Microsoft to turn an Xbox profit in 2008?

I hope not. Isn't it said that if they don't turn profit, the whole division is canned? I want to see that.

Yes. I hate the Xbox. Some of the games are good (few,) but for reasons that are beyond my understanding, I hate that console and everything it stands for. Wouldn't mind seeing some of the IPs on other systems.

@Geist
That's an interesting perspective. You acknowledge that you like some of the IP in the Xbox ecosystem and yet, without the Xbox, many of those IPs may not have seen the light of day. Be glad that there is a heck of a lot of competition so that more high quality games come out for all systems! I know I am...even if I am firmly in the Xbox corner. Well, except that I have a DS too...

Remember, 'Turning a profit' in 2008 doesn't mean 'In 2008, Microsoft will make back the infamous 4 billion-dollar loss on Xbox'

I love my xbox & 360 but this is just an expensive foray into a market Microsoft felt it needed to be in. It's really quite a money pit for Microsoft. I hope the pockets stay deep - the upside of Microsoft's stubborn nature is that this is great for gamers!

you won't see MS "go down like a girl on prom night" any time soon. you'll see sony "bite the big one" before anyone else. it's obvious that the "wee" Wii is here to stay as well. so get that "cob" outta your butt and just enjoy your gaming choices. yes, i am part of the Flame Patrol. and you are on our list there "Geist." if that is your real name. hack

Well, considering Microsoft sold 0, yes, zero (not a typo) Xboxes in Japan, they are on the right track.

Link: http://www.cubed3.com/news/5586

BIGGEN,

I don't mean to be a whiner, because I really do ahbor whiners, but... I can't say I'm terribly smitten with the analogy you "quoted" in your opening sentence.

Umm... that's all.

This is far bigger than Japan Hiro. This about conquering the WORLD! Muhahaha...but seriously. Japanese gamers feel like they control the market. You dont. American gamers will be happy with GTA and Halo. Get over yourself.

Whoops, forgot to mention that it applies to last week. Of course Microsoft sold Xboxes in Japan, it wasn't that big of a failure.

Go to http://www.savetheinternet.com while you are at it.

@ Hiro Protagonist
We all know that the Xbox failed in Japan. Why would that be important now that the 360 is in the market. This week alone the 360 nearly sold more than the entire life cycle of the original Xbox (1472 360s sold this week, 1,599 xboxes sold ever -- according to your source). Going from 1600 sold over 5 years to 61,000 sold in 10 months is not a "win" but at least it's an improvement.

i'm sorry i offended you zoe. really sorry. really really sorry. with sugar on top. it's a comment board. get over it. i do like the use of the word smitten tho. one of my favorite words.

The total hardware sales is 2006 only.
But yeah, the 360 is doing well all things considered.

What I'm saying is, if they stop losing money on the Xbox there is less loss. Less loss = more profit if gain = same or more.

I want Microsoft to do well just like everyone should.

I know this site doesn't attempt to be serious in it's journalism, but phoney quotes really cross the line. That's as bad as typing your entire post in all caps. Worse, really.

@1

You are missing out on one of the sweetest system ever released, the 360. Especially in tandem with a Media Center PC. I mean there are way too many incredible perks to having a media center server with xbox extenders throughout your home. Gaming on the 360 is an f'n blast and being able to access my entire multimedia collection and beyond (Movielink, Cinemanow, MSN music or 99% of the other online music stores) in any room I have an xbox is the epitomy of entertainment to me. Never has a suite of hardware made this kind of experience so easy. It's not perfect but it's a great step in the right direction that will only inspier Microsofts competitors to try and improve on it. I hope people catch on and MS's xbox division starts raking it in, cause I definitely want to see their vision of gaming and connectivity evolve.

Actually, didn't Microsoft have a video games division before the creation of the Xbox, just one that focused on PC gaming? I'm fairly certain they did, and that it was modestly profitable before the Xbox division came into being.

Thus, you should say that in 2008 Microsoft stands a chance to see the first fiscal year profit in the Xbox division, or perhaps the first such profit in the Games division since the launch of the Xbox.

u xbox fanboys r so ignorant nd fun^^
u say u give a fuck bout the japs market, cuz u r goin to play halo 1,2,3 whatever..
1 tiny little hint: the xbox..how long did it stay on the market..? nd then for the 10.000$ question: where did the xbox fail bigtime?
looks like a job for sherlock..

You'll all be happy to know that the XBox 360 hardware is failing during normal usage. I'm not kidding. Chromehounds breaks the system after you play it long enough. Sega blames Microsoft. Microsoft blames Sega.

Overall, I think this may be an indication that the 360 is on its way out. If it can't play a game normally without malfunctioning, that's a bad sign.

Links: http://www.gamespot.com/xbox360/action/chromehounds/news.html?sid=6154332

http://boards.sega.com/chromehounds/viewtopic.php?t=1476

http://boards.1up.com/zd/board/message?board.id=Xbox360&message.id=96327&view=by_date_ascending&page=1

Personally, I'm very, very sad about this. I love my 360. And I loved Chromehounds. Now I'm scared to play the game, and I think my 360 may break at any moment.

Anyway, there's a little something to make you anti-Microsoft people giddy.

Tetranitrocubane, you should be scared of to play Chromehounds. Every reviewer (IGN, gamespot, 1UP, etc) has said it sucks. Just leave it alone.

Just how many Xboxes do you have labrynthos? That doesn't seem like much of a benefit unless you have a TV and Xbox everywhere you want to listen to music. Just get an iPod, or an Airport Express (allows you to send any music from a pc/mac to a set of speakers in another room).

As far as turning a profit goes, ill trooper says it best. Losing 6 billion dollars to get one year of turning a profit before starting to work on the 3rd Xbox iteration and plunging into losses again sounds pretty unhealthy. If they have to lose money three out of four years on every console they come up with I think they may only come up with three. Ever. Stockholders won't put up with it forever.

@ #15, Tetranitrocubane:
Well, Sega sure knows how to make gaming consoles sink.

Hey, even us Sega fanboys must make fun of our beloved companies sometimes...

I hope that no company drops out, if they do, hopefully another one will join.

UberSnuber Xbox 360 fanboys might be playing Halo 3, 4, 5 but PS3 fanboys will be playing Riiiiiiidge Racer 9,000; Final Fantasy 13-13-13 thru 10,000; Tekken 5, 6, 7, 8, 9...; Devil May Cry Forever, Onimusha Forever, Crash Bandicoot Forever, Resident Evil 5, 6, 7, 8, 9....etc.

It's too late to ignore it entirely. The single player was a snore and a half. The multiplayer was a blast. Honestly, squad based mech combat is fun, and all the online reviews seemed to ignore the multiplayer. The demo's a joke, too. But multiplayer was worth the price of admission.

After seeing these system-borking problems, though? Yeah. Wish I had left it alone. I just hope no damage has been done.

WARNING : I AM A NINTENDO FANBOY!

Well, not really, but I've never owned an Xbox or 360. I do have many nintendo products and a PS2. However, I think its incredibly important that microsoft survives. Someone has to challenge both Sony and Nintendo to continue to make good games/systems. I'm not convinced of the PS3 yet (too $$, not enough games *I* want. . . yet). I truly belive that the 360 changed both Sony and the big N's plans. It forced N to innovate rather than get into the Horsepower war that Sony chose.

"Yes. I hate the Xbox. Some of the games are good (few,) but for reasons that are beyond my understanding, I hate that console and everything it stands for. Wouldn't mind seeing some of the IPs on other systems."

Wow, substitute "Xbox" for "PS2" and you'll have my feelings matched fairly close! This is where someone says, "But there are more than a "few" good games for the PS2. Yes, but I've already forgot about most of them. Play through once, beat the game, and you're done. Co-op? Online Play? REPLAY VALUE? Nope.

The cost per entertainment hour, even with XBL, is a much better value for me with the Xbox than with the PS2 including the cost of the console. Hell, even the Gamecube was a better cost per hour for me than the PS2.

So where is the Nintendo person to come in and interject? Don't forget, as individuals, we're always right. If we are wrong, we are RIGHTLY wrong. See how it works?

The 4 billion loss over the lifetime of the original Xbox is already a sunk cost. It's not like Microsoft needs to make 4 billion to cover that cost. According to their recent fincial report, Microsoft is carrying zero debt. They made 33 billion in gross profit, and they have 31 billion is cash on hand. The company is worth 209 billion in enterprise value.

If you look at Microsoft historically, they invest a lot of money in every field they've entered. And not all fields are profitable or profitable right away, but they have the potential to be profitable. It took years for Windows to make money. They knew entering the console market would cost billions. It's not totally unexpected. Over the long term, and we're just into their second console, they can turn a profit at the division. It's not about the hardware. It's about the software, licensing, accessories and ancillary sales. The hardware drives the sales of the other potential revenue streams.

I don't see Microsoft leaving the video console market anytime soon. They're a long term player. And they have the reserves to hold on for a while.

If you look at Sony in comparison, you'll notice they're worth 49 billion in enterprise value, they made 15 billion in profit, have 5 billion in cash on hand, and they're carrying 9 billion in debt. Surprising, Sony's profit margin is 1.65%, where Microsoft's profit margin is 28%.

Sony, while a major corporation, is much more impacted by the game console market than Microsoft would be, if their console were not to sell well.

Incidentially, turning a profit by 2008, is about right. I wouldn't expect Sony to see a profit with the PS3 until about the same time frame or shortly thereafter. Nintendo, I believe is best setup to recover profits quickly, but it's still too early to make any final determination just yet.

Cabbage,

I have a 360 and television in my entertainment room, an original xbox and tv in my bedroom and the Media Center PC itself in the living room. So at any of those 3 points in my home I have full access to my music, photo, movie, internet browsing, live TV and DVR'd TV. All within the slick, easy to use interface of Media Center. Not to mention the library of games, which I love. It really needs to be experienced to get the full gist. I'm talking way beyond airport and an ipod.

Plus to take it all with me I have a Creative Labs Vision M that allows me to carry any of the same content from my pc. I have it set to automatically synch the last weeks worth of any new content added to my library, including TV shows, music, photos, etc.

I just get tired of everyone dissing on MS when they are the only ones out there offering anything like this out of the box.

LongshotX :
that was not my point!
my point was regarding the xbox, not the games.
If xbox fanboys sneezes at the japs console charts, they should know that it was those whimpy japs who sent the first xbox to a early funeral(maybe not the main reason, but i would gess top 3)..

Okay, guys, time for some adult sense here - that, and some information that will NOT make some of you feel good.

@Hiro, #5 - Wow! Zero Xbox sold in Japan - that matches the total Xbox production for the last 4 months. Microsoft is NOT making the Xbox anymore - and quite honestly, other than cranking out games for them, doesn't care a whole lot in the scheme of things about selling what few remain.

The whole thing doesn't sound right. As a division, Entertainment and Devices has issues with profitability. The reason being is the introduction of new material all the time. A certain product may be profitable, but that profit is offset by start-up costs of a new product.

As for gaming - the Xbox 360 console itself is supposed to be actually profitable itself next month. I suspect what's going to make the division itself in the red for a little while longer are the development costs for the new accessories, plus the infrastructure needed for Live with the camera. Remember, this holiday will see the launch of the HD-DVD player, the wireless racing wheel, the 256MB memory unit, the PC gaming receiver, the wireless headset - and the camera launches very soon. Throw in a few first party game development costs (I'm thinking H3, N3, etc.) and once holiday settles down, I bet Robbie gets to revise his estimate positively.

[quote] Bill Gates said, "I eat pieces of crap like you for breakfast," [/quote]

Thats gross, he eats pieces of crap for breakfast?? what a sick weirdo!

" WARNING : I AM A NINTENDO FANBOY!

Well, not really, but I've never owned an Xbox or 360. I do have many nintendo products and a PS2. However, I think its incredibly important that microsoft survives. Someone has to challenge both Sony and Nintendo to continue to make good games/systems. I'm not convinced of the PS3 yet (too $$, not enough games *I* want. . . yet). I truly belive that the 360 changed both Sony and the big N's plans. It forced N to innovate rather than get into the Horsepower war that Sony chose"

I'm a Sony/Nintendo Fanboi and yet, i agree with this statement in that A third console maker does need to be in place as to make the industry competitive and not monopolize it which is what MS is trying to do. No Dont believe me?? Then why make Halo 2 ONLY playable on windows Vista?? Makes you wonder what other titles they will make Vista-Only?? Also because of this:

"The 4 billion loss over the lifetime of the original Xbox is already a sunk cost. It's not like Microsoft needs to make 4 billion to cover that cost. According to their recent fincial report, Microsoft is carrying zero debt. They made 33 billion in gross profit, and they have 31 billion is cash on hand. The company is worth 209 billion in enterprise value."

I hate MS because of this fact. They think they can just come in the game industry and try to take over JUST because they have the 'bill gates behind us' confidence. Its not because they are innovative, it ONLY because they KNOW they can afford mistakes because of Bill "i eat shit" Gates.

This is why i respect Nintendo and Sony more. They have everything to lose. They can't afford mistakes. They have 'earned' their way into the industry by taking big investment risks and actually succeding. But MS is taking a risk. No they are not. With those kinda of losses Nintendo and Sony would be finished. MS FORCED themselves to the 'mainstream well take Halo and think its innovative' america and it unfortunately worked.

I would like to see a better 3rd place canidate, just not MS.

"I hate MS because of this fact. They think they can just come in the game industry and try to take over JUST because they have the 'bill gates behind us' confidence."

Hmm...sounds a lot like what Sony did. If you are afraid of change and a "new" console on the market then go hide under the bridge, troll...

jojo29 -

The problem is, at this point, to break into the field, you need to have gobs of cash to lose. No matter who picked up the third console, the losses in the first generation were going to be colossal. The problem is there simply aren't many companies on the planet that can pull that off. The few exceptions would be General Electric and Wal*Mart. One of them has absolutely no consumer electronic or entertainment software background and the other is a retailer.

When Nintendo got into gaming, the market was in a slump. They didn't need a large capital account to get into it. There was no competition. Sony piggy-backed on Nintendo's know-how, so by your standards, they are just as invalid a gaming company as you're making Microsoft out to be. Neither company earned it by clawing through crowds of competition. One had no competition and the other was handed the market on a silver platter.

As it stands, Microsoft is the ONLY viable third party alternative. Anyone else that tried failed miserably. They simply didn't have the capital to back up their investment. 3DO, Phillips and Atari could not sell their console at huge losses to make them commercially attractive and the Phantom is a pipe dream.

Breaking into any established market takes huge investments, and no other company has the hardware and software know-how to make a viable third alternative to Nintendo and Sony. Microsoft is it. Don't hate on them because they know how to run a business.

Dont be surprised if you see kutaragi wearing silver and green in '08

I say this because there's no way in hell sony messed up so much goodwill in a short time. This console war was theirs i think since kutaragi was reshuffled he wants revenge and Bill Gates could paying him to fix this war

Bill Gates is paying Kutaragi to fix this console war lolol. Sony should have not reshuffled him.

"Yes. I hate the Xbox. Some of the games are good (few,) but for reasons that are beyond my understanding, I hate that console and everything it stands for. Wouldn't mind seeing some of the IPs on other systems."

Wow. What a small-minded individual. I don't hate any of the console manufactures. I don't hate Sony, I don't hate Nintendo and I don't hate MS.

Why? Because I love gaming. Plain and simple. Why would I want to see a piece of my hobby fail and die, whether it was MS, Sony or Nintendo.

Pathetic. But I'll take your comment with the knowledge that you probably are still a thumb sucker who can't see the world from his mother's skirt.

whats gonna happen when all those new gamers nintendo recieve wanna play more mature games in 2-3 years they gonna but a $200 360 as their second console. In the black in '08 indeed

Great post #34. Well said.

I mean #35

Where are the Xbots who said the Xbox division would turn a profit next month?

And remember this is just an estimate. It may happen earlier or later...making back the 6 billion dollars they lost to date, plus the 3 other billion dollars they are going to lose until 2008, it will take them 10 more years to recover their initial investment.

Hopefully, their shareholders don't care and will let them sink all that money based on this new promise.

In Japan, I think if we will calculate by 2008 (when xbox starts to be profitable), and lifeline stays until 2010, with xbox sold at 1 per month, at a price of $129, then that would be $4,644.00.

The losses incurred through the introduction of Microsofts Xbox was extreme amount of money to lose. But considering Microsoft intering into the market by buying another console division (Like Nintendo) would have cost extremely more. Hopefully with the possibility of the Xbox 360 making a profit, there would be better games available. Plus with competition being tight (hopefully) the creation of good games on all systems must be a priority.