It's fairly safe to assume that Microsoft as a whole
ain't hurtin' in the wallet, but for its Xbox platform, the positive cash flow is (possibly) just around the corner. According to an interview with Robbie Bach, president of Microsoft's Entertainment and Devices Division, the firm's gaming business "will be profitable next year," which will certainly be a breath of fresh air considering how much loot it
has been losing for years in the arena. Still, it's not like any major competitors aren't
suffering through the same
pains, and while the Big N is smiling all the way to the bank with the
profits it makes on every Wii sold, we're glad that at least a few consoles are offering up high-definition and true online play regardless of the cost. Obviously, the continual decrease in component costs are making the consoles cheaper to produce, but Bach went so far as to point out that (overpriced) peripherals, an increased user base on Xbox Live, and software sales would be the primary margin drivers next year. So now that the Xbox 360 is looking rosy, what's to be done about the
Zune?
[Via
Joystiq]
posted May 6th 2007 1:03PM
What is wierd is when the 360 was released, somebody said it would be profitable overall, which I don't see happening. When they get the cheaper processor out of the door, and make mega bucks with Halo 3, certainly this year they'll be profitable.
Xtreme firmware 5.3 is out!!! get to flashing everyone
By '08, I believe he means FY08, which begins in a handful of months. Incidentally, the Zune hardware is not selling as a loss leader, but they do have R&D to pay off so the Zune Org is not profitable yet even if they do make money per Zune.
i thought the xbox (project / division) was still a good $5 billion in the red, or is this just counting 360
andy, I think Bach is talking about having a profitable quarter for a change. The division itself has been in the red cumulatively for about 5-6 billion since the Xbox was launched.
Personally, i thinks it's awesome to see Nintendo kicking Microsoft & Sony's tail in the market. Even though their outclassed and outmatched in all financial / engineering resource related aspects, Nintendo is still, though ingenuity & a little luck, keeping the market fresh with alternatives.
In the cited article from eWeek, Robbie Bach said "So, it's a business that will be profitable next year—we'll make money next year and that will be the first time, which is pretty exciting."
He goes on to say it's in the next 2 or 3 years that MS has to make it's profit ... to gear up for another, new cycle.
I'm glad, I love both my Xbox, My Xbox 360, all of my games for them, and my Zune. I'd like to see them start to make a profit, considering how great they all are. Xbox brought me great Shooter and Party games. My 360 brought me arcade games, free downloads, updates, amazing games, Xbox Live, and just extended my enjoyment in games in general. My Zune, though many don't like it, I love it. I like the interface a lot more than any other player I've seen/used, and it gave me an alternative to the players everyone uses.
I'd actually like to thank Microsoft for bringing me all of these experiences.
Why is this guy lowest ranked? :O
He didn't spam nor did he post flamebait, he just likes Microsoft and their products!
Well written and fair post Dragod :)
i agree.... but i dont have a zune yet (have a toshiba gigabeat S which is based on the same ui as the zune). i was not going to get a first gen product like the zune (namely because i wanted something smaller).
but i love my 360.... its been great. Cant wait till they get netflix style subscriptions on the video marketplace because it will likely take over for my blockbuster subscription.
Wait, so... if I am to give my honest opinion on something about Microsoft, I'm being paid? I'm sure if I had written "HAHAHAHA Son3y pwns u! M$ sUcks!!!!!" I would have been just some random person? Well, please tell me when my check arrives... I'd like to get some money, considering I'm 5 days short of 15 years old...
'Cause afterall, no one could have ever liked a Zune, no one ever had a different opinion about a product, ever. Darn, looks like I am being paid off with entertainment...
Why does it have anything to do with Sony? Did I say anything about Sony? I have no problem with Microsoft at all, my comment has more to do with the way that you laid out your praise. It reads like a Microsoft press release!
smart kid.
Thanks NiGhTmArE... I love how people assume that anytime someone says anything positive about Microsoft, or atleast try to sound educated (not using 'M$' or 'u r kool' etc.) they are being paid, and can't be trusted.
I was really opened up to gaming by the SNES, but it was something I did while I was grounded or late at night when I couldn't hang out with a friend. My Xbox originally got me into gaming with friends, where if I had a friend over we didn't have to sit around watching tv and hardly talking. With my 360, I finally decided to go for Xbox Live and I realized that buying a $400 game system isn't worth it if you don't play it enough, and it just not fun playing alone. Now that I have Xbox Live I have friends coming over all week. Guitar Hero, Halo 2, Gears of War. All night, it's great.
So, is there policy on Engadget called "Post Ethics 101" somewhere?
1) It is O.K. to praise a product/service if the news item is about that particular product/service.
2) It is not O.K. to criticize a product/service if the news item is about that particular product/service.
Doing the latter will result in getting a "Low Ranked" or "Lowest Ranked" label.
Remember not to express your opinions negatively!
Helpful tip: Try to edit "sucks" or "this product/service is bad" in your comments BEFORE posting them and try replacing them with words like "cool" or "1337".
In doing so, you will result in "Highly Ranked" or "Highest Ranked" label beside your post(s).
P.S. If you wish to post a negative comment.. *moans* ..it never hurts to give a valid argument! But, pffffft, that's for Negative Nancies!
Happy Engadgeting!
..btw, Microsoft is cool because the Xbox 360 is 1337. I have all 3 systems, and I can say the 360 does a nice job of bringing everything (like movies, music & games) full circle. Nintendo is biting Microsoft's heals with their "Wii Channels", however, the PS3 still has a lot of catching up to do! I
So basically what you're saying is without your Xbox, you wouldn't have any friends? Wow, that's a new one.
And honestly, if it took buying a $400 game system to discover the social aspect of gaming, then I feel a little sorry for you. I discovered it by getting an MMORPG that costs 10 times less, and takes up 10 times less room.
You need someone at Engadget that can make better pictures. You need effort, man, EFFORT! Like a Ballmer picture. Those are always funny. Just copy and past from Uncyclopedia.
Oh, and can ONE, just one blog for once, not call them M$? Jesus Christ in a birchwood canoe, Batman, it's getting real old.
I am in the same boat as Dragod in a way. I had always played video games, but having xbox live really opened up the social aspect of gaming to me.
I love my 360 and my xbox live experience.
While I am a bit disappointed with my zune ( codec support and no movie store ) I still think it is one of the best devices on the market. The UI and look of the device are important to me, and that is two things that the zune excels in. ( having a 3 inch screen doesn't hurt either )
-Woody
btw, I don't think MS has to pay people to write positive comments about their products. Their work speaks for itself.
Post Ethics* of course! ~,^
What is wierd is when the 360 was released, somebody said it would be profitable overall, which I don't see happening
--
Ballmer said that in a RIDICULOUS quote, something like, "we will make A LOT of money! 360 will make a ton of money.." *rolls eyes
Not his first lie, and not his last..
Too bad for MS that they said this last year.
And that the first Xbox wasn't supposed to lose all that money.
And that sales have globally stagnated.
And that losses were down buy the same ratio as sales from this period last year.
And that their higher losses last year were due to launch costs.
And that they're maintaining their $300 million average quarterly loss.
And that the shift to 65nm was delayed.
And that their competitors are both motivated for a price war.
And that billion $ yearly profits wouldn't cover the to date losses this gen.
Other then that I fully expect Xbox to be profitable, healthy, exuberant and beneficial for everyone. Except people making sense.
Microsoft blows.
But the X-Box is by far the best of the consoles.
The PS3 is way overpriced, and the Wii has no good serious gamer type games. They're more for kids or casual gamers.
Of course, I don't even own a console, so I could be wrong, but that's what I've seen.
If microsoft just stopped working with computers, they might actually be a halfway decent company.
Is the Xbox 360 also finally to become stable in '08?
Seriously though. A friend who has had his 360 since X-mas got the ring of death last week. It is getting a tad retarded that even after the system has been out this long newly built systems are still dieing.
Well, I'm sorry. That's just the way that I write, I love Microsoft's products and that's what I really thought about their products. I admit, I love Xbox over Playstation 2, Xbox 360 of Playstation 3, Windows over Mac, and Zune over iPod, but that's just what I prefer.
wow...just turing profitable? You gotta hand it to these corporations...i would never build a videogame console if it lost money for years until it finally turned a profit!
Yes, When I said "It was something I would do when I didn't couldn't hang out with friends" I mean "I have no friends". Totally.
"didn't couldn't"
Did they finally stop teaching English in schools?
If MS has such problems with making Xbox profitable, no wonder Sony is talking about a 10 year life span for their PS3.
Finally profitable means a lot of things, depending on how you work the accounting. I expect that means the Xbox division will generate more revenues than expenses...but is that for a quarter, or the whole FY? Is this the current FY, or the next FY? The H&E division has lost billions since its inception, so hopefully for MS shareholders he's talking about this current FY.
How much profit will there be? Even at WoW levels of about $1.2 bn revenue (8 million * $13/mo * 12 mo), they'll need like 6-8 years to get enough revenue. And that's just revenues, not profits.
Spin off the H&E division, before it saps more cash out of MS!
They probably would've been profitable already if the 360 were better manufactured and they weren't playing games with their DRM scheme locking consumers out of their content. All of those outsourced calls to non-native-English-speaking "support" are eating into their profits (and the collective patience of those of us who have had to deal with it on more than one occasion...)
Just a note to say that i like Microsoft products. I do some programming, and their Visual Studio is really easy to use, and am no expert programmer. I have an XBOX, and i am on my third XBOX360 - Microsoft paid for all collections and deliveries and repair costs.
Most large scale products and services are initially a loss leader type of strategy - mobile phones in the UK were loss leaders for a long time - the companies were relying on the monthly contract standing charge to recoup their investment of the infrastructure and mobile phone costs. I see why microsoft is no different, and i am not surprised by their console be a loss in the short term.