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Xbox business sees operating income plunge 94% in Q1

Microsoft has announced its first-quarter earnings for the period ended on September 30, and the Entertainment and Devices Division, which houses the Xbox and interactive entertainment business, saw revenues roughly flat year-over-year at $1.95 billion while operating income dropped precipitously, down 94 percent to just $19 million, but at least the company remained in the black. Shipments of the Xbox 360 console dipped from 2.3 million to 1.7 million units for the period.

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Nawert1379d ago

Looks like people want the next gen.

omi25p1379d ago

Or maybe everyone who would buy a console already has one....

EVILDEAD3601379d ago

But wait till they get a load of Quarter 2.

Black Friday and Holiday sales on console

Windows 8

Halo 4

And now the word is Micrsoft Surface is selling out of the entry level model..

Looks like it might be an interesting quarter for them

Evil

lastdual1379d ago

Halo 4 will be small beans compared to what MS will make when Windows 8 launches next week.

thorstein1379d ago

Yay! I haven't read a doom and gloom article about consoles on N4G in at least 3 hours. I am so glad somebody submitted this. I was going through withdrawal.

doogiebear1379d ago

Or maybe it's because people want new exclusives, to not be charged for online, etc. PS3 sales are at an all time high. No complaints there from fans. However, next gen is still welcome too.

JONESY61379d ago

Probably the only people that still buy Xbox 360s are people that have to replace their RED RINGED Xbox 360.

EVILDEAD3601379d ago

The other news was that out of the report was that the 360 shipped 70 Million. The article failed here immediatetly.

But, it's interesting that the 360 will probably end up at 80 million+ before the curtain falls.

Just to show how big this holiday may also end up huge..Kinect is going to be hotter than ever this holiday because of the big screen.

I don't know how MS pulled it off...but I just came back from Paranormal Activity 4 and it was the biggest Kinect commercial I ever saw.

Kinect was literally intertwined into the storyline and they did something in ot that I didn't even know Kinect could do, but will be emulated by millions after everyone sees it this weekend.

This may be the last hurrah for the 360 this year before the next gen, but like the Wii they had a good run. It's time to move on next year.

Evil

Blacktric1379d ago

Listing Windows 8 and Microsoft Surface. One can't get more desperate than this.

MaxXAttaxX1379d ago

What does Windows 8 and Microsoft Surface have anything to do with Xbox?
How desperate can you get.

You did read that it says "Xbox", right?

abzdine1379d ago (Edited 1379d ago )

it didnt even sell half of what the PS2 did or PSone did, so talk about everybody has one.

@EVILDEAD360: What a braindead fanboy you are. you sound like a microsoft executive trying to promote his console. Comment about the 94% fall or shut up. Kinect is a fail, you are the only one saying good things about itthe technology is broken it works correct 1/10 times. Remember that hype about Kinect Star Wars ? One of the worst motion controls games ever. Nothing for the hardcore, only desperate chick stuff.

http://www.otakufreaks.com/...

Athonline1379d ago

@Evildead360

As a freelancer software engineer I know fora fact that most businesses won't adopt Win8 anytime soon. The costs of upgrading and most importantly training personnel for the new UI that Win8 uses is far greater than the advantages over Win7. Even people in the IT industry switch to OS X/ Linux. There is a decline in the PC industry.
For MS Surface, at the current price it won't be a blockbuster. The price isn't competitive enough to compete with iPad and other well-established tablets. Moreover Apple is bringing out a new, cheaper iPad... It will sell, but not much, especially now that MS confirmed Office is coming for iOS/Android.

Oh and the article was about X-Box, not MS in general!

EVILDEAD3601379d ago (Edited 1379d ago )

'What does Windows 8 and Microsoft Surface have anything to do with Xbox?
How desperate can you get.
You did read that it says "Xbox", right'

LOL @ desperate..you did read the actual ARTICLE right?

Which is refers not ONLY to the 'Xbox' like the title, but THEN goes onto talk about the current quarter, which I was referring to and mentions Micrsoft Surface, Windows 8, AND Halo 4.

Here's the quote from the 4 paragraph article, which I'm SURE you read but for you got all emotional and started pretending I was desperate..

'Microsoft as a whole announced quarterly revenue of $16.01 billion for the quarter with net income of $4.47 billion. The current quarter will be a crucial one for the company with the release of Windows 8, the Surface tablet, and in the Xbox space, of course, Halo 4.'

So wait it gets better..

'@EVILDEAD360: What a braindead fanboy you are. you sound like a microsoft executive trying to promote his console'

LMAO at this fankid starting his comment with..

Bu-bu-but 'it didn't sell half as much as the PS2' but then he tries to call me out?

Does the title or the article mention the PS2? Does the article even mention Sony?

LOL..So I guess I'm allowed to call you a 'braindead' fankiddie so desperate that he has to use last gen PS2 sales in an article about this quarters Micrsoft operating income.

But, if I do exactly what you did I'm wrong right? LOL

Edit

@ Athonline

'Oh and the article was about X-Box, not MS in general!'

LOL..the article is about the operatining budget of the Entertainment and Services division which houses the Xbox, but also produces Windows 8, Surface, Windows phone, the games form PC to Halo 4...you know..all the stuff I mentioned.

Also let me clarify from above when I said

'The other news was that out of the report was that the 360 shipped 70 Million. The article failed here immediatetly.'

I dont mean THIS article fails..I meant the other article that also talked about the shipment numbers 'Failed' as it didnt get approved. This article is fine.

Evil

abzdine1379d ago

that's an example i gave you.. you talk about everybody owns one so i gave you a counter example of what you say. could have been a Gameboy or SNES or PSP or whatever console that sold more.
Your nickname tells better what kind of a person you are and what your preferences are, dont try to play the objective guy just try to assume it.

" I just came back from Paranormal Activity 4 and it was the biggest Kinect commercial I ever saw "

Blacktric1379d ago

@Evil

See you in a couple of months after Windows 8 and Surface gets tanked.

DragonKnight1379d ago

@EVILDEAD360: Would you just give it a rest? Seriously. Your PR schtick is really old.

bangshi1379d ago

Quite correct.

Market saturation has occured/is occuring.

Thus, they need the next-gen to make sure their revenues do not continue to fall.

So the original commenter is quite correct.

FredEffinChopin1378d ago

@Evildead360

How was what you said a reply to omi25p at all?

I don't know what is most nauseating about you, the fact that you'll just insert yourself wherever you're most visible, regardless of what comment thread you derail, the fact that you seem to think you will melt if any non-flattering fact about MS goes uncontested by you and your spin-machine, or the fact that you leave a signature on article comments as if someone is going to challenge the authenticity of your drivel. The only thing I'm certain about is that you come across as a really sad individual.

Yes, that was a personal attack, in case anyone is hovering indecisively over the button. Be fair though, and use that "not a reply" button when it's called for too.

bangshi1378d ago

@EVILDEAD360

Windows 8 is not housed within IEB... an operating system is hardly 'entertainment'.

Services within Windows 8 (ie. Xbox Music etc) are, but not Windows 8 itself. That has its own department.

+ Show (14) more repliesLast reply 1378d ago
dedicatedtogamers1379d ago

Yeah it's pretty common that profits drop significantly as a console generation comes to a close. But it'll shoot up (for everybody) around the holidays again.

mcstorm1379d ago

I agree. Sales always dip off in this quarter as there is not many big name games out. But Look what we have in the next 3 months. Forza Horizon, Halo 4, COD BO, MOH, NFS, Doom, Fable, Dance Central 3, Just dance 5, Asian's creed, FarCry 3 and Hitman are just a few that will help sell consoles plus add that to the Christmas rush I see Microsoft Nintendo and Sony having a good 3 months.

Britainz-Fin3st1378d ago

Also we are in a global recession showing no signs of slowing.

hellvaguy1379d ago

I want next gen, but to get what id like in hardware specs, at an acceptable price point for most gamers, its better to wait until next fall or the following year. Vesus rushing something out thats half concieved and not as powerful as youd like.

CraigandDayDay1379d ago

Totally agree man. I want some pretty powerful next Gen consoles. But I don't want to pay more than $400 or so.

kma2k1379d ago

Im just hoping my systems hold up until next gen, im sacred to use my ps3 since its an old 40gb fat the fans go into hyper loud almost all the time. I only touch it for exclusives anymore but it scares me to use it.

Barneyco1379d ago

It sounds like you need to get the thermal paste replaced. It made a world of difference on my 40gb fat ps3. Check gophermods.com, they did a great job on mine. Good luck

hellvaguy1379d ago (Edited 1379d ago )

The bearings on your fans are worn out and not getting proper lubrication is why they get loud when they are old.

Watch a youtube video and buy a $10-20 fan. Very easy fix, but a little time consuming to get inside game consoles.

kma2k1379d ago

@barneyco thank you i didnt know anyone offered a cleaning service i thought it was all after it broke kinda thing. Im gonna send my ps3 in asap! Thank you!

doogiebear1379d ago

Get a slim or superslim, it has a buttload of memory, however, if u want ps2 compatability, then nevermind

moparful991379d ago

I made the mistake of trying to clean my launch 60 myself.. I carefully took the system apart and memorized where every component, screw, wire and cleaned it carefully. While puttig it back together a wire that goes from the touch panel on the front to the blu ray drive was pinched by a screw and grounded it.. When I turned the system on it turned on fine then made a strange noise and red lighted... that was 3 years ago, but I have a slim now that runs phenomenally..

SirBradders1378d ago

@MOPARFUL99
I made a similiar mistake on my 60fat, it all happened when that date glitch happened a few years ago instead of just thinking it was a software problem I opened it up thinking I'm some repair guy forgot the plug was still on and tried undoing a screw latched on to the power pack somehow and let's just put it this way I got stuck to the screw driver for a few seconds and jumped up like a fairy lol then nerd raged battered it and had to buy a slim.

+ Show (3) more repliesLast reply 1378d ago
Ranma11379d ago

I used to be a sony fanboy.

But now I love my Xbox, PS3 and Wii.

But still i love the PS3 the most, although i play on 360 most because i have 100+ games on that

;)

shivvy241379d ago

lol at the haters disliking ur opinion

JellyJelly1379d ago

I dislike the fact that he's obviously pirating 360 games. Hence the wink at the end.

carlocgc1378d ago

I like the fact he's pirating Xbox games.

Britainz-Fin3st1378d ago

Can you guys tell me where you got your psychic powers from?
I have over a hunder 360 games and im no pirate.

+ Show (1) more replyLast reply 1378d ago
torchic1379d ago

Intel, Google, now Microsoft.

all the tech giants are posting weak earnings, so I don't think next generation has all to do with it, maybe a little bit

fermcr1379d ago (Edited 1379d ago )

Decrease in console sales is not surprising. Lot of people are waiting for next gen and Microsoft didn't release big hitters for that period.

Big hitters (Halo and Forza) are to be released this quarter, and Gears to be released 1st quarter next year.

After that i expect a new console announced at E3, and released October/November 2013.

Bigpappy1379d ago (Edited 1379d ago )

There a lot of gamers who are looking forward to next gen Xbox and PS, which will start next fall at least for Xbox. But the sales problem, I think, has more to do with the lack luster summer, as far as games are concern. The last new game I bought was ME3. I did finally pick up The Witcher2 for 360, but that was out for a while.

Remember, PS3's aren't exactly flying off the shelves either. The economy is still weak, and people will only spend money when you give them a good reason to (Halo 4). Watch those numbers shoot up this fall.

Britainz-Fin3st1378d ago

Hmm. IMO gamers who are waiting for the next gen already have a console.

Infact i doubt there are many people out there whom are thinking of buying a ps3 or xbox but deciding not to just because some un-anounced consoles maybe close round the corner.

Sales might be slowing down because of tough economic times, not everyone has disposable income at the moment with all costs soaring sky high.

Anon19741379d ago (Edited 1379d ago )

I expected 360 sales to be down roughly 40% again, because that's what they've been down all this year and that's also the dip we're seeing in the US. There's been nothing to change that. However, seeing profits for the EDD drop 94% was a bit unexpected. That certainly doesn't compute with the drop in 360 sales we've seen.

This article doesn't mention it but the reason for the drop in income is rather exciting. Microsoft has officially kicked their Xbox R&D department into full gear. While everyone knows the 360 was nearing the end of it's lifecycle, we haven't thus far seen the increase in spending that would indicate the next Xbox was full speed ahead. We're seeing it now, and if the Xbox 360's development is anything to go by, based on how quickly the 360 was released after the R&D suddenly kicked into high gear, I think it's now pretty much official. We'll see a new Xbox revealed at E3 and launched holiday 2013.

They're going to beat the next Playstation to market again as there's no indication in Sony's financials of an increase in R&D big enough to indicate a new console. Unless, of course, we see that increase in R&D spending in Sony's financials in a few weeks. If that's the case, next Christmas could be very interesting, but I somehow doubt Sony's ready for the next gen so soon, and PS3 sales aren't slowing nearly to the degree we've seen from the Wii or 360. 2014 is more likely.

hardcorehippiez1379d ago (Edited 1379d ago )

but i remember a while back that sony said they wouldnt be investing too much into r+d this time round as they already had done that with the ps3 and layed out the plan for the ps4 within that cost hence reusing bluray and cell. dont forget all weve heard so far have been rumour and speculation. if sony go with updated cell and faster br drive then they dont need to spend much on r+d there and didnt sony just buy out gaikai . thats a pretty big investment thats guaranteed to be used with the ps4. relax the ps4 is coming soon.

moparful991379d ago

You are doing an awful lot of speculating. For starters Microsoft would be foolish to release the next box so soon. Did they not learn their lesson after rushing the 360 to market and eating a 1billion dollar repair bill? They have an established fan base, however there would be far less tolerance of a console that fails at such a high rate.

Sony on the other hand thinks way in the future. A larger chunk of the R&D that was spent during the ps3 development was also intended to lay the ground work for the ps4. Blu-ray being the biggest component of that plan.. Now that blu-ray is established and the standard hd media it will drive down the development costs of the ps4 which tanslates to a cheaper price tag.. Sony will release at or around the same time as the next xbox...

pablo-b1378d ago (Edited 1378d ago )

nice post darkride.

but i think you are correct about the next xbox coming next year. i also think that they will beat sony out the gate because sony arent nowhere near ready.

sonys sales arent spectacular either! so i dont think that that is the reason. i personally think that sony just dont have the reslurces (money) to allocate towards ps4 r&d. or the board has not made it a priority, or they want the ps3 to return even more before they sanction a new console etc.. we just dont know!

when sony showed off some new i.ps this late into the cycle (not long in germany i think), it just smacked of "we dont have any plans for a new console anytime soon".

quite honestly, if sony give microsft and nintendo big headstarts, it could end up an absolute disaster for them.

i hope for the sake of console gaming that they dont!

DiRtY1379d ago

I expected these articles, but not from gamesindustry.biz

The Xbox 360 still makes enough money to compensate Windows Phone. That is the real news here.

They increased their R&D (Xbox 3), carried WinPhone and made 19 million USD.

MS as a whole and the Xbox business as well are by far in the best situation out of the three manufacturers.

KUV19771379d ago

All it needs is more Kinect-Titles :D

Edward751378d ago

The difference between MS and Sony.... Sales dropped but MS stayed out of the red. Sony cant get in the black.

morkendo231378d ago (Edited 1378d ago )

Shipments of the Xbox 360 console dipped from 2.3 million to 1.7 million units for the period

all the tech giants are posting weak earnings, so I don't think next generation has all to do with it, maybe a little bit.

Omnislash1378d ago

@EVILDEAD360

http://careers.microsoft.co...

Youre on the wrong site pal, why are you doing it for free when you can land youself a job spewing BS for Microsoft?

+ Show (13) more repliesLast reply 1378d ago
ChunkyLover531379d ago

Market is saturated, but we have to keep in mind that R&D and the Windows Phone count towards Xbox operations. The Xbox 360 actually makes profits on units sold.

Muffins12231379d ago

Yea,like 3 years ago,the new xbox slim is very durable and never gets RROD.... ignorant comment

palaeomerus1379d ago

R&D is "research and development" meaning spending money to develop new technology to be used in future consumer oriented products and services (like a new console possibly next year) not "Red Ring of Death".

So your 'ignorant comment' comment was kind of ignorant.

Dlacy13g1379d ago

I am sure all the console makers are going to see similar numbers given how rough this year was for hardware sales.

Dungeoncrawler1379d ago TrollingShowReplies(3)
unchartedxplorer1379d ago

But it's still a sharp drop. It looks like people are either hungry for next-gen. We'll have to wait and see if the ps are experiencing the same crisis