Bloomberg states that "Microsoft expects to sell 4.5 million
to 5.5 million of the Xbox 360 consoles in fiscal 2006 [from the beginning of July of this year to the end of June
in 2006]." Analysts had expected closer to 6 million consoles to be sold during that time, with a shortage clearly
"through the end of the March quarter."
Not only that, the Home and Entertainment division of Microsoft, which includes the Xbox and upcoming Xbox 360, "was
the only division in the company to perform worse this quarter than for the same quarter last year," referring to the
first quarter of fiscal year 2006 [via GameSpot]. Granted,
the huge settlement with Real hurt operating income and
earnings per share, but console-generation transition-induced sales dips and 360 launch expenses likely contributed
detrimental effects on MS's bottom line as well.
Underestimating 360 sales could be a conservative move on Microsoft's part in light of system supply concerns, but the
Xbox division should see greener fiscal pastures if it doesn't lose as much money on 360 hardware as it still does with
the original Xbox this generation. It is interesting how the financial situation is reversed with Sony, where its
gaming division provides the bright spot in its corporate portfolio, while the rest of Microsoft's software business
has shored up the Home and Entertainment losses up to this point.
[Thanks, Anand]
Xbox division lags in MS quarterly report; 360 sales expectations lowered?
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