In the last six years, there's been one constant when discussing Microsoft's foray into the strange and seductive world of video game console manufacturing: they had yet to turn a profit on any of it. No more, with today's announcement of Microsoft's second quarter earnings which showed a relatively impressive six-month income of $524 million (compared to a $423m loss during the same period last year) from the the Xbox's Entertainment and Devices Division.
Before you go thinking that was all thanks to the Zune and PC game sales, the company's 10-Q filing states that the EDD's increased revenue was "primarily due to increased Xbox 360 platform sales." During the last six months they say Xbox platform and PC game revenue increased 35% as a result of "increased Xbox 360 console sales, video game sales led by Halo 3, Xbox Live revenues, and Xbox 360 accessory sales." (Sounds like EDD bossman Robbie Bach nailed it).
The 6.1 million Xbox 360 consoles and 4.82 million copies of Halo 3 sold in the first half of fiscal '08 sure helped, but so did "decreased Xbox 360 manufacturing costs" and "a decline in Xbox 360 platform marketing expenses" – it's costing less to build them and less to promote the brand. But they'll need to hold on far longer than one quarter to make their sojourn into the living rooms of America worthwhile; for the rest of fiscal '08 they "expect revenue to increase due to increased sales of Xbox 360 consoles and related games, accessories, and services." Yup, that sounds about right.
[Via GameDaily]
Reader Comments (134)
Posted: Jan 25th 2008 1:23AM VampireHunterZ said
Okay I guess the US make up most of the sales. Still can't catch Halo 3 ;p
Posted: Jan 25th 2008 1:28AM (Unverified) said
jaja... not yet... but it's just a matter of time... no doubt about it... same with Super Smash Bros... it will outsell Halo 3 too...
And SSBB will outsell GTA IV, at least the PS3 version, and will sell about the same as the 360 version.
Reply
And SSBB will outsell GTA IV, at least the PS3 version, and will sell about the same as the 360 version.
Posted: Jan 25th 2008 1:31AM (Unverified) said
An you have to remember that Halo 3 was released in september, and Mario Galaxy in December... three months of difference...
And Halo 3 was the most anticiped game of the year, with millions of pre-order, and beta test, and publicity, and more publicity.
Reply
And Halo 3 was the most anticiped game of the year, with millions of pre-order, and beta test, and publicity, and more publicity.
Posted: Jan 25th 2008 7:49AM (Unverified) said
"but it's just a matter of time... no doubt about it... "
we ll see, altho I REALLY doubt it
"same with Super Smash Bros... it will outsell Halo 3 too..."
well, if we were to follow the sales of the previous installments of teh franchise, then yah, SSBB will get to 8 mil, not SMG tho
"And SSBB will outsell GTA IV, at least the PS3 version, and will sell about the same as the 360 version."
Fernando, once again, the SSB franchise hasn't even achieved 10 mil in sales, and you are expecting it to magically sell more than 10 mil?
Actually, GTAVI is the most anticipated title, and like I said before, Rockstar will make news once again before release date, and "boom" the sales will skyrocket, if we go by how the sales have gone for previous installments, this game should sell between 16 to 17 mil.
GTA is aimed to a demographic that is about as big as the one aimed by SMG, but with the exception that GTA's tend to buy videogames, SMG's not as often
"An you have to remember that Halo 3 was released in september, and Mario Galaxy in December... three months of difference..."
Yes, but it still was the holiday season, not only that, but people were expecting this title to sell like hotcakes right away because believe me, it was hyped as much as Halo, during the holiday season, all of the ads I saw for teh Wii were featuring SMG....
If you are expecting SMG sales to boost, then the same can be said about Halo 3, to say otherwise is just naive Fernando.
"And Halo 3 was the most anticiped game of the year, with millions of pre-order, and beta test, and publicity, and more publicity."
The exact same can be said about SMG, well, with the exception of Game Fuel...
Reply
we ll see, altho I REALLY doubt it
"same with Super Smash Bros... it will outsell Halo 3 too..."
well, if we were to follow the sales of the previous installments of teh franchise, then yah, SSBB will get to 8 mil, not SMG tho
"And SSBB will outsell GTA IV, at least the PS3 version, and will sell about the same as the 360 version."
Fernando, once again, the SSB franchise hasn't even achieved 10 mil in sales, and you are expecting it to magically sell more than 10 mil?
Actually, GTAVI is the most anticipated title, and like I said before, Rockstar will make news once again before release date, and "boom" the sales will skyrocket, if we go by how the sales have gone for previous installments, this game should sell between 16 to 17 mil.
GTA is aimed to a demographic that is about as big as the one aimed by SMG, but with the exception that GTA's tend to buy videogames, SMG's not as often
"An you have to remember that Halo 3 was released in september, and Mario Galaxy in December... three months of difference..."
Yes, but it still was the holiday season, not only that, but people were expecting this title to sell like hotcakes right away because believe me, it was hyped as much as Halo, during the holiday season, all of the ads I saw for teh Wii were featuring SMG....
If you are expecting SMG sales to boost, then the same can be said about Halo 3, to say otherwise is just naive Fernando.
"And Halo 3 was the most anticiped game of the year, with millions of pre-order, and beta test, and publicity, and more publicity."
The exact same can be said about SMG, well, with the exception of Game Fuel...
Posted: Jan 25th 2008 1:39AM (Unverified) said
Only 6.5 billion to go and the BREAK EVEN. Wow, just wow. Microsoft can break even in only 6 more years if they make 1 billion a year in profit. What a business model. Sony and Nintedo should be ashamed of themselves.
Posted: Jan 25th 2008 1:56AM (Unverified) said
I thought they already turned a profit once back when Halo 2 came out:
http://www.joystiq.com/2005/01/29/xbox-turns-a-profit-the-end-is-near/
http://www.joystiq.com/2005/01/29/xbox-turns-a-profit-the-end-is-near/
Posted: Jan 25th 2008 2:05AM (Unverified) said
This is the 2nd consecutive quarter that the Microsoft division has turned a profit. This is not the 1st quarter that it has turned a profit.
Posted: Jan 25th 2008 7:09AM Korova Pamplona said
I read that too. Its not the first time - I am surprised how off Chris is about it, but it feels so good its like it is the first time.
Also, Chris, investments must be recouped. So xbox is still very much in the hole on lifetime basis (accounting-wise).
There are many factors though that affect the overall picture, like the fact that MS can write off xbox losses against other MS income and thus reduce its income taxes. There is marketing benefit to MS image from having a sexy division. Zune, I am sure is still a drag in the division.
I am glad xbox is making profits, not because I am on MS's dick, but because it shores up the platform's long-term stability, which for some reason reduces my anxiety and lets me enjoy the games more.
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Also, Chris, investments must be recouped. So xbox is still very much in the hole on lifetime basis (accounting-wise).
There are many factors though that affect the overall picture, like the fact that MS can write off xbox losses against other MS income and thus reduce its income taxes. There is marketing benefit to MS image from having a sexy division. Zune, I am sure is still a drag in the division.
I am glad xbox is making profits, not because I am on MS's dick, but because it shores up the platform's long-term stability, which for some reason reduces my anxiety and lets me enjoy the games more.
Posted: Jan 25th 2008 2:08AM MaulerX said
Hey Joystiq, this is actually the SECOND CONSECUTIVE quarter M$'s Game and Entertainment Division turns a profit.
Our economy is so effing bad right now it's
good to see an American Co. do good in this business, rather than have all our dollars
go to Japan (as it usually was).
Our economy is so effing bad right now it's
good to see an American Co. do good in this business, rather than have all our dollars
go to Japan (as it usually was).
Posted: Jan 25th 2008 2:16AM (Unverified) said
Completly off topic but you have GOT TO SEE THIS.
Ladies and Gentlemen...without further delay Lucas Arts gives you TRUE next(now) gen gameplay.
Frack I just soiled myself.
http://www.n4g.com/NewsCom-103842.aspx
Ladies and Gentlemen...without further delay Lucas Arts gives you TRUE next(now) gen gameplay.
Frack I just soiled myself.
http://www.n4g.com/NewsCom-103842.aspx
Posted: Jan 25th 2008 8:40AM (Unverified) said
@ Whatever your name is
Damn finally a good post outta you lol jk, anyway man this looks so fricken sweet and I cant wait to get my hands on "The Force" =) Day 1 purchase FTW!!
Xbox360 version of course =)
Reply
Damn finally a good post outta you lol jk, anyway man this looks so fricken sweet and I cant wait to get my hands on "The Force" =) Day 1 purchase FTW!!
Xbox360 version of course =)
Posted: Jan 25th 2008 2:20AM ThornedVenom said
GG Microsoft. Even though I don't always agree with your ethics, you've created an overall beneficial impact on the industry.
Online console playing, voice support, achievements and DLC FTW.
Online console playing, voice support, achievements and DLC FTW.
Posted: Jan 25th 2008 2:38AM (Unverified) said
Excellent news that MS has made a profit on the 360, hopefully this trend continues, and hopefully Sony's PS3 goes down the pan (that'll teach Sony not to screw with Europe again and release the console here nearly 4 months after the rest of the world). I bought my 360 at Christmas 06 as I couldn't be bothered waiting for Sony to mess all Europeans around till April, and considering the exclusive games on the 360 like Mass Effect and Halo3 I think I made a superb choice, added to the extended warranty that MS has just added with the "red ring of death" syndrome. I've found MS customer service to be one of the best, whenever there is a problem they work there hardest to fix it (like with the PSU problem on the first one, I bought my original X-Box pre-owned with the faulty cable and they still replaced it free of charge!), this is very different to how Sony deal with a problem - the first Playstation's had an issue with the ball bearings on the CD drive wearing out - Sony's answer - deny it was a problem, correct the problem and re-sell loads of fixed PS1's to the end consumer.
As for disc scratching with the 360's there is a solution to this - put the 360 flat not vertical - disc drives were never designed to work properly on their side unless the disc is restrained to stop it wobbling (my Plextor DVD-RW has clips for this, but I still wouldn't use it on it's side).
As for disc scratching with the 360's there is a solution to this - put the 360 flat not vertical - disc drives were never designed to work properly on their side unless the disc is restrained to stop it wobbling (my Plextor DVD-RW has clips for this, but I still wouldn't use it on it's side).
Posted: Jan 25th 2008 3:31AM (Unverified) said
Erm none of the Playstions had failure rates over 40%, and never shipped 11 milion faulty consoles.
Even if you say that there were 1 million faulty PS2's, with 120 million units shipped, that's a less than 1% failure rate, compared to Microsoft's 40% and rising (and yes it's rising, as there are still 7 million of those faulty 11 million waiting to fail, and WILL fail..)
Reply
Even if you say that there were 1 million faulty PS2's, with 120 million units shipped, that's a less than 1% failure rate, compared to Microsoft's 40% and rising (and yes it's rising, as there are still 7 million of those faulty 11 million waiting to fail, and WILL fail..)
Posted: Jan 25th 2008 3:25AM (Unverified) said
I fail to see your logic. This is the first time EVER that Xbox has made any money. Playstation, PS2, PSP all make lots of money for Sony. The PS3 will also eventually make lots of money for Sony.
Put simply, so even an idiot like yourself can understand. The Playstation brand IS, and always will be more profitable that the XBox brand.
Put simply, so even an idiot like yourself can understand. The Playstation brand IS, and always will be more profitable that the XBox brand.
Posted: Jan 25th 2008 7:31AM Brucie B said
Best Console on the Block, Should be Making some Doe!
Posted: Jan 25th 2008 8:29AM (Unverified) said
haha, your assumption at my intellect is quite wrong. I('ve just always wanted to start an argument on the internet, and that was another failed attempt of mine.
Posted: Jan 25th 2008 8:57AM (Unverified) said
2009 and beyond are going to be tough for the Xbox 360.
Microsoft's opportunity to knock Sony out has passed and they failed (thanks, in part, to the Wii). The PS3 will match or surpass the Xbox 360 in every way by the end of 2008. There will be little reason (if any) to buy an Xbox 360 over a PS3. Also, Xbox 360 owners are more likely to buy PS3s than PS3 owners are to buy 360s.
Microsoft's opportunity to knock Sony out has passed and they failed (thanks, in part, to the Wii). The PS3 will match or surpass the Xbox 360 in every way by the end of 2008. There will be little reason (if any) to buy an Xbox 360 over a PS3. Also, Xbox 360 owners are more likely to buy PS3s than PS3 owners are to buy 360s.
Posted: Jan 25th 2008 9:30AM (Unverified) said
Wow, you are just so wrong on that opinion of your there =) You have to understand that right now there is no need to buy a PS3. AT ALL! I have one and it dousnt get nearly as much play as my 360. Its just a way better overall experience on the 360. Sorry buddy your comment = FAIL
Also your avatar...I see what your trying to do there but alas = FAIL
Good day sir!
Reply
Also your avatar...I see what your trying to do there but alas = FAIL
Good day sir!
Posted: Jan 25th 2008 9:37AM (Unverified) said
Well the PS3 is doing well all factors involved, but Sony needs to get on the ball this year if they want their 7 million or so console deficit to catch up to the 360.
it wont be easy, but if they stay on their game this year and come out with some big titles they can at least make ground on 360, especially if they boost their european and japanese sales a bit, as those are territories that the PS3 is currently on fire at the moment.
america could go either way, but Sony can at least make headway this year and try to get their WW numbers to match MS.
So far i think their doing a good job overall, not great but good. I mean 9.5mil systems in a year opposed to 16.5 and 20 for 360/Wii respectively aint bad considering it had competition its first year and the 360 didnt.
(Fyi i know its hit or miss but i'm basing my numbers on Vgchartz of course)
Reply
it wont be easy, but if they stay on their game this year and come out with some big titles they can at least make ground on 360, especially if they boost their european and japanese sales a bit, as those are territories that the PS3 is currently on fire at the moment.
america could go either way, but Sony can at least make headway this year and try to get their WW numbers to match MS.
So far i think their doing a good job overall, not great but good. I mean 9.5mil systems in a year opposed to 16.5 and 20 for 360/Wii respectively aint bad considering it had competition its first year and the 360 didnt.
(Fyi i know its hit or miss but i'm basing my numbers on Vgchartz of course)
Posted: Jan 25th 2008 12:10PM Korova Pamplona said
Two words (and one number and one achronim):
GTA IV exclusive episodes.
This will make people chose 360 over PS3 as a GTA platform = 360 FTW.
Reply
GTA IV exclusive episodes.
This will make people chose 360 over PS3 as a GTA platform = 360 FTW.
Posted: Jan 25th 2008 12:57PM (Unverified) said
@Korova
The PS3 is getting Rockstar's new franchise exclusively.
"New Rockstar Games Franchise Exclusive to the PS3"
http://blog.us.playstation.com/2007/07/27/new-rockstar-games-franchise-exclusive-to-the-ps3/
Reply
The PS3 is getting Rockstar's new franchise exclusively.
"New Rockstar Games Franchise Exclusive to the PS3"
http://blog.us.playstation.com/2007/07/27/new-rockstar-games-franchise-exclusive-to-the-ps3/
Posted: Jan 25th 2008 1:12PM (Unverified) said
Dont forget Korv, you also have to PAY an undetermined amount for those episodes and as much as i like GTA i'm not about to pay 1200+ pts for content no matter how big it is, especially if it drops 6 months later when i'm probably moved on to another game
Reply
Posted: Jan 25th 2008 9:41AM SoCoolCurt said
and now Microsoft is one step closer to achieving their goal of world domination.
i could have sworn that this had happened when Halo 3 came out but i guess i was wrong. oh well, im not a complete hater and i give credit where it's due, so congrats to the Xbox.
i could have sworn that this had happened when Halo 3 came out but i guess i was wrong. oh well, im not a complete hater and i give credit where it's due, so congrats to the Xbox.
Posted: Jan 25th 2008 3:19PM (Unverified) said
6.1 million Xbox 360's right? Theres over 8 billion people in the world.
Posted: Jan 25th 2008 3:19PM (Unverified) said
I prefer to stick to my PC, where the only things i have to pay for to play online is the games price, and my internet connection.
Posted: Jan 25th 2008 3:57PM lebeau said
I had to send my WII back (no lie), for a spinning disc error, but man did I get it back fast. I've had to send my 360 in 2 or 3 times and the turn around time was just a little bit longer. I just say that to say we are all screwed by electronics sooner or later. Heck my ps3 won't even update motostorm it just freezes. What does this have to do with anything, I don't know, but these flamewars are so tiresome. I love all my systems and hope they all stay in the black.
Posted: Jan 25th 2008 4:14PM thund3rstruck said
"The Playstation brand IS, and always will be more profitable that the XBox brand."
I fail to see your logic. Clearly the Playstation brand is more profitable than the XBOX brand due to it's considerable lifetime. What logic are you using to determine that the Playstation brand will "always" be more profitable than the XBOX brand once they're life-cycles are comparable in duration?
I fail to see your logic. Clearly the Playstation brand is more profitable than the XBOX brand due to it's considerable lifetime. What logic are you using to determine that the Playstation brand will "always" be more profitable than the XBOX brand once they're life-cycles are comparable in duration?
Posted: Jan 25th 2008 5:24PM Mr Khan said
Looks to me like this Q4 was made to shake the ages. Xbox Division turns a profit and Wii gets an 8.1 Tie Ratio
Radical, this really speaks towards a turnaround in the long-term viability of Microsoft's strategy regarding the Xbox
Radical, this really speaks towards a turnaround in the long-term viability of Microsoft's strategy regarding the Xbox
Posted: Jan 26th 2008 9:39PM (Unverified) said
Maybe it's just me, but I think some of these people who are getting 5+ RRODs are doing something to make it happen. I've still got a launch console. I keep it in a well ventilated area laying flat. No problems. Hint: If you stick your 360 on top of your cable box and under you dvd player, it's probably going to overheat.
Posted: Jan 27th 2008 5:31PM zackbenimble said
Good for them!
Posted: Apr 15th 2008 9:27AM (Unverified) said
I think that some one should SUE their A***! we need to be a group of people and do that!
why do I have to buy all kind of self fixing guides like this http://www.xbox360-3redlightsfix.com etc. in order to do that my self?
they should fix it for free!
why do I have to buy all kind of self fixing guides like this http://www.xbox360-3redlightsfix.com etc. in order to do that my self?
they should fix it for free!
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