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Microsoft Announces Q3 Financial Results: 1.2 Million Xbox One Consoles Shipped; Xbox Revenue up 45%

It's quarterly financial results day at Microsoft today, and Redmond's corporation sent in a press release right in time for its earnings report right in time for the closure of the markets.

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Axios2885d ago (Edited 885d ago )

$20,000,000,000 in revenue

Well done

The "Devices and Consumer hardware" devision account for almost $2 Billion in revenue for this quarter.

"Xbox platform revenue UP 45%"

KendrickLamar885d ago

20B in revenue not from Xbox, from the company as a whole.

georgeenoob885d ago (Edited 885d ago )

Xbox is at its most successful state now than it has ever been. Congrats to MS.

@kingthrash

Sorry, forgot this was N4G. M$ is d00med!!

NewMonday885d ago

"On the other hand gross margin decreased by 34%"

"xbox gross margin =0"

Kingthrash360885d ago

lol george.
c'mon man really?
lol too much...i should +bub you for "funny"

Thehyph885d ago

The next quarterly will be better. (Office on iOS)

It's important to note the difference between revenue and profit.
Read the quote from NewMonday and then look up gross margin.

Xbox does not truly appear solid to investors on this sheet, BUT I will give Xbox the benefit of the doubt here and say that the next few quarters Microsoft will spend recouping R&D costs for Xbox One.

mikeslemonade885d ago

Yea of course you revenue goes up when you just released a system as compared to just selling 360s.

That's all Microsoft can say. The system is faltering and they're using zombie stats to try to spin the good in the numbers.

FriedGoat885d ago

bubbled george for funny. good idea kingthrash

truefan1885d ago OffTopicShow
Pogmathoin885d ago (Edited 885d ago )

For 1% of that profit, I could care less about the Great Sony/MS wars...... Just drop 1% my way..... Will not be missed....

Edit: NewMonday, you some kind of Killjoy or what? You would kill an orgasm with Kate Upton..... Try be cheerful!

TomShoe885d ago (Edited 885d ago )

So about 3.8-4.2 XBOs sold compared to 7M+ PS4s.

The Xbox might be able to win back the US, but it's not looking good. Losing all of that XBL free money won't help either.

UltimateMaster885d ago

1.2 million shipped in the 3rd quarter?
I tough it was more, around 2-3 million.

tbone567885d ago

Unbelievable. Net profit was around 15 billion? Holy cow.

RoboticusRex885d ago (Edited 885d ago )

Sony is worth more than 20 billion
Sorry to burst your xbubble @truefan

scott182885d ago

lol @ shipped numbers, MS is too funny. Nintendo and Sony should jump on the shipped numbers train too.

JoySticksFTW885d ago

So X1's shipped for the whole quarter (1.2 mil) what PS4 sold through to actually customers in one month (1 mil).

Dang, MS... Say goodbye to that marketshare you gained last gen at this rate.

kneon885d ago

@scott182

It would make little difference to Sony's numbers
at this point as shipped and sold are nearly the same.

MysticStrummer885d ago

XB1 is selling better than XB, which did ok but released late in the game against the juggernaut PS2 so it never really had a chance, and 360, which was in short supply at the beginning of it's lifespan.

1.2 million consoles (XB1 and 360) shipped isn't great when the competition is actually selling so many more of just it's new console on a consistent basis.

I wonder how much of the increase in XB revenue is due to XBL being required now...

GameNameFame885d ago

So 1.2 million sold over 3 months.

That is nothing.

PS4 is selling over a million per month. lol

DragonKnight885d ago

@truefan1: This isn't a Sony article, is there any reason you decided to bring them up?

I hope you realize that $20 billion is more than you're worth, guess you'll be going bankrupt soon and won't be able to post your troll comments on here anymore right?

Kribwalker885d ago

20 billion in net profit in the last 9 months is equal to Sony's losses the last 5 years. I really think sony needs to rethink their buisness plans as something's just not working for them. Hate all you want, but Microsoft knows how to make money , they get almost 2 billion a year on android royalties alone. They may not be selling as many consoles, but as a company they'll be around a lot longer then Sorny at this rate

uptownsoul885d ago

@truefan1 "It looks like XBOX is under a secure umbrella, no leaks." The Xbox division during it's entire history has been a loss for Microsoft. In other words, Xbox IS the leak.

morganfell885d ago

Good analysis on the X1 numbers at Gaf: http://www.neogaf.com/forum...

PS4 has almost doubled the X1 on sold to consumers.

jebabcock885d ago (Edited 885d ago )

Just to put things into perspective.

For the quarter MS reported a $20billion in revenue overall... $1.97 billion included all hardware devices sold.
Of that $1.97billion approximately $600million came direct from console sales of X1(1.2mil * 500). another $200 million came from the 360(.8mil * 250).

The surface tablets alone accounted for $494 million which roughly equates to 1.2 million sales(494mil / ~$400).

The rest probably came from other peripherals and mobile devices that ms sells.

The total revenue for all Devices & Consumer Other category was 1.95 billion which included office 365, ad revenues generated from sources like bing as well as xbl transactional revenues among other things. I would guess at least half of that comes from bing and potentially alot more as it now has an 18% market share in the US. I'd guess that 500-600 million might be reasonable for xbl transactions. Might be generous though too. I'm shooting in the dark here.

Revenue is meaningless though. The actual net income overall for MS was $5.6 billion. This is what they gained after subtracting all costs. For all of devices and hardware the gross margin was $256million. Please stop and let that sink in for a moment. The actual net income would be less than that as the gross margin does not factor in all costs... (they neglected to report any net incomes at this level in the article as MS probably didnt report them either).

Last year the gross margin for the same quarter was 393 million. Its nearly half as profitable as it was at this time last year. That is what georgeenoob means by being at its most successful state.

The gross margin (which again doesn't include all costs) for Devices and Consumer other(bing, office 365, xbl) was only 540 million. Once again the net income is less than that. and the xbl generated income is less than that still probably by at least half. That is for the massive install base of the 360 along with the x1.

To say it is doomed isn't true, but these aren't exactly good numbers or something to be exactly proud of. The margins and volumes even on the software side do not look too stellar. I understand why they are hiding things.

@truefan Generating 20billion is not the same thing as being worth 20billion. A company could theoretically generate 100 billion in revenue but if the margins are terrible and they have no assets, the company may only be worth a 100 million or less on paper. Typically its assets and current and projected profit margins that determine worth. Revenues have little to do with it...

JohnnyBadfinger885d ago

Lol at people who think sold to consumers and sold 2 retailers are a different thing entirely. They are only insignificantly different at best.

Why would a retailer order more consoles if they arent being sold? Bottom line is no matter where you go now you can find PS4s and X1s sitting on the shelf. Get this stupid idea out of your head that your PS4 is still in red hot demand. Month after month their sale figures prove its decline just as much as the X1.

PS4s price just helped it grab its early adopters when most of the console gamer community are still content with their last gen consoles. X1s price tag is its reason for its slow start, just as it was for the PS3. Fact.

feel free to respond to my reply but i wont be reading it so your views opinions and insults wont be received by me.

DragonKnight885d ago

@johnnybadfinger: They are different things. Sold to retailers represents available stock and can remain as available stock indefinitely. Sold to consumer represents stock that has been sold through and requires replacing, meaning a necessity to produce more product to sell to retailers.

Microsoft can sell 5 million to retailers, but the retailers could only sell, say, 3 million. This means there are 2 million units out in the wild not being bought which forces either Microsoft, or the retailer, to take measures to make the console an enticing purchase. This may result in bundles, or price cuts where either Microsoft or the retailer take a hit in their own profits just to get the product off their shelf.

Sony selling 7 million to consumers means that everyone is making money. Sony, and their retail partners, don't have to resort to bundles or price cuts in order to get the product off the shelf and so they are making more and more money all the time.

Needless to say, Microsoft wouldn't want to be in the position of having no reason to replenish retailer stock.

chuckyj1884d ago

If you actually read his comment that's exactly what he states... He never states the$20B in revenue is from the Xbox Division... Be he does correctly state that almost 2 Billion of that is from the Devices and Consumer hardware (Xbox is part of that division)

Now let's sit tight and see if Sony can pull a profit. It's been a while since they've been in the black ink as a company as a whole.

jebabcock884d ago (Edited 884d ago )

@chuckyj1

Revenue isn't profit... MS likely took a significant loss on the X1 according to the numbers we see here..

According to the article, the revenue is 2 billion for hardware devices. but gross margin was only 256 million.

the profits for all hardware devices would be a chunk less than the gross margin(which subtracts only part of the costs). The x1 is one part of quite a long list of devices and peripherals that MS includes in this amount.

Also note that the Hardware devices division had a drop of 34% in its gross margin which is much more closely aligned with profit and makes the 45% increase in revenue kind of a bad thing. It is a strong indicator that the X1 is in the red and eating into profits. As much as people want to pretend the reported numbers are good it is never a good sign when you are charging people ALOT more money but making less of it yourself. We call that a lose-lose situation.

So yes MS is likely taking a loss for the actual console sales. They may be recouping it from transactions in XBL. No way of knowing really just how much profit the XB1 is generating there though. I'm sure the 360 generates a decent amount due to the install base, but i would wager the x1 is still fairly small due to only having a fraction of the install base of the 360.

To be honest i would be shocked if Sony isn't taking a loss on consoles as well at the present. Once again online transactions will enable profitability for sony just like MS.

UltraNova884d ago (Edited 884d ago )

@dragon

And to add to your breakdown, when your product barely sells (compared to the competition) you have to keep retailers happy in order for them to accept your product that will sit in shelves and storage for god knows how long.

One common practice is to is give free merchandise to that retailer or increase their profit margin by decreasing yours per product sold to them, not by much but just enough. Its a necessary hit wholesalers have to take from time to time. (This goes further into why their net profit might be even lower than you guys estimate)

I can definitely see MS trying this especially when they need to present yearly and quarterly reports to share holders.

DiRtY884d ago

Why do I have to correct N4G users every 3 months?

first: Every company reports shipped numbers in their financial reports. EVERY COMPANY. Apple, Sony, Microsoft, Samsung, Nintendo. E.V.E.R.Y.

Got this now?

second: This puts Xbox One at 5.1 million consoles sold to retailers (See what I did here?) at the end of March.

Third: Sonys market cap is 18.96 billion USD now. If you want to buy 100% of Sonys shares, you have to pay this amount. So if MS invested their operating income for the last 9 months, they could buy 100% of Sony. (In theory, share prices will go up if someone wants to buy that much, but you get the idea).

Sony will report their financial results soon and after 5.66 billion USD net income is bad now, breaking even after years of losses becomes 'doing great'.

rainslacker884d ago

@george

The last few years of the 360 were much more profitable for the Xbox division. X1 is selling more than the 360 did in the same time frame but the 360 monthly sales the past few years still dwarf the current X1 sales overall. 360 was selling at a pretty decent profit margin, so while MS isn't doing poorly based on the 360, your assumption is just wrong.

AndrewLB884d ago

Well according to their quarterly report, M$ has sold a total of 5 million Xbones. That's 800k more than what Vgchartz claims. And since this is a quarterly report where it's highly illegal to lie or even play loose with the facts, looks like VGchartz has been under-estimating Xbone sales by almost 20%. http://www.forbes.com/sites...

Also... to all the Sony fanboys out there. Can someone please show me where in Sony's announcement of 7 million PS4's sold does it even mention "to consumers"??

http://blog.us.playstation....

If Sony truly had sold that many to actual people and not stores, you'd think their announcement would have specified this right? Notice how they DID make it clear about the game sales to consumers though. hmm..

Ritsujun884d ago

It's okay, MS. Don't ever give up!!! lol

TheRealHeisenberg884d ago (Edited 884d ago )

Exactly so this should be considered great news for all the Sony employees and Sony Fanboys that own MS stock and bad news for anybody that wants to see MS fail. Seems to me that MS and Xbox will continue to be around for a while which should be considered great news for gamers that are reaping the benefits of the competition for our money. Game on whatever you choose but chill on the hate. I mean damn...there is a lot of hate going on in here for MS and it is just pathetic. N4G would be such a better place if fanboys just stayed in news for their consoles of choice.

DragonKnight884d ago

@AndrewLB: Don't you think that if Sony knows how many games they sold to consumers (which is a result of turning the PS4 on, connecting to PSN, and playing the game) that they know how many PS4s they sold to consumers via the same method? Face facts, they sold 7 million to consumers.

morganfell884d ago

Yes every console manufacturer reports shippeed numbers BUT... there is an ocean of difference between shipped in and shipped through which are the two methods of reporting. You can bury your head in the sand and pretend those numbers do not matter or you can deal with the facts.

illtownNJONE884d ago

Sony is worth 16 billion as a whole

frostypants884d ago

@JohnnyBadfinger, channel stuffing is a thing. Companies do it.

morganfell884d ago

http://www.gamasutra.com/vi...

"We do expect to work through some inventory in Q4," said Hood, referring in this case to the period between April 1 - June 30, 2014. She also referred to "channel inventory drawdown for Xbox consoles," implying that manufacturing of Xbox consoles will slow or stop, to allow retailers time to work through existing inventory.

PONTIAC08G8GT884d ago

I love how many haters are on this website. Why does it bother you if they sold 8 million X1's in a month or 8? Like does this really matter to you? It's so funny reading all these posts and how everyone is a financial analyst or gaming expert. It's pathetic how many sad people are on here. Getting panties in a bunch over numbers Microsoft released, who honestly cares. If you bought a PS4, knock yourself out. You bought an X1, good for you. If you bought a Wii U, well I just feel bad for you lol.

+ Show (35) more repliesLast reply 884d ago
christocolus885d ago

I wish I had some of that in my bank account right now. That's a alot of cash and Bill just keeps getting richer every day and yet he lives such a simple life style.

Well I hope this spurs the new management to continue investing more into the xbox division. Nadella im talking to you. Sign off another $1b for games.

NewMonday885d ago

you will get $0 in your bank account because if look up the actual profits after revenue the number is "0"

DiRtY884d ago

@NewMonday

Only on N4G false information get agree votes.

The profit for the Devices and Consumer Hardware division (Xbox 360, Xbox One and Surface) is 260 million USD and this does not include first party games!

MS as a whole reported a 14.5 billion USD profit for 3 months.

Where did you get that nonsense from? The last quarter the the devices and consumer hardware (former EDD) division reported a loss was July 2012. The EDD post an annual profit since 2008.

This is not Sony we are talking about.

Magicite885d ago TrollingShowReplies(5)
The_Infected885d ago (Edited 885d ago )

So 2 million Xbox consoles shipped and 1.2 million sold. So that leaves 800,000 on shelves?

papashango885d ago

title is saying 1.2 million shipped...what are you reading?

Thehyph885d ago (Edited 885d ago )

The report states that 2 million Xbox consoles were shipped, and 1.2 million of those units were Xbox One consoles.

They only stated shipped and not sold through which implies that of the 2 million units, 1.2 were Xbox One consoles. Therefore, the other 0.8 million units shipped had to be Xbox 360 consoles.

They do not need to specify between shipped and sold because they're technically off Microsoft's hands either way.
edit: Sold is, obviously, better though. Sold consoles mean software, service and accessory income.

LetoAtreides82885d ago

Off Microsoft's hands but stores won't reorder additional units until those Xbones leave the shelves.

jebabcock885d ago

the 800k is xbox 360s... read the article...

jebabcock884d ago

Lol at the disagree. It literally is 2 million consoles sold. 1.2 are x1s and 800k are 360s.. Thats what it states.. from the article:

"Of course there are news specific to the Xbox division as well, and according to the company, during the quarter 2 million Xbox consoles were sold in (shipped) to retailers. Of those 1.2 million were Xbox One units, while 800,000 were Xbox 360."

+ Show (2) more repliesLast reply 884d ago
Utalkin2me885d ago (Edited 885d ago )

They shipped a paltry 1.2 million Xbox 1 units in Q3 and people think they got 20,000,000,000 in revenue, lol. The Xbox division is still in the red and the only reason MS makes a profit is due to having a monopoly in desktop OS....SMH

Dewitt885d ago

Wow you are so clueless it isn't funny. Actually, read the article before you post.

fr0sty885d ago (Edited 885d ago )

Actually, he isn't clueless about Xbox being in the red. The original Xbox lost 4 billion dollars. The 360 went on to lose a billion more with RROD. So far Xbox as a brand has never turned a dime of profit, it hasn't even repaid its investment to the company. This is why so many are calling for it to be sold off.

That said, Sony erased all of their PS1 and PS2 profits with PS3, so they haven't been profitable with gaming either... though they haven't lost as much as MS has when you factor everything together. PS4 is also selling like hotcakes, so that picture only continues to improve.

fonger08885d ago

@Utalkin2Me yes technically Xbox is in the red but so is Sony in that timeframe... so not really sure where you're going with that.

@Fr0sty Xbox turned a profit for 4 years straight (2008-2011). Though they've lost 3 billion (2003-2013), and Sony has lost 5 billion over that same time frame. Gaming is an expensive venture...

http://www.neowin.net/news/...

k3rn3ll885d ago

Actually the majority of their money is made off enterprise now a days.

+ Show (1) more replyLast reply 885d ago
Nekroo91885d ago (Edited 885d ago )

TrueFan let me explain how it works...

It doesent matter for the xbox if the company makes 20 billion in profit (twice as much Sony value) because the xbox division is non profitable. And hey stock owners want to make MORE money, not lose it to make kids like you happy.

Theres a reason why the CEO wants to sell it ...to make the board happy.Its a business when is non profitable its time to cut..just like what sony is doing with pc division

miDnIghtEr20C_SfF885d ago

Wow.. Looks like Xbox is really in trouble.. Insert rolling eyes gif here. Up way big time than before.

All the die hard Sony fans will not want to believe the factual numbers.

Here we go!

LambOfLucifer79885d ago

You know if you're pro xbox on this site you'll be downvoted. That's hysterical to me. Honestly, it looks like xbox is doing really well. Let's see how many disagrees I get. LMAO

randomass171885d ago

The best way to look at it is Xbox One may not be outperforming PS4 but it's still doing respectable numbers. No reason to downvote anyone for being happy about that. The Xbox One could be doing much worse than this and people don't seem to realize that.

Jazz4108884d ago

Sonys projected report for the quarter is more loses and its around 5 billion this year. Sony is in trouble as a company and ms is doing great as a company. Go ahead and break up little pieces of the company to try to make ms look bad when its the bottom line that matters and thats Ms is makeing a profit consistantly while sony has lossed over 3 times what the company used to be worth maybe more. Like I said its the bottom line that counts and alot of companys keep divisions around that dont make huge profit because it can be used in other venues. Im not trying to rag on sony so dont rag on ms when all they did was generate more billions in a quarter.

Thunderhawkxbox885d ago

Woow look at Sony fan boys giving u dislike guess wat Sony fan boys Microsoft doesn't have to se their building or laptop or tv division at least try to enjoy your last console which is indie station 4 before Sony goes completely bankrupt

XxExacutionerxX885d ago

Xbox One!!!! Greatest system on the planet!!

Lowsnamebrand884d ago

Good job passing an opinion off as fact, even though the console is selling less and has bottlenecks the competing console doesn't have...

TripC50884d ago

Read xxEx and lows comments above.

Sums up what happens all day everyday on N4G.

medman885d ago

Yet more meaningless bs stats from the Microsoft camp who prefer deflection and distraction to actually telling gamers how many consoles have actually been sold to consumers. Shameful. F Microsoft.

BG11579884d ago

They will be able of telling you how many bullets were fired in certain games. How many hours per day people live the bone on. How the revenue from ads increased.
But consoles sold to costumers? That's pure science fiction man. Let's keep it at consoles sent to retailers. Those are good numbers.

sak500884d ago

Much better with games and updates than the always mum sony who have no clue how to update their new console since they haven't updated a single thing since it was launched. Turning their rabid fanboys into mental patients who can only vent their frustration by trying to troll MS articles.

They are called Sonmbies. Sony's zombies.

Alsybub884d ago

@medman

These are the stats given to shareholders. They cannot lie on these. If they do then they will be breaking the law. If you have insider information I suggest you report it to the relevant authorities.

Also, it is a requirement that the numbers are based on shipped. If you have an issue with this you should take it up with the international stock exchanges.

Muzikguy884d ago

I couldn't for one second believe that was all "Xbox". That's a ton of money. They would need to sell 40 million XboxOnes to do that O_O (well, games too but still)

Alsybub884d ago

It's because that figure is for the whole company.