Xbox division posts $165 million profit in fiscal Q3 on strength of Xbox Live business

My question, for those railing on live and it's "outrageous" $5/month cost, is this: have you used it?

I have all 3 current gen systems, and I can honestly say that PSN feels like its still in beta compared to xbox live--likely because live got like a 5 year head start (several years on the original xbox, then a few more before PSN was fully implemented on the ps3). Live is set up in such a way that almost everyone has a headset; you're lucky if you can find players with headsets on PSN. Forget talking to someone playing another game, or inviting someone playing something single player to play a different game multi with you. It's a good service; you get alot of bang for your buck.

And honestly, what is the deal with people on the internet and paying for things? For goodness sake, its five friggin dollars a month! I spend more than that going to burger king by myself *once*. Heaven forbid MS charge for their bandwidth (even though they don't have dedicated servers, they must still use a fortune's worth of bandwidth on matching, chat, and other features). And making money? What are we, capitalists?!?

GROW UP INTERNET!

To be fair, it's pretty easy to skip past the ads. Just hit up once on the joystick and boom, gone.

That is up to developers. EA games tend to use more dedicated servers. Downside is dedicated doesn't automatically equals good: BFBC2 at launch come to mind :(

Which is exactly why I don't have XBL.

Good for you, Mr. Vanillla.

Good for you.

Yeah, my launch unit RROD recently, but I did get nearly 5 years out of it. It was a beast I tell you... many hours of great entertainment.

Why the downvotes? It's true. Ever since they've merged the Zune under the same banner, they've been turning a modest profit. Coincidence? I think not.

You honestly think Zune would be at all responsible for the success? Really??

http://www.microsoft.com/msft/IC/segments_edd.aspx

Look, Microsoft tells you straight how many devices are in that division.

Zune profits are apparently "way down" -- http://www.tomsguide.com/us/Zune-Microsoft-Earnings,news-3355.html

It's probably more important though to note that the division also includes PC games and you're probably right -- while the sales are down, the inclusion of Zune in the division probably does help them.

@Greg

Shareholders haven't been happy with Ballmer for a while, because of the company's low stock price. Look at what MSFT is trading at right now; it's actually DOWN after they announced their results yesterday. A lot of that discontent has been pointed at the Xbox, as it's been a huge money pit. What, five billion in losses on the original Xbox, billions lost on the 360, ever increasing repair costs, and slumping sales, do you think Microsoft wouldn't try to mask losses by putting it with other, more profitable products?

I don't have to. We already know MS is still losing money hand over fist in regards to repair costs. One billion dollars in two years fixing consoles is enough to drag any product down.

Except for the fact that MS set aside a fund for Xbox 360 repairs what, 2 years ago? 3 years?

Also the fact that most of the older units that were prone to RRoD are out of the 3 year warranty and now have to be paid to fix.

Honestly Bradwart, you seem to live on the Internet by how much you post, you could at least TRY to post things from a factual/logical point of view. Youve been banned how many times for trolling already?

Learn your lesson and give it a rest dude. Seriously.

Well, if the fund did run out then the fact they turned a profit means that the repair costs are being more than covered by the revenue.

The find was over $1 billion in size. (http://blogs.barrons.com/techtraderdaily/2007/07/05/microsoft-xbox-360-repairs-too-high-extends-warranty-sets-105-115-billion-pre-tax-charge/) Even assuming that it costs $100 for MS to repair a box (which I doubt) thats still enough for over 10 million repairs. Which again I doubt is how many they have considering they are at 40 million shipped.

Plus MS is now charging people for the older repairs.

And if you knew anything about anything about computer hardware you would know that yes, by and large the RRoD IS resolved. Is it 100% gone? no, it never will. Take the coolest, best running computer out there, wrap it in moist towels and let it run for a month and I bet you it will break too.

While I do not doubt that stopping the coffin shipping is saving MS money, to be honest is more convient for the end user overall. Paying my local packaging store for a box, packing material, and to have them back it for me cost me a grand total of $3.52 if I recall correctly, and shaved about 3 days off of my total processing time.

See how wonderful it is to do research and not be a mindless troll? Your the worst kind Bradwart. You troll EVERYONE. Youll slam xbox in an xbox article, then hop over to the next PS3 article and shove Halo down their throats. Add in the fact that you post like 45 times a day, and theres a reason you are the most well known and widely hated person on this blog right now.

No, the costs are being swallowed by their other more profitable products, like Windows Mobile.

Maybe.... you have a breakdown somewhere? Regardless, the division isn't drowning due to repair costs.

Again, R, I documented evidence below.

Stop drinking the MS Koolaid. They've got a serious design flaw and it's costing them money. That's a fact.

Thats your source? A single vaguely worded quote from a magazine saying that they are hearing rumors that its the same? Hey, watch me, I can do 10 seconds of research proving my side correct as well.

On August 28, 2009, SquareTrade published a report saying that "early indications point to the problem abating in 2009", projecting that 1-year failure rates with the Jasper chipsets might be below 4%

Wow, look at that.

There are others who have hinted at it.

Really, all I did was say I doubted the Xbox was profitable and all you people exploded with "ZOMG TEH WRONG!"

I. Don't. Think. It's. Profitable.

Is that clear enough for you?

You didnt say "you think" you said "you know", the same way I might say that I know that 2+2=4.

Never once did you clarify your statements with "I think" " I believe" "probably" or any of the sort. No, the mighty Bradwart is gifted with divine knowledge that the rest of us mere mortals cannot comprehend.

But now that it seems your high horse got tired and went to eat some hay, I suppose I shall rest too and go buy my dad his stupid wedding shower gift.

Profitable overall? Very doubtful. Profitable this quarter? Very likely.

R, you're also assuming that each console only needs one repair. That's the exception.

MS has three types of 'repairs'. Repair the existing board(and add the new heatsinks), replace it with an Opus motherboard, or replace the console. That last one likely costs more than $100, and the second option can't be too cheap either, as they generally replace the DVD and other internals.

That could EASILY break the bank.

Apparently, so am I.

From Game Informer issue 196:

Red Rings In The Financial Red

Microsoft's problems with the RRoD are well documented. The company went public with its woes in 2008, saying that it was setting aside $1 billion to deal with the situation. While the company's efforts are sincere, and $1 billion is a heavy hit to take, we're hearing that so far the problem has exceeded the 1 billion mark and is showing no signs of slowing.

All I wanted to say is can we all stop arguing about which console is better?

Well I think thats a gr-BAHAHAHAHAHAHAAAAAAA

johnnynumber5 saying this? HAH!

Ok but seriously, hering that from you would be like having Benedict Arnold saying "Cant we all stop betraying each other?"

You were trolling Xbox articles as early as yesterday. Offer a hand of peace with a pistol behind your back, I suppose.

but....but... but this is Joystiq and they want us to fight amongst ourselves for ad revenue. How can we not fight when the flamebait is laid before us on a golden platter and we are told that only one can have it? HOW???

@R

When was I trolling anything 360 related yesterday? I haven't been commenting that much and when I have I've went out of my way not to troll. Again, it's been 4-5 years now and we should all stop arguing which console is better, it's old and tired. Please point out my supposed trolling. Are you talking about when I said I was unimpressed with the live feed of DR2 in a L4D article? If so, that's a huge reach and I even prefaced it by saying "unrelated". It's not like I was trolling MS, L4D, the 360 or anything else for that matter. The feed looked bad and I brought it up. I genuinely wasn't trolling the first DR, it just looks dated by today's standard. Most of comments are on the MMA site and I've been saying it's old to argue about which console is better for a minute now. I guess my reputation preceeds me but I genuinely feel that way.

All you have to do is look at the numbers.

This is from their investor call yesterday (which is on Engadget)

"1.5 million consoles sold, software attach rate 8.8%, first party software revenue declined prior to Halo Wars. Substantially upset by Xbox LIVE membership."

Even Joystiq says the console sales have declined. Add in Microsoft's lackluster first party lineup for 2009, and it's unlikely they made much of a profit, if it all.

Yeah, but in the link you gave earlier all the key indicators they give for that division had to do with the 360 and Live.

Also, in that quote, when they say "substantially upset" I'm pretty sure they are saying that the fees collected from Live vastly outweigh the lose reduction in software revenue. In fact, I'm guessing that is a misquote and they actually said "offset", not "upset".