Microsoft says it will stick with its Xbox business come hell or high water. But with years of heavy losses behind it the time has arrived to turn a profit. Has it all been worth the effort and how can the company turn its hard won market share gains into actual profits?
Earlier this week, an interview with Microsoft COO Kevin Turner affirmed that Microsoft is willing to stay the course with its videogame business, despite the fact that it hasn't been profitable on an annual basis since the original Xbox launched in 2001.
For some, the reaction to the interview was surely, "'Duh.' Of course Microsoft plans to stick with the Xbox business." That reaction stems from the fact that it's easy to see Microsoft's successes as the lone next generation console on the market. The games library is good, upcoming titles are looking great, Xbox Live is a robust service with many appealing features and Microsoft is insistent that it will move 10 million hardware units by the end of the year.
But all of these successes and admirable plans have come at great expense-greater than Microsoft had expected initially. For fiscal year 2005, Microsoft's home and entertainment division posted a $485 million net loss.
After its third fiscal quarter ended March 31, 2006, when Microsoft posted a $388 million operating loss for its home and entertainment division, Microsoft CEO Steve Ballmer issued an internal e-mail that stated, "…The cost of producing Xbox 360 consoles was higher than expected..."
In fiscal 2006, ended June 30, 2006, the division lost $1.26 billion, mainly due to Xbox 360 launch expenses.
Of course, these losses represent investment-heavy investment that Microsoft hopes to turn into profits by fiscal 2008, the target date that Robbie Bach said the home and entertainment division would turn a profit.
The question is, how much loss is too much? Microsoft's resources for supporting the Xbox 360 business seem unlimited, as other profitable divisions rake in the dough. But would it take for Microsoft to throw in the towel?...more at next-gen.biz...
Salman from Tech4Gamers writes "Mortal Kombat 9 revived the series from a low point after bringing it back to 2D combat. It marked a new high-point for the franchise due to its incredible roster, exciting cinematic story mode, and high-octane combat."
Shaolin Monks is a forgotten gem. I would love to see a new one, or a remake of the old.
That game was actually goated. It was the first time ever that I actually tried to get good at a fighting game. Unfortunately the online connection was so dogshit it made it hard to enjoy and eventually I gave up. Haven't really played much fighting games since.
Microsoft has slashed the prices of games across the Xbox 360 store in preparation for its July 29th closure.
The Dishwasher
Vigilante 8
Two non-BC and no-PC-version Arcade titles I downloaded recently. Dishwasher's sequel is on Steam at least.
I've also downloaded Ninety-Nine Nights II (shame the first wasn't available). I still want to download Burnout 3: Takedown before the weekend's up, though that is still the full $9.99 non-discounted price
Burnout 3 not available in modern times is a crime to humanity.
I know it’s probably due to the music licensing-though they can simply add other music as Burnout 3’s biggest flaw to me personally-is the music!!!
The Xbox 360 Marketplace is officially shutting down in three days, which means dozens of exclusive, digital-only 360 games will no longer be available to purchase anywhere else once it does.
The Xbox 360 will be almost 20 years old next year, and to celebrate this milestone Microsoft have decided to obliterate all of its online functionality.
Replies(7)
Technically, the games ARE preserved... they are just removing the ability to purchase new games through the 360. They have to keep a full backup of every title (even delisted ones) because they will have to offer the ability to redownload purchased content to users.
I had deleted some games a few years back that had become delisted. I was able to get them back by going through my download history. The games in question were TMNT (classic and re-shelled), afterburner climax and outrun online. Im glad I was able to get those back as they are some of the best on the service.
Well The Ultimate Alliance games have been delisted. I dunno how many old Activision games have been Delisted but MS needs to remake or remaster old Activision games and release them on Xbox and PS. I. Hope that's what they're doing right now.
They can't reserve everything but they 100% can reserve what they got or own.
Fortunately, the X360 was jailbroken a long time ago, so a good part of its library is available for download from 'alternative' sources. Still, it's a bummer to see the store going away.
Dawn of The First Day
-72 Hours Remain-
Also they can keep the store up for life if they wanted.
Series X for the back compat titles, and OG Xbox and X360 for those not on BC. I pretty much bought all of the digital games I want for the 360 so I am good.
No, not telling you would be sleazy. I have a few more games to buy then I'm good. 360 was and still is a great console. Xbox is the best place to play!
“It's very hard to calculate the worth of a defensive business. I personally think Sony will have a really hard time with the PS3—fewer games at launch, $200 price premium, and yet they're losing more money per console than Microsoft is on the 360. More long-term, imagine no PlayStation 4 and how Microsoft might profit from such an environment.”
Yup it really could happen. PS3 failing like the mighty Nintendo once fell hard. And no PS4. Although I won't wish it. Competition is good. But I truly believe the PS3 will fall so freaking hard. Especially this Christmas when fanboys will say: "Damn here I have Killzone 2/3 CGI stuff but then ingame in Gears of War on this demopod... Why wait any longer? Let's buy the 360 with Gears and a couple of other games!"
I really see that happening, especially here in Europe. Ppl hate Sony for pushing it back to spring 2007
If they do not reach 20 million consols sold ver a 5 year span.
"Microsoft is willing to stay the course with its videogame business, despite the fact that it hasn’t been profitable on an annual basis since the original Xbox launched in 2001"
- That's just plain funny. But from a business point of view, thats REALLY bad business. The only damper to that statement is the fact that it's Moneypots Microsoft behind it so they don't care if they lose some money since they already have loads. Any other company would think, hmm, we've lost loads of money on this. Lets stop.
"Microsoft is insistent that it will move 10 million hardware units by the end of the year"
Ahaha, dream on. But they are refering to SHIPPING 10 million units, not selling. Shipping 10 million is of course possible. But if they think they're gonna sell 10 million consoles by the end of the year, FAT CHANCE. Its already taken them nearly a year to sell 5-6 million consoles. And with the Wii and PS3 launching in a few weeks, they think they are gonna crank up 5 million more sales by the end of the year?
Microsoft had a whole year to themselves and only sold 5-6 million consoles. They're never gonna reach 10 million consoles by the end of the year when they have competition
The only (possible) negative stories they can muster seems to be about MS's profits which happens to blow Sony's profits (on a whole) out of the water.
hey im not a fanboy cuz i dont buy games i just rent them ... but i see MS spending alot of $$ just to stay on the race ... they have billions to spend ... is true they havent even see any plus signs yet... i do think that even tho sony is shipping few consoles in a year they will sell more ...actually PS3 will be sold out for a year long since everybody will buy that thing