Xbox, back in the toilet again.

[theWacoKid]

Well, that didnt' last long, one whole quarter in the black, and now back in the crapper as per usual.

Xbox back in the red in latest Microsoft figures



Rob Fahey 13:22 29/04/2005
Home and Entertainment Division records an operating loss for the March quarter

Software giant Microsoft has announced its financial results for the first quarter of 2005, revealing that while the company overall saw solid profit growth, the Xbox division slipped back into the red with a $164 million operating loss.

Revenues in the Home and Entertainment Division, which primarily houses the Xbox project, actually grew year on year - rising to $583 million from $519 million in the same quarter last year.

The operating loss in the division also dropped year on year, falling to $164 million from $204 million, which could be seen as very positive - but can equally be interpreted in light of the fact that the previous quarter, ended on December 31st, saw the division post its first quarterly profit since the launch of Xbox.

That profit, $84 million on revenues of $1.27 billion, was largely driven by sales of Halo 2, while the first calendar quarter of 2005 has been much quieter for Microsoft on the software front. The firm will undoubtedly be hoping that the current quarter will be healthier, however, thanks to the launches of Jade Empire and Forza Motorsport.

In terms of Microsoft's overall performance, a little hit from the Xbox division certainly hasn't made any dent in the giant's progress. Overall revenues of $9.62 billion were reported for the quarter (up from $9.17 billion last year), with a gigantic operating income of $3.3 billion (up from $1.3 billion).


This quarter wiped out all the proft from last quarter with change to spare. As for Forza racking up big sales, don't hold your breath. The xbox is glutted with racers, it's coming way too late to sway ps2/xbox owners to switch from GT4. GT4 has already had its run.

I guess my big question is does MS even a business plan to make money in the videogame business, or are they just going to keep dumping money into a bottomless pit. If they only way they can make money is with a mega hit game every three years for a single quarter, they might want to rethink their business strategy.

[DrunkenThumbmaster]

Well, that didnt' last long, one whole quarter in the black, and now back in the crapper as per usual.

Xbox back in the red in latest Microsoft figures



Rob Fahey 13:22 29/04/2005
Home and Entertainment Division records an operating loss for the March quarter

Software giant Microsoft has announced its financial results for the first quarter of 2005, revealing that while the company overall saw solid profit growth, the Xbox division slipped back into the red with a $164 million operating loss.

Revenues in the Home and Entertainment Division, which primarily houses the Xbox project, actually grew year on year - rising to $583 million from $519 million in the same quarter last year.

The operating loss in the division also dropped year on year, falling to $164 million from $204 million, which could be seen as very positive - but can equally be interpreted in light of the fact that the previous quarter, ended on December 31st, saw the division post its first quarterly profit since the launch of Xbox.

That profit, $84 million on revenues of $1.27 billion, was largely driven by sales of Halo 2, while the first calendar quarter of 2005 has been much quieter for Microsoft on the software front. The firm will undoubtedly be hoping that the current quarter will be healthier, however, thanks to the launches of Jade Empire and Forza Motorsport.

In terms of Microsoft's overall performance, a little hit from the Xbox division certainly hasn't made any dent in the giant's progress. Overall revenues of $9.62 billion were reported for the quarter (up from $9.17 billion last year), with a gigantic operating income of $3.3 billion (up from $1.3 billion).


This quarter wiped out all the proft from last quarter with change to spare. As for Forza racking up big sales, don't hold your breath. The xbox is glutted with racers, it's coming way too late to sway ps2/xbox owners to switch from GT4. GT4 has already had its run.

I guess my big question is does MS even a business plan to make money in the videogame business, or are they just going to keep dumping money into a bottomless pit. If they only way they can make money is with a mega hit game every three years for a single quarter, they might want to rethink their business strategy.

I know this is going to come off like a bill gates love letter. But I truly Believe that MS whole point of the Xbox was just to get there name out there establish the brand and some franchises. Of course they didn't want or expect to take the type of hit there are taking but I don't think Profit for this gen was the main goal. How will that play out I don't know and won't debate but we'll see.

[theWacoKid]

I know this is going to come off like a bill gates love letter. But I truly Believe that MS whole point of the Xbox was just to get there name out there establish the brand and some franchises. Of course they didn't want or expect to take the type of hit there are taking but I don't think Profit for this gen was the main goal. How will that play out I don't know and won't debate but we'll see.

Ultimately, the goal is to make money. There was incentive for sony to enter the games market. Diversify from low margin hardware business to high margin software business. But, with MS, they're already in a high margin software business. Why take big losses on hardware needlessly. I think MS is in the games market, because they're afraid of sony and sony doesn't want to use their software for the ps2 or ps3. Sony has deliberately avoided using any form of windows or windows development tools for its gaming systems, unlike the ill-fated dreamcast which used the CE operating system from MS. If sony were to turn around and sign a multi-year agreement with MS agreeing to use MS windows, XNA, and all their tools, I wouldn't be suprised to see MS bail on vidoegames in a flash.

[Fivespot]

Ultimately, the goal is to make money. There was incentive for sony to enter the games market. Diversify from low margin hardware business to high margin software business. But, with MS, they're already in a high margin software business. Why take big losses on hardware needlessly. I think MS is in the games market, because they're afraid of sony and sony doesn't want to use their software for the ps2 or ps3. Sony has deliberately avoided using any form of windows or windows development tools for its gaming systems, unlike the ill-fated dreamcast which used the CE operating system from MS. If sony were to turn around and sign a multi-year agreement with MS agreeing to use MS windows, XNA, and all their tools, I wouldn't be suprised to see MS bail on vidoegames in a flash.

I don't think MS would consider leaving videogames in a flash even if PS3 decided to use their operating system or any other MS product. Videogames are bigger than all other forms of media and MS wants a piece of that pie (as does Sony and many other huge corporations).

I agree w/Drunken Thumbmaster that MS mainly spent this gen getting their foot in the door so to speak. Now they will attempt to capitalize on their marketshare.

Hence why they are changing their approach this time around - if all indications and rumors come to fruition.

[theWacoKid]

I don't think MS would consider leaving videogames in a flash even if PS3 decided to use their operating system or any other MS product. Videogames are bigger than all other forms of media and MS wants a piece of that pie (as does Sony and many other huge corporations).

I agree w/Drunken Thumbmaster that MS mainly spent this gen getting their foot in the door so to speak. Now they will attempt to capitalize on their marketshare.

Hence why they are changing their approach this time around - if all indications and rumors come to fruition.

MS has already talked about future plans for a standardized feature set for consoles and having the industry be like the dvd player market. One console to rule them all, with the specs set by MS and various hardware companies manufacturing the units. This is their ultimate goal. The whole noton that MS is thrilled about bleeding red ink with the hardware, forget about it. As for the new hardware, what's going to be different. You think MS won't be losing $100+ per console when and if they launch this year. Neither IBM nor ATI are in this segment to do anything other than make money. So, unless, MS has royalty deals with both, those custom chipsets are going to be costing beaucoup dollars. So, while MS has stated they will continue to support the current xbox, it doesn't mean they'll keep manufacturing it. I can't see it. Its losing money now, and when sony drops the price of the ps2 to $99, MS will probably cease production and clear out inventory rather than follow suit and take even bigger losses. Sony has cut their cost structure on the ps2 greatly with their revision.

MS's ultimate goal is dominance but not to the tune of subsidizing hardware for millions of households. Their first party is still the weakest by far and they outsource most of their first party efforts. Even the idea of PGR3 as a launch xbox 360 title is boring beyond belief. PGR2 sold far less than PGR. A third in the series to a gaming public weary of racing titles and sequels does not spell success. PGR3, Madden, Halo 2.5, all prettty meh at this point. PD0, well, if it came out for launch, I'd consider that a minor miracle.

[Horngreen]

Why does anyone bother trying to sway Waco to even consider a point of view other than his own. He would hate MS if they developed a one dollar pill that cured all forms of illness and then solved the ensuing popultion surge and hunger dilema that the pill would cause. He hates them and he always will. Unfortunately his hatred of MS and love of all things Sony is actually making me hate Sony. I think I'll just put him on my ignore list but his hate filled one sided rants make me have to post. I guess this is the system wars forum after all.

[GameLegend]

Why does anyone bother trying to sway Waco to even consider a point of view other than his own. He would hate MS if they developed a one dollar pill that cured all forms of illness and then solved the ensuing popultion surge and hunger dilema that the pill would cause. He hates them and he always will. Unfortunately his hatred of MS and love of all things Sony is actually making me hate Sony. I think I'll just put him on my ignore list but his hate filled one sided rants make me have to post. I guess this is the system wars forum after all.

Yeah....he tainted himself and the colour wont come off. But thats what is expected in system wars.

Boo Xbox, yah Nintendo, meh PS2.

[Mochan]

Diversify from low margin hardware business to high margin software business. But, with MS, they're already in a high margin software business. Why take big losses on hardware needlessly

They want to get into the high margin software business for consoles.

[theWacoKid]

Why does anyone bother trying to sway Waco to even consider a point of view other than his own. He would hate MS if they developed a one dollar pill that cured all forms of illness and then solved the ensuing popultion surge and hunger dilema that the pill would cause. He hates them and he always will. Unfortunately his hatred of MS and love of all things Sony is actually making me hate Sony. I think I'll just put him on my ignore list but his hate filled one sided rants make me have to post. I guess this is the system wars forum after all.

Yeah, right, look who's talking, mr. I only own an xbox who's dumped on sony every chance he's gotten. You do realize that a lot of what I'm saying is straight from the mouths of guys like Jim Allard before MS muzzled him. He talked about the videogame business in the future like they were dvd players. MS would standardize the hardware and sony and nintendo and others would put our the units and MS would sit back and collect royalties. MS has repeatedly attemtped to sell sony on windoze for development on both the ps2 and ps3 and has been soundly rejected each and every time. It ain't hatred, goombah, its what's MS has talked about and what they're actually interested in seeing happen. Sorry, but, I'm not making any of this stuff up.

MS is in this buinsess, because the thought of millions of pc like devices connected in a vast network NOT running some form of windoze terrifies them. They have no real intention in maintaining development studios, their recent actions in the last twelve months or so should tell you all you need to know. They employ a guns for hire approach, I think you'll find that the purchase of Rare hasn't sat well with them, so don't expect much in the way of acquisitions with MS. They've cut development staff, axed games in development and very good games btw and sold off studios. They'll contract out the majority of the work for their first party games.

MS is now looking to push stuff that's not gaming related, attemptiing linkage between your media center pc and your xbox, like this was some great feature. This was their whole CES spiel in a nutshell. Media center!! Is this what people want from the xbox, media center or games? What you think? MS is an easy company to hate for any number of reasons. When I hear a company talking standardization, what they're saying is that they want to force mediocrity down a consumer's throats. If and when you see any innovation, we'll let you know, and you'll take what you get and be happy with it. Yeah, I hate that kind of attitude with a passion and I don't think I should reward such a mentality with my hard earned dollars.

[trebor]

MS is now looking to push stuff that's not gaming related, attemptiing linkage between your media center pc and your xbox, like this was some great feature. This was their whole CES spiel in a nutshell. Media center!! Is this what people want from the xbox, media center or games? What you think? MS is an easy company to hate for any number of reasons. When I hear a company talking standardization, what they're saying is that they want to force mediocrity down a consumer's throats. If and when you see any innovation, we'll let you know, and you'll take what you get and be happy with it. Yeah, I hate that kind of attitude with a passion and I don't think I should reward such a mentality with my hard earned dollars.

My favorite part of the CES thing was when they had multiple hardware and network errors leading up to the Xbox actually getting the blue screen of death. And Billy was just sitting there doing a slow burn while this all happened.

I wonder how many people lost their jobs that day :D

[Jupiter_x]

MS is now looking to push stuff that's not gaming related, attemptiing linkage between your media center pc and your xbox, like this was some great feature. This was their whole CES spiel in a nutshell. Media center!!

I have seen these Media Center software bundles and even Demonstrations on the bigscreen TVs all over the place at Futureshop and now at that new Bestbuy in Burlington. I don't even know what it's for to be truly honest?
Is it for music and movie transfer?, Save games on your PC HD? hmmmm! can I play Xbox games on my PC or PC monitor now? Wait...what would be the point in that!!

[Mochan]

My prediction when the XBox was first announced was that it would be nothing more than a PC wannabe. Now with all these Media Center garbage, it looks like they really are turning it into a PC!

[King of Arcadia]

~Born to Play~

I just want to jump in here for a bit. Now what bothers me is that people all of a sudden think MS is in this because they want a foot hold or something in the gaming industry to help expand their Empire. This is true! However let us all not forget that Sony was in this for the same reason. To expand their Empire. Neither company is in this for the sake of gamers or the greater gaming community. This is simply an attempt to get a consumer electronic grasp over the gaming industry which just seems to have a multidemographic and large community of consumers. K.I.S.S; As far as things go in terms of who wants to make this a better community for gamers, and expand innovativing ways to GAME, not some other stuff like record your movie at home with your PSP on the train through wi-fi or anything of that nature. (Not pickig on Sony, just making a point)

The concerns of the greater gaming community and culture are far buried with the death of Sega as a first party, and are bubbled up in a strong bubble that continues to make Nintendo profits to survive age after age. No one should be complaining about MS or Sony, they came here, stated what they were about and they are doing what they stated that they are here for. They are still here and always will be, because they don't determine how long they survive. You all do. Reep what we've sowed and deal with it.

[Mochan]

One thing you have to consider is that a lot of people use MS simply because they have no other options. People *have* to use Windows since the options are to use Linux or a Mac, and those aren't options for a gamer at all.

Another thing to take note of is that MS isn't where it is because of "us" or our "sowing" whcih we must "reap." MS got into this position of monopoly through a lot of wheeling and dealing, and luck. The former w&d was something that MS totally controlled by itself, that wasn't something dictated by me. The strategic and ruthless business decisions they made were what made it happen, not my support.

I don't like Sony? When I want to watch a DVD I can go buy a Philips DVD player or something. Want to listen to music on the go? I don't have to buy a Walkman, I can get an iPod. Wanna watch TV? I don't have to buy a Trinitron or a Wega, I can get a Samsung.

But when I want to buy PC games, I just have to buy Windows.

[Gadfly2317]

They want to get into the high margin software business for consoles.

I believe they thought online gaming was going to be the next thing, and that if they threw everything and all that power into one plastic box, it would bring in the gamers. They got into this, not just for the prospect of the standardized media center but for the prospect of big dollars from online gaming subscription fees.

Their plan didn't work out though; not only did most of their base not sign up for online, but gamers didn't flock to "the most powerful system with the best graphics" because they blew the most important thing about a gaming system: Games.

And a lot of the gamers that did pick up Xbox did so because it had the best graphics. . . where are the graphics whores going to go next time when Xbox2 is not only the least powerful system, but still has the least diversity in its game lineup?

[theWacoKid]

I have seen these Media Center software bundles and even Demonstrations on the bigscreen TVs all over the place at Futureshop and now at that new Bestbuy in Burlington. I don't even know what it's for to be truly honest?
Is it for music and movie transfer?, Save games on your PC HD? hmmmm! can I play Xbox games on my PC or PC monitor now? Wait...what would be the point in that!!

Well, first off you need one of these new media center pc units, from what I can tell and then you need a router setup between the pc and the xbox. Then you'll be able to view your jpeg files from your computer on your xbox, listen to mp3s on your xbox from your computer and whatever. Okay I guess, if you consider this a big deal and MS certainly does, but its much ado about nothing imo. I mean, a lot of people have their bloody computer in the same room as the xbox.