Microsoft claims 42% of 'next-gen' revenue
by Scott Jon Siegel 
{ Mar 10th 2008 at 4:45PM }
The announcement comes at the same time as the price-drop for the 360 SKUs in Europe, which VP Chris Lewis feels was only possible after securing a sizable hold on the market. The market revenue figures are based on sales of consoles, games, peripherals, and online services like Xbox Live, and only figure in the current generation of video games (the continued strong sales of PS2 software, for example, are not included). Worldwide, Microsoft also claims an installed user base of 17.7 million, though no word if that number accounts for red-ringed consoles.
Reader Comments (Page 1 of 2)
Nigeria @ Mar 10th 2008 4:49PM
There's no war. Please stop using that word to describe consumerisation.
Marty @ Mar 10th 2008 5:32PM
Fully agree... The word has been thrown around too much lately - I got the feeling that HD-DVD and Blu-Ray were digging trenches during the last "war."
WhoMe @ Mar 10th 2008 7:07PM
It is a war in their eyes.
Anyway, you gotta admit, the spin is pretty big on this one. I mean they have to skew their numbers so hard it's not funny anymore. They talk about "revenue" and don't consider the PS2 for instance.
Dunno, already people are saying the 360's past its prime. It'll be interesting to see where we are within a year, or even half a year.
And beyond that? I'm curious to see whether MS will drop the 360 like a brick as they did with the original xbox. Thanks for that btw Microsoft!
Marty @ Mar 11th 2008 2:31PM
Why would they compare PS2 to claim 42% of "next-gen" revenue?
The only people who say 360 is past it's prime are either trying to justify a purchase of a competing console, or are just a fanboy of another.
Vol @ Mar 10th 2008 4:49PM
Continuing...
and 100% of the next-gen console failures. :-)
Let the flaming begin.
Night Elve @ Mar 10th 2008 5:03PM
+1 For you Sir!
Vol @ Mar 10th 2008 5:25PM
I don't know why Joystiq hasn't posted about this site yet:
http://www.xboxdrm.com
It's a petition to get DRM changed on the 360.
Marty @ Mar 10th 2008 5:33PM
What does that have to do with the article?
PojoMofo @ Mar 10th 2008 5:42PM
When you charge $100 for a wifi adaptor, $100 for a 20GB HDD, $180 for a 120GB HDD, and $15 for 6 year old xbox1 games, Im suprised the percentage isnt higher.
Remember.....revenue does not equal profit
Boostjunkie @ Mar 10th 2008 6:04PM
PojoMofo,
Huh??? You just said M$ is overcharging for tons of accessories, and then said revenue does not equal profit. I assume these accessories are bringing in huge profit. That's where the money is made, not on the console themselves.
aaron_k7 @ Mar 10th 2008 4:52PM
To borrow from Soul Calibur IV, it would seem that Yoda is kicking Vader's ass, according to Yoda that is. Quite the flame bait article I should say.
Chase @ Mar 10th 2008 4:54PM
The other 58-percent? Nintendo Wiis.
Didn't there used to be another company in the console war? Philips, was it? No, no wait, I think it was Tiger. Yes, that's it: a combined effort from Tiger Electronics and Panasonic. The PlaySexy 3DO.
rv @ Mar 10th 2008 5:26PM
sorry , but fail...
vidGuy @ Mar 10th 2008 4:54PM
I say gamers are winning this war. Seriously, these three systems seem stronger, more interesting, and more fun than any generation I can remember. I don't care who wins; I do care that I'm having a crapton of fun here.
Marty @ Mar 10th 2008 5:34PM
On an aside, I cannot wait until people stop this "fail" business.
Nick the Hero of Canton @ Mar 10th 2008 5:58PM
Saying fail fails.
I fail.
Yeah, rate me down please
A @ Mar 10th 2008 6:14PM
yeah- but my 360 just failed. made a munching sound and now the drive wont close. and i'm just out of the 1 yr warrantee (3 years for rrod only, yes?). The games are fun, but the hardware is a serious case of fail. no news there though.
Freelance @ Mar 10th 2008 7:10PM
Dude, what!? This is the worst gen I have seen. Yeah there some great games but there so much stuff wrong. I could pick 3 major flaws in each console that didn't exist last gen and I own all 3. This has to be the most patch heavy, battery consuming, pocket draining, short campaign having, bad port making, big game delaying, buggy console producing generation yet! And thats not picking on individual console flaws.
rv @ Mar 10th 2008 7:51PM
That was supposed to be a reply to the guy above this one...
ThornedVenom (Harley Quinn Defense Force) @ Mar 10th 2008 8:52PM
IBM was certainly the clear winner.
vidGuy @ Mar 10th 2008 10:32PM
@Freelance, you got a point man. Each console has a serious weakness. But the way I see it, each system's strengths are higher than the previous systems. 360's online system is way better than XBOX, the PS3 has a ton of power (PS2 was lagging in the technology), and the Wii has market appeal like no Nintendo system since the fracking NES.
I think about it this way. The NES ruled the roost, you were either a SNES or Genesis fanboy, you were either a PlayStation or N64 fanboy, and the majority of gamers didn't have all three consoles last gen. Looking at the cons, Gamecube had epic fail in anything but Nintendo games, the XBOX had the mammoth controller and questionable support earlier on, and PS2 was your DVD player and shovelware specialist. Plenty of strengths all around, but nothing that made each console a must buy.
This generation, it seems like there's a reason to own every console, even early on. That must come from how different they are from each other now. But it just seems like there is something for everyone now.
Youthinized @ Mar 10th 2008 4:56PM
Competition brings out the best in everybody.
Thats why Madden is doing so great!
/sarcasm
why not the LS2/LS7? @ Mar 10th 2008 4:57PM
Not surprising, given MS' aggressive strategy of monetizing (i.e. nickle and diming) their customers for peripherals, icon packs and Live fees.
I would think even many of those who feel that MS is blazing the trail for online interaction also note that it is a rather spendy one for the consumer much of the time.
Oh, and don't forget... if you want to use HDMI, but optical audio, you need to buy an accessory... It's a very lucrative model.
deaftly @ Mar 10th 2008 5:02PM
All you need is a screwdriver.
http://www.chadledford.com/?p=50
Scotto @ Mar 10th 2008 5:08PM
Clearly consumers have liked the modular structure of the XBOX 360 so far. The PS3, on the other hand, included Blu-Ray, WiFi, etc. out of the box on all models, and had to sell their console for a significant amount more on launch. That, of course, resulted in lukewarm sales, and a lot of very quick price cuts shortly after launch.
Allowing XBOX users to "nickel and dime" themselves, by letting them choose which XBOX accesories they do and do not want, can also be seen as a positive.
- Scott
naxe @ Mar 10th 2008 4:58PM
My A$$ 42%
Yea HI! M$
Have you had the pleasure of meeting Nintendo's golden boy..... the Wii??
yea let's stop talking out of our A$$'s and keep the games coming. i personally dont care about this so called WAR. i buy what i want and play what i want.
Ryan @ Mar 11th 2008 1:39AM
While I don't claim to be an expert on this kind of stuff by any means, even the most casual joystiq reader should understand by now that the majority of money in the videogame market comes from software.
The Wii has sold a ton of consoles, but their software sales are waaaaaaayyyyyyyy behind where the 360's are, so it makes sense that they will have made less money overall even if they've made more on the hardware.
Of course, the 1 year headstart didn't hurt either.
Marty @ Mar 10th 2008 5:36PM
They sell the games for $20 more, they've got a year's head start, and they've got a lot more software (and *good* software) on the market.
naxe @ Mar 10th 2008 6:00PM
ill hardly call a library full of FPS as *good* ware. i know this doesnt mean anything. and my opinion doesnt really matter to anyone other then myself. and i should probably keep this comment to myself but what the H.
the wii is for kids/old people. get it grandma.
the ps3 is for rich movie buffs who like the most expensive but not always (best) form of entertainment.
countless set back's and game delay's its anyones guess as to why sony didnt just shoot the dying giant at the first sign of a problem.and start from scratch but w.e its here deal with it.
Dont like Dont buy.
moving right along
and the xbox is for the "hardcore" crowd. cuz everyone knows drinking the DEW staying up all nite talking to your "friends" and 12 year olds while eating taco bell at 4a.m is soooo "hardcore". major sarcasm there.
Look they all have their weakness and they all have their GO TO feature's. JUST POP THE CLUTCH and start playing. quit whinning about who's better. its dumb already. seriously its as old as saying FIRST.
aaron_k7 @ Mar 10th 2008 6:22PM
I also have trouble referring to the Wii as a 'next-gen' console. Yes, it's cool; yes, it sells a lot of consoles. But, really...next-gen? I think it's more like a 'current-gen' console that has innovative controls. It has also been aptly stated in this thread that the software offerings for the 360 far surpass those of the Wii.
Mr. Cantu @ Mar 10th 2008 6:25PM
Hey naxe, I guess you missed that pie chart that showed only about 11% of 360 games are in the FPS genre. It's an Aug figure but I don't it's really changed since then: http://fpssource.net/2007/08/08/17-of-all-xbox-360-titles-are-fpstps/
Mr Khan @ Mar 10th 2008 7:47PM
You're right. Wii is not next-gen
Neither is PS3 or Xbox 360. This is the 7th generation, they are all 7th generation consoles, that is the current gen. Next gen is 8th gen.
NATO_Duke @ Mar 10th 2008 4:59PM
MS only said this to spark a fanboy flame war at Joystiq. Just ignore it, don't give them what they want.
Sometimes we have to treat them like a poorly behaved child.
So, how bout those saltine crakers....those are tasty eh?
Scotto @ Mar 10th 2008 5:08PM
I would say that 42% figure might not be far off the mark, considering the XBOX 360's crazy software tie-in ratio of something like 6:1 or 7:1.
I know I personally own 36 games for my XBOX. Consequently, I own 4 for my Wii, and 3 for my PS3.
That isn't including XBLA, PSN, or Virtual Console, mind you.
- Scott
BigD145 @ Mar 10th 2008 5:00PM
It 'might' be that high mainly because of Live. They are probably adding in all those regular old Xbox Live accounts to the mix.
deaftly @ Mar 10th 2008 5:00PM
This is gonna get ugly.
/popcorn
Martez @ Mar 10th 2008 5:03PM
And despite having 42% of next gen revenue, Microsoft's Gaming division continues to hemorrhage money.
Korova @ Mar 11th 2008 3:41PM
That's because 10% of those 42% is MS' payments for rrod repairs.
ZING
SoulBlade @ Mar 10th 2008 5:06PM
I'd hope so after having a year head start.
Zeus.:God @ Mar 10th 2008 5:20PM
That year head start is over. Fanboys need to get over that. All the consoles are out, and even then the 360 is still winning no matter how you look at it.
SoulBlade @ Mar 10th 2008 5:25PM
id like to see them break down the revenue for the past year vs. the total next gen. Bet the number's lower.
Also, why do you think they omit certain details? You're one of those individuals who really falls for the marketing spin. Well done.
Myke @ Mar 10th 2008 5:31PM
@ Zeus.:God
Soulblade is right. With the year head start, M$ better be "winning" but they are NOT. The Wii is unstopable currently and will continue to kick ass until Holiday 08. The Xbox 360 of course is losing its lead. In JP its NOTHING and in PAL its going down. The "price cut" is not gonna do anything. The PS3 on the other hand, has a great year in front it and wit Blu-Ray winning, Sony can put all of their attention on software if they haven't already. M$ has America but thats not enough. With hardware failures still going on, its still gonna be tough for them when the KEY titles drop for PS3. Its inevitable..
But more important, i'ma gamer. I cant wait for this year anywayz regardless of what system. GAME ON!
SoulBlade @ Mar 10th 2008 5:32PM
And you can look at it in a number of ways where MS loses.
Revenue != profit. They're losin the profit one for sure. Businesses only care about profit... wonder why MS has to use the word revenue.
Worldwide sales, Wii's sellin faster than the 360. How can you spin that one?
Zeus.:God @ Mar 10th 2008 8:30PM
Why does Microsoft use the term revenue? Because 42% of the profit wouldn't make sense considering that the profit is dependent on other aspects of sales- revenue shows that they are moving more money, as profits wouldn't necessarily be made.
By the way, I wouldn't doubt that they're making profit off this.
Maverick Saturn @ Mar 10th 2008 5:25PM
No matter who wins, we loose, took that from AVP, but its true :)
While we the dopey consumers spend, all three companies get cash, so squabble all you want, the three big dogs like when you squabble, it makes them more money ^^
God, I'd love to be in one of thier shoes raking in the cash and watching consumers squirm over which console is the best. lol
Ryan @ Mar 10th 2008 5:30PM
I have $hit-tons of fun playing the games of this generation. Much more fun than I could have by spending that same amount of money on anything else. So, how exactly am I losing in this scenario? Because someone else gets rich by providing goods and services that I enjoy and get more than my money's worth out of?
Sounds to me like everybody wins. Sounds to me like capitalism...
Maverick Saturn @ Mar 10th 2008 5:57PM
Maybe so, but the game companies are thanking you for spending your cash on them :) In fact why stop there, go ahead, buy more, you know you want to.
Its like the seductive charms of a female that you can't less pass, lol, except she doesn't want you for you, she wants your cash ;)
Vegeta (aka Ska Oreo) @ Mar 10th 2008 11:51PM
@Ryan
NO MAN. THAT'S WHAT THE MACHINES WANT YOU TO THINK!!!
FoxHoundADAM @ Mar 10th 2008 5:26PM
Wow 42% really? That's pretty impressive. Although given the extremely high attach rate for the 360 plus live service and the marketplace I can see the high margins there helping a lot.
GearsofWar @ Mar 10th 2008 5:57PM
"The announcement comes at the same time as the price-drop for the 360 SKUs in Europe, which VP Chris Lewis feels was only possible after securing a sizable hold on the market. "
Oh, the price drop is because they secured a sizable hold in Europe? Spin, Chris, Spin!