"X-Box Doubles Its Losses"

[Future Starlocke]

According to a recent Reuters report, Microsoft's losses on the Xbox almost doubled in the final quarter of last year, contributing to an overall operating loss of some $348 million for Microsoft's home and entertainment division. Last year the division, which incorporates Microsoft's PC games and TV products, posted a loss of just $180 million.
What this doesn't mean, however, is that the Xbox is performing badly at retail. Since Microsoft loses an estimated $100 on every Xbox console that's sold, the massive losses made in December suggest that the console sold extremely well during the Christmas holiday season, increasing the number of potential buyers for any games released subsequently.

The quarterly report with the US Securities and Exchange Commission also showed that Microsoft's overall operating income for the quarter was $1.97 billion as opposed to $2.11 billion the previous year.

[CruelAngel]

Thats funny... Cuz according to my sources they arent the only ones that suck.. Sims online seems to have realy bombed out.. selling way less than expected.

[Michael Bluth]

Well yeah, they lose money with each system sold, and as they sell more systems, they lose more money.

[JackieChanIsGOD]

Originally posted by CruelAngel
Thats funny... Cuz according to my sources they arent the only ones that suck.. Sims online seems to have realy bombed out.. selling way less than expected.

i'm guessing you didn't read FS's post..
It's ok... *pats on head*

[VeNoM]

Yeah. More systems sold = money lost
More games sold = money made back
The attach rate on Xbox = very good
Microsoft = very rich

[Future Starlocke]

I don't think there's enough software being sold to cover almost $350,000,000... especially if that's their total LOSSES, which I'm led to believe means after games or whatever other revenue that could have been made.

[VeNoM]

Originally posted by Future Starlocke
I don't think there's enough software being sold to cover almost $350,000,000... especially if that's their total LOSSES, which I'm led to believe means after games or whatever other revenue that could have been made.

Did you read the quote? Their losses is not just Xbox. They have Web TV, tablet PC's, PC games, and more. Not all 350 million was lost with Xbox. It says it right in the article.

Originally posted by Future Starlocke
loss of some $348 million for Microsoft's home and entertainment division. Last year the division, which incorporates Microsoft's PC games and TV products, posted a loss of just $180 million.


Yeah.

The attach rate is something like 4 games per Xbox. That makes up the 100$ lost right there.

[Mike]

SIMS online is garbage....microsoft and xbox rule

[HellSpawn]

Yeah well, when you got a thousand dollars, throwing away 10 bucks wont hert ya.

[PremierAudio]

I think the point here is that they ARE losing money. Unless you have been in a dark void for the past years then you should know already that microsoft is so damn rich that losing that much money doesn't matter at all to them. But the fact is that they ARE losing money. Dont bring up extremely obvious facts.

[sagara0510]

VeNoM did YOU read the quote?

Originally posted by Future Starlocke
According to a recent Reuters report, Microsoft's losses on the xbox almost doubled in the final quarter of last year, contributing to an overall operating loss of some $348 million for Microsoft's home and entertainment division.

need i say more? i think the quote says it all

[VeNoM]

Originally posted by sagara0510
VeNoM did YOU read the quote?

Yep.

Originally posted by Future Starlocke
loss of some $348 million for Microsoft's home and entertainment division. Last year the division , which incorporates Microsoft's PC games and TV products, posted a loss of just $180 million.


contributing on dictionary.com

adj : tending to bring about; being partly responsible for;

Xbox contributed to the overalloperating loss of some $348 million for Microsoft's home and entertainment division.

[sagara0510]

*sigh*
ok let me try and narrow down the part i was trying to emphasise

Originally posted by Future Starlocke
According to a recent Reuters report, Microsoft's losses on the Xbox almost doubled in the final quarter of last year

of course the xbox contributed to the overall loses of Microsofts entertainment division, but the quote specifically says that the xbox losses have almost DOUBLED.

[Prince]

Whats the point of this thread? to bash Xbox? All the hardware makers loose money in hardware and make it up in software. Why wouldn't the Xbox losses have doubled? They lose 100$ or so on every console. The more the console sells the more money they lose. Simple as that.

And sagara0510, the Xbox's losses have doubled from before, because its been selling more. They did not loose 348$ million on the Xbox alone, and they did not loose 180$ million on the Xbox alone before. It's the combined sales of Microsofts entertainment division, Xbox only contributed to that.

[sagara0510]

*sigh*
wtf is wrong with all you people
can't you read or something?
i KNOW the $348 mill is the total loss of M$'s entertainment division. i never said the xbox made a loss of $348 mill. noone said that. i am simply stating that the the xbox losses have doubled in that period which is what this thread is simply about.

i am fully aware that they are losing more because they are selling more. *sigh*

forget this

[Freeman_JI]

Thanks for the GOOD news Future Starlocke, it is well known that the xbox looses out big time in hardware because of the loose on each system. This of course means that the xbox is selling well duh!

Nintendo would kill for some sales like this (cube)

Any way Future Starlocke nice try but don't try to insult our intelligence.


Phanta edit

[Prince]

Fair enough. I don't get how this is even threadworthy though. Captain obvious to the rescue. yay.

[smellslikenintendospirit]

This is thread-worthy because:

a) It gives us an idea of Microsoft's losses

b) It implies that Xbox is a major part of the total losses

c) It implies that Xbox sold well during the Holiday Season.

THEREFORE, it is REDUNDANT to say:

a) Microsoft loses a lot of money

b) The loses are because of xbox

c) That's only because xbox sold more


It is also pointless to look up "contributed" in the dictionary and highlight "partly". The news clearly emphasizes that Xbox's losses account for a major part of the loss, the keywords being "major part".

My personal contribution to this thread:

http://www.nintendo.com/corp/financial.html

The above link gives will assist us in comparing Nintendo's financial status with Microsoft's. It should also help us logically arrive at further conclusions. :confused:

[Future Starlocke]

Thanks for that link, Smells...

But also look at this: Microsoft loses $100 per console... Gamecube loses $20. Four games must be sold by Microsoft in order to compensate the loss and barely turn a profit for ONE console, wheras Gamecube requires perhaps one or two (depending on 1st or Third Party).

Nintendo's doing better business by far... like I so often have to point out, "Fine and dandy you sold a million X-Boxes... but you're still 300 million in the hole... what's it matter?"

[Michael Bluth]

But 4.7 games are sold per XBox sold, lessening to hit.

[Future Starlocke]

...and where's the .7 from? You might own 4.7 games (or 15 for that matter), but that's just some people raising the curve. There are still lots of people who have only Halo or the two pack-in games.

[Michael Bluth]

The .7 is from an average of games per systems sold, of course.

[Colin™]

4.7 is the AVERAGE.

Lets say microsoft sells 40 xboxes, and 180 games. That would mean that the aveage games per xbox is 4.5 Are you now accusing xbox of faulty numbers because you don't understand a freaking equation?!

My god, the fanboyism in this place....

[Future Starlocke]

Originally posted by Colin
4.7 is the AVERAGE.

Lets say microsoft sells 40 xboxes, and 180 games. That would mean that the aveage games per xbox is 4.5 Are you now accusing xbox of faulty numbers because you don't understand a freaking equation?!

My god, the fanboyism in this place....

Eh... didn't I address the "curve" in the same post?

[Michael Bluth]

If it was curved, it'd be 5 games per system sold.

[Future Starlocke]

But there's not 5 games per system sold... like I said I know people that ran out, bought the box and Halo and that's all they have to this day. It is an average... raised by kids who don't believe in rentals (like this idiot I know that owned 23 PS2 games and ended up selling all but 5 last month).

[Michael Bluth]

Well guess what? For those people who only buy 1 game there are people like me, who own 16 games; and my collection is still growing. There are a couple older gamers (dads) who have 40 or so XBox games. As stated, it's the average.

[Future Starlocke]

I find it astonishing people buy 40 games for any console... the most I would consider would be for the old NES... I could name 40 games I would buy if they were cheap enough now.

[Prince]

Originally posted by Future Starlocke
...and where's the .7 from? You might own 4.7 games (or 15 for that matter), but that's just some people raising the curve. There are still lots of people who have only Halo or the two pack-in games.

.7 is the AVERAGE - When the average is 4.7 games sold per system (attach rate. Meaning they bought their xbox WITH 4.7 aka 5 games. It doesn't mean they only have 5 games total.)

When the average is 5 games sold per system, it doesn't matter if the minority only has 2 or 3 games

Originally posted by Future Starlocke
But there's not 5 games per system sold... like I said I know people that ran out, bought the box and Halo and that's all they have to this day. It is an average... raised by kids who don't believe in rentals (like this idiot I know that owned 23 PS2 games and ended up selling all but 5 last month).

One word: AVERAGE

I know people who have one GCN game. I have 4.
I know people who have 3 Xbox games. I have 14.

So i ask you, does it matter if one Xbox owner bought 1 game, and another Xbox owner bought 15? It doesn't even itself out?

[Travis]

I have an off-topic statement. Has anyone else realized that "smellslikenintendospirit" 1) has a stupid name, and d) only posts in threads that bash Xbox? I think it's retarded.

Now to the on topic discussion. MS may be losing money now, but eventually it will come back up because Xbox is selling better and better every month.

[Prince]

They never expected to get profit off of the Xbox. They knew that. Xbox is just a stepping stone for Xbox 2.

[Future Starlocke]

Originally posted by Suzuki Fanboy
I have an off-topic statement. Has anyone else realized that "smellslikenintendospirit" 1) has a stupid name, and d) only posts in threads that bash Xbox? I think it's retarded.

Now to the on topic discussion. MS may be losing money now, but eventually it will come back up because Xbox is selling better and better every month.

You'd think that, right?

In an article I posted here a loooooong time ago, Microsoft's own developers, decision makers or whatever pretty much told Bill Gates right off the bat "There's no way we'll turn a profit from it for at least four to five years"... and in fact, PLANNED on losing millions.

Last thing, if you don't understand already... the more X-Box consoles sold = bigger debt. There's no way in hell they'll turn a profit alone from the console, that's why they're spending two billion dollars on advertising every little game coming out for the system, because that's the only way they'll turn a profit. For fuck's sake, they ran a national ad campaign for Toe Jam and Earl...

I would also think that the more consoles sold, the more games would be needed to be sold to "cover the loss"... would I be wrong in thinking that?

[Travis]

Hmm...this is quite the odd economic predicimate (sp?) that MS is in...hard to understand, also :D

Well, I think Prince might be right in what he said, but I guess we'll just have to wait and see, eh? For now I'll enjoy my Xbox and PS2, and soon GCN. YAY!

[Colin™]

So, FS, why are you so concerned about their financial well being?

[Future Starlocke]

Originally posted by Colin
So, FS, why are you so concerned about their financial well being?

To illustrate a point. Just because the 'Box is neck and neck with Gamecube for sales in US doesn't mean it's succeeding. What good's it do a console maker to lose insane amounts of cash just to say "We've sold a million of them!"?

In comparison, NGC's would have to sell for $79.99 a piece with two free games to "make the big console sales"... but then they'd have to sell freakin' 5 games to every person to turn a profit... not making the big bucks that it is today.

A company doesn't exist on hype... it exists on money.

[Michael Bluth]

Originally posted by Future Starlocke


To illustrate a point. Just because the 'Box is neck and neck with Gamecube for sales in US doesn't mean it's succeeding. What good's it do a console maker to lose insane amounts of cash just to say "We've sold a million of them!"?

Neck and neck? You might wanna check those numbers one more time...........

[Prince]

Originally posted by Future Starlocke
To illustrate a point. Just because the 'Box is neck and neck with Gamecube for sales in US doesn't mean it's succeeding. What good's it do a console maker to lose insane amounts of cash just to say "We've sold a million of them!"?

I don't think you understand.

Xbox is all about marketshare not profits. If they sell a million of them, they gain marketshare. Thats their goal. If their goal was to sell Xbox's and make a profit, then you would have a valid arguement. Xbox is just a stepping stone for Xbox 2. Xbox Live will be available from launch, and they're trying to secure exclusives and purchase developers, etc.

Neck and neck in the US? Have you seen the sales numbers? The gap in USA is almost as big as the gap between GCN and Xbox in Japan. Xbox is ahead in USA by over a million.

[Colin™]

Originally posted by Future Starlocke
A company doesn't exist on hype... it exists on money.


The ironic thing about all this is when you're microsoft, you actually can exist on just hype.

[Travis]

Originally posted by Colin



The ironic thing about all this is when you're microsoft, you actually can exist on just hype.

LOL good point :D

[Future Starlocke]

Originally posted by Colin
The ironic thing about all this is when you're microsoft, you actually can exist on just hype.

Good one... Microsoft can even convince gamers to "upgrade" to XP. I know some suckers that still think 2000 Server Edition "0wnZ".

Windows 98 SE baby...

[Future Starlocke]

Originally posted by Prince
I don't think you understand.

Xbox is all about marketshare not profits. If they sell a million of them, they gain marketshare. Thats their goal. If their goal was to sell Xbox's and make a profit, then you would have a valid arguement. Xbox is just a stepping stone for Xbox 2. Xbox Live will be available from launch, and they're trying to secure exclusives and purchase developers, etc.

Neck and neck in the US? Have you seen the sales numbers? The gap in USA is almost as big as the gap between GCN and Xbox in Japan. Xbox is ahead in USA by over a million.

A million? Is that all? Just wait. Skepticism will be put to rest officially by Jan 01, 2004... I promise you, I've got some grand "DO NOT PUBLISH UNTIL" announcements right here that will make even the most Jaded X-er salivate for the cube.

[Michael Bluth]

Originally posted by Future Starlocke


A million? Is that all? Just wait. Skepticism will be put to rest officially by Jan 01, 2004... I promise you, I've got some grand "DO NOT PUBLISH UNTIL" announcements right here that will make even the most Jaded X-er salivate for the cube.

Bull. If you had that kind of information, you would have posted it here the minute you saw it. I have access to press aswell, and there's never anything like that. You can't supply a link or anything.

[Future Starlocke]

Originally posted by Phantagram
Bull. If you had that kind of information, you would have posted it here the minute you saw it. I have access to press aswell, and there's never anything like that. You can't supply a link or anything.

Heh... and lose the press pass? Go find it yourself... and I'll give you a hint: It ain't on xbox.com... lol

[Michael Bluth]

I have a couple press passes myself, thanks to a friend of mine who owns a movie site (www.themovieinsider.com); and as I said, I have yet to see anything like that.

[Future Starlocke]

Originally posted by Phantagram
I have yet to see anything like that.

Well... I suppose that's all there is to say about it then, eh?

[Prince]

Originally posted by Future Starlocke


A million? Is that all? Just wait. Skepticism will be put to rest officially by Jan 01, 2004... I promise you, I've got some grand "DO NOT PUBLISH UNTIL" announcements right here that will make even the most Jaded X-er salivate for the cube.

Yeah, right.

I got a few press passes too, and i have a few announcments that would make GCN owners purchase an Xbox right away. Microsoft is buying Retro!

yeah, considering your DDR online was fake, you would think i believe you?

[JackieChanIsGOD]

I hate all of you...
Shut the fuck up!

[Michael Bluth]

I noticed you took the thing about Starlocke being your new best friend out of your signature, so I assume you are directing it towards him.

[JackieChanIsGOD]

Haha naw... It was just the cleaning of the sig that took it out...
I'm directing that to everyone... even me...
We bitch and moan WAY to much about ANYthing...
We should have more eventful lives than this shit...

[sagara0510]

damn right jackie

after reading most of this thread, my fingers can't be stuffed typing up an argument.

basically it goes this way

+ve xbox: we don't care about the money. we're bloody loaded anyway. we want market share. fair nuff

-ve xbox: they're losing $100 per console. thats freakin stupid. poor business strategy. who tries to promote something thats is losing money. they should cut their losses. fair nuff too

i have no real opinion either way. i'm doing my bachelor of commerce atm (boring as hell) and both arguements are valid statements.

so to conclude....basically....bill has too much money!!!

[Future Starlocke]

Jackie... does this mean we can't see each other on the weekends anymore? :(

[JackieChanIsGOD]

Originally posted by Future Starlocke
Jackie... does this mean we can't see each other on the weekends anymore? :(


Of course not!
those are special times my friend...

:D:D;) :hump: