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Microsoft: Goldman Sees At Least $170 Million In Halo 3 Revs In Q3, Driving Xbox Into The Black

Microsoft (MSFT) has set September 25 as the official release date for Halo 3, the new version of its wildly popular first-person shooter for the Xbox 360. Halo 3 may not drive Microsoft's financial performance with the same force as Vista and Office, but it really does matter to the company's bottom line - and in fact could drive the company's entertainment group, which includes Xbox, to a profit in the September quarter.

That's the conclusion of Goldman Sachs analyst Sarah Friar. In a research note this morning, she forecasts that Microsoft will ship 4.2 million copies of the new game into the channel in September, generating an estimated $170 million in revenue for the company. Friar thinks that is a conservative estimate, and that the actual total could as much as $50 million higher. Friar notes that the retail price for the standard version of the game will be $59.99, up from $49.99. She also says her estimate on the number of consoles installed "could be conservative," and says Xbox 360 sales could get a boost in the fall from both the release of Halo 3 itself, and from "a potential price cut" for the console, "perhaps in sync" with the game's debut.

Friar says her base case for the game "pushes the segment into slight profitability for the quarter."

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Black Republican3858d ago (Edited 3858d ago )

sept. will be
HUGE
for x360
even if for some reason H3 does not generate alot of hardware sales the software sales for H3 will be amazing.

love it or hate it - no one can stop the success H3 will have.

THAMMER13858d ago

To hit that target of 107 million all they have to do is sell 2.9 million copies of the $60.00 version of Halo 3. I'm so glad they moved up the release date.

closedxxx3858d ago

*NOTE* I do remember reading that HALO 3 preorders have already surpassed 4 million. Those all go toward "Day 1" sales figures

calderra3858d ago

GameStop *claimed* to have Xmillion pre-orders, but according to one site, that meant that each store in the chain would have had to average over 1,000 pre-orders (again, per store). That's just a bit unrealistic.

But pre-orering 4million at large wouldn't be so surprising.

sajj3163858d ago

"Friar notes that the retail price for the standard version of the game will be $59.99, up from $49.99."

I hope as a analyst, she is taking into considering the cost of development into a next gen game and why its $59.99. We won't really know the actual cost of development until later and only than can we estimate on what kind of profit that Halo 3 will produce.

A potential price cut with the release of Halo 3 is not necessary at this point. I say at this point because there have been no indication yet of PS3 sales being bolstered due to 'positive press' after Gamer's Day. The 360 will only cut its price if they see significant gain of PS3 hardware sold in the coming months. They are indeed in a good position.

I do think that the MS Game Studios will finally get in the 'Black' after all these years of being in the 'Red'. I think MS has done all the right things so far into being a profitable company.

eques judicii3858d ago

since halo 2 did 125 mil in rev on the first day there should be at least a 24 mil increase (2.4 million buyers X 10 more dollars per copy) but then if they couple that with the collectors/legendary edition the revenue will be up even higher. considering the legendary edition is twice what the normal costs every purchase there is almost like 2 overall purchases. So if they sell 100,000 legendary editions that's the revenue equivalent of 200,000... if you figure that some of the people that bought halo 2 are getting the legendary (like me) then the figure is no longer 2.4 but 2.5 (so 2.5 X 60 = 150 mil) If we then figure that microsoft is correct in stating that 50% of xbox 360 owners did not own the original xbox then we could see maybe half of them buying halo 3 because they want to try it out (of course, probably on 10% of that 50% will actually buy it on launch day) Figuring that that equals about 5 million users, 500,000 of which will buy halo 3 on launch day (who never owned an xbox) that could put total first day sales at around 3 million X 60 = 180 million.

This is all speculation... if they really hit 4 million preorders who knows what will happen on sept 25.

closedxxx3858d ago

Good point... And, another good point...
The Halo 3 cash cow will be paying out on 9/25/2007.
I'm with you. I think Day 1 sales will top this Q3 GUESStimate. Preorders are already through the roof. I'd like to know how much money is already "guaranteed" from pre-order sales.

Odion3858d ago

I would be very surprised if MS didn't have a price drop to go along with Halo 3, that would pretty much seal the deal and easly get Halo 3 to surpass Halo 2 in sales.

Followed by GTA4, Mass Effect, Too Human, AND lost Oddessy i think its going to be a sweet fall.

calderra3858d ago

Halo 2 cleared $125 million in its first day.
This estimate may be conservative, indeed. It'll be interesting to see how this all pans out, what with Halo not having an extra push from the ramp up to Christmas, and with everyone questioning hardware sales.

Halo 2 also came out after Xbox was well-established, and having already had Halo on the same console. There's a whole extra level to considering how it will do now that a lot of people will be thinking about the relatively quick change between consoles, especially when Halo 2 is still supported on original Xbox.

Interesting indeed. A lot of analysts are going to get very rich on this one.

closedxxx3858d ago

It's true that HALO 3 will not be arriving during the Holiday blitz, BUT, I believe it is arriving at an even BETTER time... At least from a gamer's standpoint. We all know that video games suffer a "summer drought" if you will. And with all the kiddies working their summer jobs, this will be just one of the many things that they will be throwing their hard-earned money at with so little in the industry competing for their cash.

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