Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
And no company in their right mind would ever make an announcement ahead of time that they're going to pull a product.
Also, no company in their right mind would pull a product when it starts to make money (finally).
Yeah, if that happens.
WHY WOULDN'T IT?!
This is what you have failed to explain. The warranty stuff was charged to last year. So how can Peter Moore leaving and whatever else you mentioned lead to a non-profitable FY08?
Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
Like I said, I'm anxious to see what September brings. If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
Like I said, I'm anxious to see what September brings. If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
You can't even do your terrible predictions and math correctly. There are 4 quarters in a year, hence quarters. Continuous profits of 80 million/quarter would take 15.5 (62/4) years to recoup $5 billion. And I don't know why you used $5 billion since you've been using 6 the entire time.
Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
And no company in their right mind would ever make an announcement ahead of time that they're going to pull a product.
Also, no company in their right mind would pull a product when it starts to make money (finally).
Yeah, if that happens.
WHY WOULDN'T IT?!
This is what you have failed to explain. The warranty stuff was charged to last year. So how can Peter Moore leaving and whatever else you mentioned lead to a non-profitable FY08?
Well their competitors have their consoles on the shelves now and development for these consoles is now in full swing. Not to mention the fact that the PC market is starting to look rather interesting.
Their track record shows that they aren't making money with their current product and are in fact losing money.
The last time they banked on a solid release they did earn profit for a period of 3 months that totaled 80 million only to fall short once again into the negative hundreds of millions.
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
This post contains far to much logic. Wrong thread.
Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
Like I said, I'm anxious to see what September brings. If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
You can't even do your terrible predictions and math correctly. There are 4 quarters in a year, hence quarters. Continuous profits of 80 million/quarter would take 15.5 (62/4) years to recoup $5 billion. And I don't know why you used $5 billion since you've been using 6 the entire time.
Well considering they've had 24 quarters since the inception of the division and only 80 mil to show for their efforts, I didn't want to give them that much credit.
Hell they were expecting to make profits on the Xbox 360 period.
Quote John Connors, Microsoft's chief financial officer:
"The real crossover though, in terms of profitability delta, is when we get to the next generation of the Xbox console. Where we are today in the life-cycle of that console, it’s very clear if you look at previous life-cycles for consoles, that as you get to the end, the pricing dynamic heads one direction, and that’s down. With the current cost of goods, which we have taken down fairly dramatically, there’s no way to make money on the console in this first generation. So the key is, how do we do in the hardware design and the chip-set design and the supply-chain design with Version 2. If we do as expected, we have a good crossover point where that big negative number is no longer a negative number, and because of the size of the revenue and the size of the percentage that is negative, when you have a crossover, that’s a good contribution in terms of bottom line."
Notice how that quote doesn't say "We expect to make money by July 2007" or anything close to that. There's still plenty of time for the 360 to make money.
Nor does the quote say that they would pull out of the market if the 360 didn't make money. That is corporate speak trying to assuage investors, not an insight into their long term strategy.
And no company in their right mind would ever make an announcement ahead of time that they're going to pull a product.
Also, no company in their right mind would pull a product when it starts to make money (finally).
Yeah, if that happens.
WHY WOULDN'T IT?!
This is what you have failed to explain. The warranty stuff was charged to last year. So how can Peter Moore leaving and whatever else you mentioned lead to a non-profitable FY08?
Well their competitors have their consoles on the shelves now and development for these consoles is now in full swing. Not to mention the fact that the PC market is starting to look rather interesting.
Their track record shows that they aren't making money with their current product and are in fact losing money.
The last time they banked on a solid release they did earn profit for a period of 3 months that totaled 80 million only to fall short once again into the negative hundreds of millions.
The PC market is fucking dead. A midrange graphics card is now $300. Game companies are designing for the 360 first and porting to the PC as an afterthought. Last gen it was the other way around. High-ranking people at Bethesda and Epic have been quoted as saying that the PC gaming market isn't sufficient to sustain any sort of high-budget title by itself (although I expect Blizzard to be able to counter-prove that point).
And again, Microsoft has done this kind of loss-leader thing before. Their actual investors are used to it.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
So much stupidity in this thread. So much it hurts. Go to business school Meiz or shut the fuck up. Its starting to get annoying and shitting on a decent thread discussion with your complete inability to grasp the most basic of concepts.
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
It didn't turn a profit in 2007. So what? Happens in all kinds of businesses, for different reasons, all the time, and without context it doesn't mean much.
Is Microsoft in a good position to turn profits from the Xbox in the future? If you're saying they're not, why not? Track record isn't good enough. You have to explain why they lost money in the past and why they'll lose money in the same way again.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
You forgot the fact that almost all 3rd party titles are ditching the PS3 for a multi-platform approach. Hence, why buy the more expensive competition?
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Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
They might also be able to bank on the fact that tons of people are paying $50 for live every year for something that some people on this board think is free for Microsoft. Add the people who will buy a 360 and get live just for Halo 3 and you got a ton of (possibly) free money!
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
I thought the 360 launched in November 2005?
It hurts his point to realize that the 360 was only put out a little more than a year and a half ago.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
They might also be able to bank on the fact that tons of people are paying $50 for live every year for something that some people on this board think is free for Microsoft. Add the people who will buy a 360 and get live just for Halo 3 and you got a ton of (possibly) free money!
Not quite free, but I'm guessing that Microsoft keeps at least $45 out of that $50 per year.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
No, you're right. They are relying on Halo 3 and GTA IV to drive sales. I don't care how awesome Mass Effect and Assassin's Creed and all the rest look, those aren't the type of games that sell systems in large amounts. Halo 3 and GTA IV do fit into that category and it will be interesting to see just how many people were waiting for Halo 3 to buy the 360 versus those that bought the system already and are waiting for the game. Same with GTA IV.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
No, you're right. They are relying on Halo 3 and GTA IV to drive sales. I don't care how awesome Mass Effect and Assassin's Creed and all the rest look, those aren't the type of games that sell systems in large amounts. Halo 3 and GTA IV do fit into that category and it will be interesting to see just how many people were waiting for Halo 3 to buy the 360 versus those that bought the system already and are waiting for the game. Same with GTA IV.
I personally know 3 people who recently bought a 360 after seeing videos of Assassin's Creed and Mass Effect. Those games are going to be selling systems.
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
It didn't turn a profit in 2007. So what? Happens in all kinds of businesses, for different reasons, all the time, and without context it doesn't mean much.
Is Microsoft in a good position to turn profits from the Xbox in the future? If you're saying they're not, why not? Track record isn't good enough. You have to explain why they lost money in the past and why they'll lose money in the same way again.
Why would I have to explain why they lost money in the past? Lack of strong titles and their targeting of the mainstream perhaps? Failure to secure enough of the market before the competitors had a chance to catch up?
I don't know to be honest, nobody really mentionned the why. What I do know is I don't see them doing anything differently with their current business model. There hasn't been a change in respect to Live! pricing. Granted their lineup is a little stronger, perhaps that might turn the tide. Personally I think it's a little too late.
Don't forget that many people wait for price-drops and a larger stable of games, rather than just buying a system as soon as the one game they must have is out for it. With the 360's line-up and (probably) a price drop... that'll look very attractive to a lot of people.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
Get real. This is Microsoft we're talking about. 200 million dollars is chump change. They know for damn sure that the 360 is going to keep doing well, especially since the PS3 is such a fuckup. Just look at the 360's lineup this Fall. You think an MS exec is looking at that and saying "shit guys, time to throw in the towel"? As time goes on, manufacturing costs go down, more systems are sold as games come out, and MS starts to profit. It's inevitable at this point and how anyone can think they're actually in trouble is completely beyond me.
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
It didn't turn a profit in 2007. So what? Happens in all kinds of businesses, for different reasons, all the time, and without context it doesn't mean much.
Is Microsoft in a good position to turn profits from the Xbox in the future? If you're saying they're not, why not? Track record isn't good enough. You have to explain why they lost money in the past and why they'll lose money in the same way again.
Why would I have to explain why they lost money in the past? Lack of strong titles and their targeting of the mainstream perhaps? Failure to secure enough of the market before the competitors had a chance to catch up?
I don't know to be honest, nobody really mentionned the why. What I do know is I don't see them doing anything differently with their current business model. There hasn't been a change in respect to Live! pricing. Granted their lineup is a little stronger, perhaps that might turn the tide. Personally I think it's a little too late.
So you don't know why the xbox lost money but you're using it as the basis for your reasons that the 360 is gonna lose money?
I think this is a pretty good admission that you don't know what you're talking about
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
It didn't turn a profit in 2007. So what? Happens in all kinds of businesses, for different reasons, all the time, and without context it doesn't mean much.
Is Microsoft in a good position to turn profits from the Xbox in the future? If you're saying they're not, why not? Track record isn't good enough. You have to explain why they lost money in the past and why they'll lose money in the same way again.
Why would I have to explain why they lost money in the past? Lack of strong titles and their targeting of the mainstream perhaps? Failure to secure enough of the market before the competitors had a chance to catch up?
I don't know to be honest, nobody really mentionned the why. What I do know is I don't see them doing anything differently with their current business model. There hasn't been a change in respect to Live! pricing. Granted their lineup is a little stronger, perhaps that might turn the tide. Personally I think it's a little too late.
So what're you saying is that they've lost money in the past, and therefore will lose money in the future? Because with that logic, every investment ever made shouldn't have made money.
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
It didn't turn a profit in 2007. So what? Happens in all kinds of businesses, for different reasons, all the time, and without context it doesn't mean much.
Is Microsoft in a good position to turn profits from the Xbox in the future? If you're saying they're not, why not? Track record isn't good enough. You have to explain why they lost money in the past and why they'll lose money in the same way again.
Why would I have to explain why they lost money in the past? Lack of strong titles and their targeting of the mainstream perhaps? Failure to secure enough of the market before the competitors had a chance to catch up?
I don't know to be honest, nobody really mentionned the why. What I do know is I don't see them doing anything differently with their current business model. There hasn't been a change in respect to Live! pricing. Granted their lineup is a little stronger, perhaps that might turn the tide. Personally I think it's a little too late.
So you don't know why the xbox lost money but you're using it as the basis for your reasons that the 360 is gonna lose money?
I think this is a pretty good admission that you don't know what you're talking about
The original XBOX lost money for a variety of reasons.
A.)Initial R&D and the their shitty lock in deals with nvidia.
B.)Buying all those development houses.
C.)The ridiculous amount of money they spent on advertising the original oxbox. All those parties, give aways, print ads, tv ads, bribing IGN XBOX, starting their magazine, etc.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
I'm thinking no. Look I don't know for sure. All I see is red, money lost, stocks being sold, people leaving the company, conventions being canceled. I've been in jobs where people got shit canned and there's always little hints indicating that things are about to go tits up. Perhaps I'm a little biased because of that but from what I'm seeing, my prediction is that the xbox 360's the last xbox and Microsoft's done.
We'll know for sure once September rolls around and the holidays come and pass.
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
It didn't turn a profit in 2007. So what? Happens in all kinds of businesses, for different reasons, all the time, and without context it doesn't mean much.
Is Microsoft in a good position to turn profits from the Xbox in the future? If you're saying they're not, why not? Track record isn't good enough. You have to explain why they lost money in the past and why they'll lose money in the same way again.
Why would I have to explain why they lost money in the past? Lack of strong titles and their targeting of the mainstream perhaps? Failure to secure enough of the market before the competitors had a chance to catch up?
I don't know to be honest, nobody really mentionned the why. What I do know is I don't see them doing anything differently with their current business model. There hasn't been a change in respect to Live! pricing. Granted their lineup is a little stronger, perhaps that might turn the tide. Personally I think it's a little too late.
So you don't know why the xbox lost money but you're using it as the basis for your reasons that the 360 is gonna lose money?
I think this is a pretty good admission that you don't know what you're talking about
The original XBOX lost money for a variety of reasons.
A.)Initial R&D and the their shitty lock in deals with nvidia.
B.)Buying all those development houses.
C.)The ridiculous amount of money they spent on advertising the original oxbox. All those parties, give aways, print ads, tv ads, bribing IGN XBOX, starting their magazine, etc.
Yeah but the 360 exists because they got their foot in the door with the Xbox.
And Im sure the same will be said about the 720.
Microsoft has 2 consoles to its name. Nintendo already has a dozen. Small steps to greatness I'd say. If anyone thought Microsoft would be instantly profitable with their 2nd console then they are stupid stupid stupid.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
I'm thinking no. Look I don't know for sure. All I see is red, money lost, stocks being sold, people leaving the company, conventions being canceled. I've been in jobs where people got shit canned and there's always little hints indicating that things are about to go tits up. Perhaps I'm a little biased because of that but from what I'm seeing, my prediction is that the xbox 360's the last xbox and Microsoft's done.
We'll know for sure once September rolls around and the holidays come and pass.
Money lost... as an initial investment to break into an industry with MASSIVE barriers to entry.
Stock being sold... by one person in the company.
People leaving the company... because EA drove the money truck to their house and asked them if they want to move back to where their kids grew up.
Conventions being cancelled... because they're expensive and considering E3 just ended, a case of diminishing returns on investment.
If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
It didn't turn a profit in 2007. So what? Happens in all kinds of businesses, for different reasons, all the time, and without context it doesn't mean much.
Is Microsoft in a good position to turn profits from the Xbox in the future? If you're saying they're not, why not? Track record isn't good enough. You have to explain why they lost money in the past and why they'll lose money in the same way again.
Why would I have to explain why they lost money in the past? Lack of strong titles and their targeting of the mainstream perhaps? Failure to secure enough of the market before the competitors had a chance to catch up?
I don't know to be honest, nobody really mentionned the why. What I do know is I don't see them doing anything differently with their current business model. There hasn't been a change in respect to Live! pricing. Granted their lineup is a little stronger, perhaps that might turn the tide. Personally I think it's a little too late.
So you don't know why the xbox lost money but you're using it as the basis for your reasons that the 360 is gonna lose money?
I think this is a pretty good admission that you don't know what you're talking about
The original XBOX lost money for a variety of reasons.
A.)Initial R&D and the their shitty lock in deals with nvidia.
B.)Buying all those development houses.
C.)The ridiculous amount of money they spent on advertising the original oxbox. All those parties, give aways, print ads, tv ads, bribing IGN XBOX, starting their magazine, etc.
Yeah but the 360 exists because they got their foot in the door with the Xbox.
And Im sure the same will be said about the 720.
Microsoft has 2 consoles to its name. Nintendo already has a dozen. Small steps to greatness I'd say. If anyone thought Microsoft would be instantly profitable with their 2nd console then they are stupid stupid stupid.
I wasn't making a judgement call with my list, just giving reasons why ye olde OXBOX didn't make any money. I think they made mainly the right choices in entering the market, and I think they are on track to possibly take a strong second place this generation.
Oh, and I also made a thinly veiled insult directed towards IGN. I don't actually believe that Microsoft had budgeted out bribes for IGN XBOX, but it wouldn't surprise me. :P
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
I'm thinking no. Look I don't know for sure. All I see is red, money lost, stocks being sold, people leaving the company, conventions being canceled. I've been in jobs where people got shit canned and there's always little hints indicating that things are about to go tits up. Perhaps I'm a little biased because of that but from what I'm seeing, my prediction is that the xbox 360's the last xbox and Microsoft's done.
We'll know for sure once September rolls around and the holidays come and pass.
Money lost... as an initial investment to break into an industry with MASSIVE barriers to entry.
Stock being sold... by one person in the company.
People leaving the company... because EA drove the money truck to their house and asked them if they want to move back to where their kids grew up.
Conventions being cancelled... because they're expensive and considering E3 just ended, a case of diminishing returns on investment.
Well, if you put it that way it doesn't sound so bad. So, I would advise you not to put it that way.
So once again it goes back to the 'competitors are gonna pick up,' which since the Wii is already doing well, means the PS3. Fanboyish? While games will be coming out for those systems, they're certainly not gonna stop coming out for the 360 so why would its sales stop?
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
I'm thinking no. Look I don't know for sure. All I see is red, money lost, stocks being sold, people leaving the company, conventions being canceled. I've been in jobs where people got shit canned and there's always little hints indicating that things are about to go tits up. Perhaps I'm a little biased because of that but from what I'm seeing, my prediction is that the xbox 360's the last xbox and Microsoft's done.
We'll know for sure once September rolls around and the holidays come and pass.
So you're comparing Joe Schmo from marketing getting shit canned to a giant corporation backing out of a massive industry? This is your reasoning?
Posts
They are hurting so bad.
Nothing spells doom like increasing your profit $200 million from the same quarter last year
Nope, this one does: http://arstechnica.com/news.ars/post/20051228-5862.html
And no company in their right mind would ever make an announcement ahead of time that they're going to pull a product.
Also, no company in their right mind would pull a product when it starts to make money (finally).
Yeah, if that happens.
And that's going to be off by how many years?
WHY WOULDN'T IT?!
This is what you have failed to explain. The warranty stuff was charged to last year. So how can Peter Moore leaving and whatever else you mentioned lead to a non-profitable FY08?
Like I said, I'm anxious to see what September brings. If they pull out marginal profits like they did back in 2004, say 80 million or so, that would take them 62 years to make up the "investment" they put into the whole project in the first place.
That makes absolutely no sense. Marginal profits in one year, doesn't mean the same every year after that.
You can't even do your terrible predictions and math correctly. There are 4 quarters in a year, hence quarters. Continuous profits of 80 million/quarter would take 15.5 (62/4) years to recoup $5 billion. And I don't know why you used $5 billion since you've been using 6 the entire time.
Well their competitors have their consoles on the shelves now and development for these consoles is now in full swing. Not to mention the fact that the PC market is starting to look rather interesting.
Their track record shows that they aren't making money with their current product and are in fact losing money.
The last time they banked on a solid release they did earn profit for a period of 3 months that totaled 80 million only to fall short once again into the negative hundreds of millions.
That was the only period they recorded profits though Elkamil. See they expected the 360 to become profitable in 2007. It did not.
I'm not sure what point you're trying to make here.
Their 'track record ' is for the previous xbox which they could never cut production costs on, so it is irrelevant to discussion on the 360.
This post contains far to much logic. Wrong thread.
Well considering they've had 24 quarters since the inception of the division and only 80 mil to show for their efforts, I didn't want to give them that much credit.
The PC market is fucking dead. A midrange graphics card is now $300. Game companies are designing for the 360 first and porting to the PC as an afterthought. Last gen it was the other way around. High-ranking people at Bethesda and Epic have been quoted as saying that the PC gaming market isn't sufficient to sustain any sort of high-budget title by itself (although I expect Blizzard to be able to counter-prove that point).
And again, Microsoft has done this kind of loss-leader thing before. Their actual investors are used to it.
Well considering the 360 hasn't been making money since its introduction back in November 2004, I'd think that they would need to boost sales in some miraculous fashion to be able to pull out of the 200 million dollar hole they are in this quarter, push ahead, stay level to be able to eventually pay back the deficit and become profitable.
It didn't turn a profit in 2007. So what? Happens in all kinds of businesses, for different reasons, all the time, and without context it doesn't mean much.
Is Microsoft in a good position to turn profits from the Xbox in the future? If you're saying they're not, why not? Track record isn't good enough. You have to explain why they lost money in the past and why they'll lose money in the same way again.
You mean, like, make a price-cut as they roll out a hardware revision that supposedly cuts costs quite substantially? And pair that with an unbelievably good line-up of games (and no, they aren't just relying on Halo 3). Things like that might do it, no?
You forgot the fact that almost all 3rd party titles are ditching the PS3 for a multi-platform approach. Hence, why buy the more expensive competition?
I thought the 360 launched in November 2005?
They might also be able to bank on the fact that tons of people are paying $50 for live every year for something that some people on this board think is free for Microsoft. Add the people who will buy a 360 and get live just for Halo 3 and you got a ton of (possibly) free money!
It hurts his point to realize that the 360 was only put out a little more than a year and a half ago.
Not quite free, but I'm guessing that Microsoft keeps at least $45 out of that $50 per year.
No, you're right. They are relying on Halo 3 and GTA IV to drive sales. I don't care how awesome Mass Effect and Assassin's Creed and all the rest look, those aren't the type of games that sell systems in large amounts. Halo 3 and GTA IV do fit into that category and it will be interesting to see just how many people were waiting for Halo 3 to buy the 360 versus those that bought the system already and are waiting for the game. Same with GTA IV.
I personally know 3 people who recently bought a 360 after seeing videos of Assassin's Creed and Mass Effect. Those games are going to be selling systems.
Why would I have to explain why they lost money in the past? Lack of strong titles and their targeting of the mainstream perhaps? Failure to secure enough of the market before the competitors had a chance to catch up?
I don't know to be honest, nobody really mentionned the why. What I do know is I don't see them doing anything differently with their current business model. There hasn't been a change in respect to Live! pricing. Granted their lineup is a little stronger, perhaps that might turn the tide. Personally I think it's a little too late.
Yeah it did.
I stand corrected.
Get real. This is Microsoft we're talking about. 200 million dollars is chump change. They know for damn sure that the 360 is going to keep doing well, especially since the PS3 is such a fuckup. Just look at the 360's lineup this Fall. You think an MS exec is looking at that and saying "shit guys, time to throw in the towel"? As time goes on, manufacturing costs go down, more systems are sold as games come out, and MS starts to profit. It's inevitable at this point and how anyone can think they're actually in trouble is completely beyond me.
So you don't know why the xbox lost money but you're using it as the basis for your reasons that the 360 is gonna lose money?
I think this is a pretty good admission that you don't know what you're talking about
So what're you saying is that they've lost money in the past, and therefore will lose money in the future? Because with that logic, every investment ever made shouldn't have made money.
The original XBOX lost money for a variety of reasons.
A.)Initial R&D and the their shitty lock in deals with nvidia.
B.)Buying all those development houses.
C.)The ridiculous amount of money they spent on advertising the original oxbox. All those parties, give aways, print ads, tv ads, bribing IGN XBOX, starting their magazine, etc.
I'm thinking no. Look I don't know for sure. All I see is red, money lost, stocks being sold, people leaving the company, conventions being canceled. I've been in jobs where people got shit canned and there's always little hints indicating that things are about to go tits up. Perhaps I'm a little biased because of that but from what I'm seeing, my prediction is that the xbox 360's the last xbox and Microsoft's done.
We'll know for sure once September rolls around and the holidays come and pass.
Yeah but the 360 exists because they got their foot in the door with the Xbox.
And Im sure the same will be said about the 720.
Microsoft has 2 consoles to its name. Nintendo already has a dozen. Small steps to greatness I'd say. If anyone thought Microsoft would be instantly profitable with their 2nd console then they are stupid stupid stupid.
Money lost... as an initial investment to break into an industry with MASSIVE barriers to entry.
Stock being sold... by one person in the company.
People leaving the company... because EA drove the money truck to their house and asked them if they want to move back to where their kids grew up.
Conventions being cancelled... because they're expensive and considering E3 just ended, a case of diminishing returns on investment.
I wasn't making a judgement call with my list, just giving reasons why ye olde OXBOX didn't make any money. I think they made mainly the right choices in entering the market, and I think they are on track to possibly take a strong second place this generation.
Oh, and I also made a thinly veiled insult directed towards IGN. I don't actually believe that Microsoft had budgeted out bribes for IGN XBOX, but it wouldn't surprise me. :P
Well, if you put it that way it doesn't sound so bad. So, I would advise you not to put it that way.
So you're comparing Joe Schmo from marketing getting shit canned to a giant corporation backing out of a massive industry? This is your reasoning?