, with the exception of the PS3, I can' think of any system that has come close to initially losing the money that both Microsoft consoles have done before being able to turn a modest profit and just about scrape 2nd place in the market.

Hey lets not forget: this gen does not start until sony sez so! ;)

Yes, that is indeed quite an exception. The only thing worse than bleeding money scrapping 2nd is bleeding money and scrapping 3rd...:D

A wise man once said, “There is nothing new under the sun…” MS merely learned the secrets of sony’s success with PS ;)

Indeed, but the notion of winning a race by throwing more and more money isn't exactly new :what:

Cyg... multi-quote is available :lol:

A wise man once said, “There is nothing new under the sun…” MS merely learned the secrets of sony’s success with PS ;)

Very true, they took the winning combination based on the competition's history and then threw money at their products shortcoming to win. Guess you could say MS has become the 3M of the gaming world :banana:

Lets be fair and balanced here... Compared to sega and nintendo (at the time), sony had $$. PS was released at the right time. Sony spent big $$ establishing the PS brand. Why when an american company does the same thing, we get all the whining? Biased are we? :what: ;)

Sony didn't have the $$ you think. SCEI was hated by other divisions of Sony. The reasons the PS1 became the dominant console have been posted on here countless times. It was a much harder ride for SCEI than you seem to think.

It was Sega and Nintendo that sent developers to Sony. Sony didn't dish out the millions that people believe they did, they just made the platform the most attractive to develop for, and introduced selling hardware at a loss combined with a "grown up" marketing campaign.

How come Nintendo have dethroned PlayStation now? They neither thrown away billions of dollars, nor purchased loads of exclusives, yet it is still number 1? :error there is clearly a flaw in your logic for how to become market leader just like there is Microsoft's. :p

Honestly, Nintendo's gimmick has paid off obviously, but I think it would be a different story if the Wii was up against the 360 & PS3 without motion control.

I would like to bring up the question of how many of those 34 million sold were from people not willing to wait the 2-4 weeks it takes to get a broken console back from microsoft?

I believe this should be noted whenever there is any information as to how many consoles Microsoft has sold.

This IS a contributing factor in my opinion, simply for the fact that the design of the 360 was so broken on an epic scale, that people stockpile 360's in case their's breaks.

How many of those 34 million was the one and only those consumers had bought? I'd guess MAYBE half...if that.

Honestly, Nintendo's gimmick has paid off obviously, but I think it would be a different story if the Wii was up against the 360 & PS3 without motion control.

I don't think there's any denying that... what with the Wii being a GameCube with motion controls for the most part and we saw what happened to the GameCube last gen despite being the cheapest system on the market. What the Wii did show though (as did the DS before hand) graphics aren't everything.

Very true, they took the winning combination based on the competition's history and then threw money at their products shortcoming to win. Guess you could say MS has become the 3M of the gaming world :banana:

Well as far as this gen goes, both Sony and Microsoft have sunk billions into their consoles, each for a different reason. Sony's strategy worked with Blu-Ray but slowed the PS3's success as a gaming console.. I am happy to see soo many promises finally pan out as the first 2 years were not happy ones for my PS3 when it came to games and connectivity.

I am glad both companies are making gains but neither is gonna be in the black at the end of this gen..

I would like to bring up the question of how many of those 34 million sold were from people not willing to wait the 2-4 weeks it takes to get a broken console back from microsoft?

I believe this should be noted whenever there is any information as to how many consoles Microsoft has sold.

This IS a contributing factor in my opinion, simply for the fact that the design of the 360 was so broken on an epic scale, that people stockpile 360's in case their's breaks.

How many of those 34 million was the one and only those consumers had bought? I'd guess MAYBE half...if that.

Well then with your logic and math, you are saying that the 360 and PS3 are roughly even in the US (likely even the world) and yet the 360 is the number one console when it comes to playing games as the attach rate (even with the RROD/replacement consoles) is higher than the both the Wii and PS3.

Well as far as this gen goes, both Sony and Microsoft have sunk billions into their consoles, each for a different reason. Sony's strategy worked with Blu-Ray but slowed the PS3's success as a gaming console.. I am happy to see soo many promises finally pan out as the first 2 years were not happy ones for my PS3 when it came to games and connectivity.

I am glad both companies are making gains but neither is gonna be in the black at the end of this gen..



Well then with your logic and math, you are saying that the 360 and PS3 are roughly even in the US (likely even the world) and yet the 360 is the number one console when it comes to playing games as the attach rate (even with the RROD/replacement consoles) is higher than the both the Wii and PS3.

No doubt the 360 is profitable mostly because they charge for online whereas the PS3 is free. MS charges ridiculous money for "official" HDD & SD memory whereas the PS3 has no such premiums, and now with MS making clone HDD & memory unusable and PS3 adding Netflix the tide is turning more and more IMO.

I can understand MS wanting more profits and as long as people will pay for those proprietary solutions they are smart and IMO, (don't hate me for this) and 360 owners are suckers to an extent to continue to pay for them when the alternative also adds BD playback as well.

All I can say is I am glad I went with a PS3 instead of a 360 at this point and I cannot believe that Sony is the company that is more open and MS is the proprietary one. I remember the days when MS was talking about winning on product design and being open and ridiculing IBM for going to a closed PS/2 system back in the days of yore. Iguess once you become king (like IBM once was) MS decided trying to hold that spot just makes you less innovative and less sure that you need to close up your systems to hold onto what you have. If they continue then they will end up the same way IBM was after they closed their PC systems up when a competitor beats them simply with the same innovation and open way MS started out.

And this is coming from someone who actually LIKES MS. :D

No doubt the 360 is profitable mostly because they charge for online whereas the PS3 is free. MS charges ridiculous money for "official" HDD & SD memory whereas the PS3 has no such premiums, and now with MS making clone HDD & memory unusable and PS3 adding Netflix the tide is turning more and more IMO.

I can understand MS wanting more profits and as long as people will pay for those proprietary solutions they are smart and IMO, (don't hate me for this) and 360 owners are suckers to an extent to continue to pay for them when the alternative also adds BD playback as well.

All I can say is I am glad I went with a PS3 instead of a 360 at this point and I cannot believe that Sony is the company that is more open and MS is the proprietary one. I remember the days when MS was talking about winning on product design and being open and ridiculing IBM for going to a closed PS/2 system back in the days of yore. Iguess once you become king (like IBM once was) MS decided trying to hold that spot just makes you less innovative and less sure that you need to close up your systems to hold onto what you have. If they continue then they will end up the same way IBM was after they closed their PC systems up when a competitor beats them simply with the same innovation and open way MS started out.

And this is coming from someone who actually LIKES MS. :D

If I have been a one system man and chose the PS3 I would be pretty pissed off, Sony has done wonders this year but honestly its taken a lot of time (2 years and billions lost). Yes you pay for Microsoft but they got it first and got it right, no work arounds, just seemless integration. Sony has taken the we will be last to the party and tack on features but later down the road, we will integrate them.

That being said I am not pissed off at Sony as I had these features first with the 360, but now I can have them free with the PS3! I dont think I can ever get rid of XBL, I have too many friends who I play online with, I always saw Netflix and such as just a bonus.

I use my PS3 for damn near everything and its just adding more and more features to keep my coming back..

Well then with your logic and math, you are saying that the 360 and PS3 are roughly even in the US (likely even the world) and yet the 360 is the number one console when it comes to playing games as the attach rate (even with the RROD/replacement consoles) is higher than the both the Wii and PS3.

It's logical that the longer a console is on the market, the higher its attach rate becomes. A good chunk of the 360 userbase had their consoles a good year before the PS3 hit the market. I don't see why it's such a big surprise that the attach rate is higher.

It also appears that the Wii has taken the brunt of the "gimmick" purchasers (I don't mean motion controls) who buy the shiny console in the store for 1 or 2 games, then just tend to leave the system after a few months.

The market leader is usually the system that attracts these users, I know quite a few "non gamers" who bought PS2s but never really bothered buying many games for them. The 360 however has a very dedicated userbase as it seems, does the PS3.

I would wager a guess that the Wii has the lowest attach rate of all the systems? I'd bet the DS has the highest. If those numbers are there I missed them. Nintendo does some things well (the DS) and others just awful (the Wii). But at least the DS is good.

It's logical that the longer a console is on the market, the higher its attach rate becomes. A good chunk of the 360 userbase had their consoles a good year before the PS3 hit the market. I don't see why it's such a big surprise that the attach rate is higher.

It also appears that the Wii has taken the brunt of the "gimmick" purchasers (I don't mean motion controls) who buy the shiny console in the store for 1 or 2 games, then just tend to leave the system after a few months.

The market leader is usually the system that attracts these users, I know quite a few "non gamers" who bought PS2s but never really bothered buying many games for them. The 360 however has a very dedicated userbase as it seems, does the PS3.


Its not logical though Mike, because the exact opposite could happen, just look at the Wii.. Its numbers only dwindle the longer its on the market, like you said, people buy a Wii, a few games and then thats it..

Its funny though because that is me as a Wii owner, the next Wii game I will play with be Epic Mickey (fall 2010) and I dont even know if I will buy that. My biggest let down this gen is not a game, its Nintendo, I at least enjoyed the gamecube and its pricing.. The Wii is not worth $250 or even its soon to be $200, give it to me for a $100 and my impressions may change.

Its not logical though Mike, because the exact opposite could happen, just look at the Wii.. Its numbers only dwindle the longer its on the market, like you said, people buy a Wii, a few games and then thats it..

It's perfectly logical, except for the users I mentioned. Which as we agree, all migrated or purchased a Wii. That means the 360 and PS3 userbase is even more skewed than normal towards traditional "gamers" who will obviously, buy more games as time goes by ;)

That said however, the Attach rate for the consoles in the US according to VG Charts is:

360 - 10.36
PS3 - 8.36
Wii - 7.85

So it's only half a game per console behind the PS3. That said it's not clear if that includes Wii Sports or not as a game. But either way, given that so many people supposedly bought a Wii, played Wii Sports (or Wii Fit) then put the thing away that means there are also a lot of other people who have bought quite large collections of Wii titles.

The PS3 also has a game attach hinderence in the form of also being purchased as a dedicated Blu-ray player. The 360 enjoyed an extra 12 months on the market, and so if every PS3 and Wii owner bought 2 games in the next 12 months, that would balance the attach rates out across all 3 systems.

It's perfectly logical, except for the users I mentioned. Which as we agree, all migrated or purchased a Wii. That means the 360 and PS3 userbase is even more skewed than normal towards traditional "gamers" who will obviously, buy more games as time goes by ;)

That said however, the Attach rate for the consoles in the US according to VG Charts is:

360 - 10.36
PS3 - 8.36
Wii - 7.85

So it's only half a game per console behind the PS3. That said it's not clear if that includes Wii Sports or not as a game. But either way, given that so many people supposedly bought a Wii, played Wii Sports (or Wii Fit) then put the thing away that means there are also a lot of other people who have bought quite large collections of Wii titles.

1) The PS3 also has a game attach hinderence in the form of also being purchased as a dedicated Blu-ray player.2) The 360 enjoyed an extra 12 months on the market, and so if every PS3 and Wii owner bought 2 games in the next 12 months, that would balance the attach rates out across all 3 systems.

1)
Those numbers will likely never be revealed, same as those who suffered a RROD only to buy another console. Its not that they cant release those numbers, there is no way of telling who bought what for what and why..

2)
I see what your saying, but the attach rate's are even if you just compare the number of consoles to total games sold (which we do). Sure the PS3 has less overall total sales as do its games, but that is what evens it out. The 360's lead in sales only makes it harder for it to have the attach rate that it does and given the scenario that likely there is only 25.5 million (thats 1.5 mill higher than the PS3) 360 users out there, that makes the attach rate that much more impressive.


So the numbers as you say are skewed and I only used Xcitor's argument and math and presented it to him (and you) in a different light. Those that own a 360 got shafted early on and somewhat even now with hardware malfunctions.. That hasnt stopped them (360 owners) from buying games in droves though..

Someone please stop me if I am just not getting it :thumbsup:

I know I skew the numbers!

I got like 8 Xboxs (or have had so many) and probably own between 5-10 games. Haha.

As for PS3, I own around 5 and own maybe 15-20 games.

This is nothing like last gen where my PS2 count was in the hundreds and my Xbox count into the twenties.

I know I skew the numbers!

I got like 8 Xboxs (or have had so many) and probably own between 5-10 games. Haha.

As for PS3, I own around 5 and own maybe 15-20 games.

This is nothing like last gen where my PS2 count was in the hundreds and my Xbox count into the twenties.

What, why sooo many consoles???

What, why sooo many consoles???

Cuz i have no life :( and at one point a lot of money haha.

No, I try to collect important hardware revisions (ie upgrade) and most importantly Special/Limited EDITIONS!!!

Microsoft has had a SE/LE for almost every big game this gen. Why I got so many of them.

Cuz i have no life :( and at one point a lot of money haha.

No, I try to collect important hardware revisions (ie upgrade) and most importantly Special/Limited EDITIONS!!!

Microsoft has had a SE/LE for almost every big game this gen. Why I got so many of them.

Ohhh I see, I was thinking you were just buying the same console over and over to have one in every room (bathroom included :) )

That makes sense, collectibles get me too, but I try to stay away from the consoles. That could get pricey as you already know :eek:

I was suckered into the LE game last gen but then decided I didn't have the space to carry on :lol:

I know exactly what you're saying Mase, I'm not even disagreeing really, as there are so many factors from all sides that you can't really call it either way.

In the UK I count as an owner of 3 Xbox 360s :lol: I bought a US Premium in Dec 2005, that RROD'd within days and wasn't warrantied due to being an import (expensive lesson learned as I paid £500 for that console with a selection of launch titles). I sold off the 360, HDD etc seperately (there was a massive HDD shortage in the UK which added a lot of value to the HDD sale) and recouped most of the money.

With this I then managed to finally find a Core pack in the UK and then hunted for a HDD again (at half the price the original sold for) :lol:. That RROD'd 4 months later (whoop whoop!) but was this time warrantied and so replaced a few weeks later. That Xbox 360 is still going strong 3+ years later... but then the bastards released the Elite... or Xbox number 3 :D

I've also got through about 50 games in that time, most of which were bought new, and so I've also kept the attach rate goin for em :D

Ohhh I see, I was thinking you were just buying the same console over and over to have one in every room (bathroom included :) )

That makes sense, collectibles get me too, but I try to stay away from the consoles. That could get pricey as you already know :eek:

Haha, I actually got a PC or "PC like devices" in every room (including the bathroom.) The bathroom "PC" is a Tablet with WiFi mounted to the wall, it runs mostly as a file server (watch TV, or listen to music when taking a dump haha...or Youtube.) I put it mostly because my girlfriend does her make up and watches some weird lady on some weird website. After breaking her laptop (spilled water on it) I finally caved and got a dinky little tablet does the job. Plays emulators good too ahah.