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xbox 1 hasn't been manufactured for ~12 months

D

Devistater

Diamond Member
I'm not sure what forum to put this, I guess this is the right one?

http://www.gamesradar.com/gb/xbox/game/...Id=20060613155351140014&sectionId=1006

MS stopped making new xbox 1's around July of last year.

As I've long suspected from looking at MS's quarterly financials from the division that handles the consoles, MS has admitted they lost money on every single xbox ever made. The quarter where halo 2 was released was one of the very few they ever made any profit for the quarter. I think if you total up all the losses for all the quarters they sold the xbox 1, they've lost billions.
I seem to recall that MS said a long time ago that xbox 1 was just to get into the market, and it was going to be the 2nd or 3rd gen machines they made that were going to be where they'd try to take over the market.

Any comments?


Edit: for those who want actual numbers and hard facts, heres the info from MS's 2005 annual report:
http://www.microsoft.com/msft/ar.mspx

Home and Entertainment includes the Microsoft Xbox video game console system, PC games, the Home Products Division (HPD), and TV platform products for the interactive television industry.
Click to expand...
Home and Entertainment (in millions)
2003 Operating loss $1,191
2004 Operating loss $1,220
2005 Operating loss $391

In the second quarter of fiscal year 2005, we introduced Halo 2, which generated over $300 million in revenue in the fiscal year...
Click to expand...

Home and Entertainment operating loss in fiscal year 2005 decreased primarily due to an increase in high margin Xbox software sales, lower Xbox console unit costs...
Click to expand...

So the H&E division includes PC game sales, I'm sure things like Age of Empires and Dungeon Siege MADE a significant profit for MS (else they would have never made sequels), so the losses for the xbox are actually higher than it appears.
Thier most popular game, Halo 2, made them $300 million (not profit), and thats barely a drop in the bucket compared to these losses.
So at minimum for those 3 years, they lost almost $3 billion dollars on xbox (after you include the xbox games)
 
Originally posted by: Devistater
it was going to be the 2nd or 3rd gen machines they made that were going to be where they'd try to take over the market.
Click to expand...

That about explains it for me... whether or not it works, we'll see - all the kids hate microsoft and love Sony/Nintendo >.>

 
Originally posted by: dethman
they made money on games.
Click to expand...

Yeah, but not much profit. Check the quartery financials from that division. They lost money almost every quarter.

Profit is what counts, not how much money you take in.
 
PS3 isn't looking so great right now even at $500 xBox will be $349 or $299. Rumors of games at $70 isn't hot either. Xbox live is a great service. Microsoft looks set for 2nd gen

<- ps2 fanboy and will buy PS3 after it's under $300.
 
Originally posted by: Devistater
I threw in some hard numbers in OP from an MS annual report. Minimum $3 billion lost in 3 years.

Originally posted by: Whitecloak
loss leader.
Click to expand...
$3 billion is pretty big loss leader 🙂
Click to expand...

It is if your cash pile is over $40 Billion 😛
 
You lose money on the consoles.

You make money on $30 controllers, cables, microphones and monthly online subscriptions.

You are in the black with game sales.

You gain a strong customer base with lower prices.

You weaken the competition. XBox has more or less caused Sony to f' themselves over this time around. In an effort to out do Microsoft, they put a hefty price tag on a console with features that are unnecessarry.
 
Originally posted by: Finality
Originally posted by: Devistater
I threw in some hard numbers in OP from an MS annual report. Minimum $3 billion lost in 3 years.

Originally posted by: Whitecloak
loss leader.
Click to expand...
$3 billion is pretty big loss leader 🙂
Click to expand...

It is if your cash pile is over $40 Billion 😛
Click to expand...

yup, sonys the other way around. their games division makes money sure, but the rest of sony bleeds money.
 
Nickels and dimes for MS, and overall I think their strategy to get into the market has been excellent. 5 years ago they weren't even in the market, now they have over 40% market share. Not too bad.

What's 3 billion for M$?
 
Originally posted by: Skold
Prolly doesn't include royalties and licensing profits from 3rd party developers, etc.
Click to expand...

where else would that money be in the annual report?
 
Originally posted by: junkerman123
Nickels and dimes for MS, and overall I think their strategy to get into the market has been excellent. 5 years ago they weren't even in the market, now they have over 40% market share. Not too bad.

What's 3 billion for M$?
Click to expand...
yup. i think the real success lies in how much of the market they've captured since their inception. they may not be extremely profitable right now, but they're sure as heck setting themselves up to be in the future.


=|



 
Thes figures probably include all the licensing and etc so MS really is losing a lot of money on the xbox. Of course, everybody already knew that.

What's surprising is that the xbox 1 hasn't been manufactured in over a year yet is still being sold. It shows that MS has a really poorly managed manufacting arm. Keeping inventory around for such a long period of time is a huge money loser. Whoever's responsible for that should be fired.
 
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