According to Next-Gen, Microsoft's Xbox 360 division has lost $1.26-billion in fiscal 2006. What are your thoughts?
During the 3 months prior to March 2006, Microsoft as a company made over $10Billion in profits. The game division is expensive, sure, but it barely makes a dent in the overall picture. By the time of launch, Sony will have invested on the order of $2B on the PS3, counting all aspects. Sony's ENTIRE company (all divisions) only makes about $1.5B in profit per YEAR. So with this loss (which is smaller than PS3's initial investment- not even looking another year down the road), Microsoft is making money at about 3x the rate Sony is. Geeze, how will they survive?
Waite until we see Sony's ps3 losses...
The costs on the PS3 might well be alot higher.. However, I'm not sure that they plan on shipping as many units over 2007, which might help ofset the loses a bit more. I feel that they'll sell more so from 2007 Xmas, at still a loss, while the 360 will prob be on profit by then.. All interesting stuff though, I wish I had a slice of that pie though.. lol
MS will turn a profit sometime near the end of 2007 i reckon. But haha the PS3 will not make a profit until at least 2008 unlike Nintendo who will make a profit at the start of the Next generation Consoles, which is the Nitnedo Wii.
Because the Wii is over priced for what it is. i wont be paying $250 for a machine thats barely as powerful as and xbox that can only do 480p. Probably cost them less than $100 to produce.
It's time to buy stock in Nintendo.
This isn't my department so I could careless! I mean of course it's a bad thing to lose money but in this generation it's going to take money to make it! The real question should be how much money MS made in software and service sales, but then again im a gamer and all I need to worry about are the games and that's it!
MS and Bill have pockets deep enough and earning needs investments first. I think I read somewhere Bill said he reserved 20 Billion for the XBOX brand to succeed. So they're not even on 10% of that budget. The fiscal year of 2008 (starts on July 2007) will show positive earnings on 360 they already stated. Business model is healthy! Unlike that of the PS3. Every 10 million units Sony lose 3 Billion freaking dollars. With the low number of real need to get exclusives (only Resistance is named by many game reviewing sites) I bet they can't make up any real earnings, the network is free (well I bet they'll charge you on variable basis, but well). MS is doing just fine. And it's good to see they invest so much on the concept. That is a good thing (if a company has the money though)
Sony is already in trouble with debt. PS3 will lose alot more money and might kill the Sony Brand. There will not be a PS4. 5-7 years from now....A New Xbox....A New Nintendo.....and maybe a Dreamcast 2??? wishful thinking!
One can only wish. I just played code veronica on my dreamcast a few day's ago and the wacky races video game, god I love that game.
Sad when you think about it but the more Sony fans that purchase the PS3 will put it more and more in the hole! There's got to be more to it though so im assuming Bluray will be the savior for Sony if it succeeds and the death if it doesnt!
microsoft will generate billions of dollars from Windows Vista. they can use that profit to spend on xbox brand sony and nintendo envies microsoft's money, microsoft envies sony and nintendo's market shares... just neutral point of view lol
this is Microsoft so why is everybody talking about sony whats wrong with you people the lames on this website make me sick goodbye.
Maybe because this gen, Sony and MS are direct competitors and Wii just has another niche market? So it's important how they invest and gain profit. Or not. So it's good to discuss about. If you can't take it, don't read it
Hey, MART, you're stealing my argument about how Nintendo's business model can't fail this generation.
you never make money on the launch of a console unless your nintendo because thats their strategy to make money in the now and not later.
Microsoft is a company with, basically, an infanate amount of money at there disposal so as far as Im conserned they'll keep on shoving money into the Xbox brand no matter what happens. Which is of course a good thing.
Who cares how much money MS are losing and the same goes for Sony and Ninty! They are all massive companies with huge wealth and he ability to borrow money at any time if needed which it will probably not be! None of these companies are gonna be driven into stopping trading because of their consoles! Just enjoy the games, leave the accounting to the accountants!
I don't really see the point of this gamingwise. So Microsoft has lost around 4.5 billion on the xbox. That won't make Halo 3 any less fun. Sony will lose money this time around because of the massive hardware expenses they're willing to incur, but the Playstation brand is strong enough to build up enough of a fanbase to make profits eventually this generation, and I think the same will go for the 360 eventually.
yea i agree. the company losing money it wont make the games any less fun.
"and I think the same will go for the 360 eventually." Is a strange statement, when they already see on base of sales and average attach rate on games and accesoires that it will be profitable in the fiscal year of 2008, starting at July 2007. It's better to turn it the other way around: maybe the same will go for the PS3 eventually. The biggest question marks are on that console, because of a few things: 1. Bigger loss per PS3 console (300 dollars compared to MS 150 to 175) 2. Later production cost reduction, 360 CPU die will be on new/smaller base soon, Cell needs first to be produced for a year/some years to get there. Less loss for MS, same big loss for Sony for some time on every unit 3. Sony doesn't have any money too loose, for years already writing red instead of black marks, just took multimillion bank loan. MS has billions to burn and still feel nothing at all 4. Attach rate last gen: Gamecube/PS2 1.9 game per console. XBOX 2.4 game per unit sold. This gen: 360 4.5 game attach rate per unit, hardware (last I read) 3 per unit. 5. Number of available exclusive games out of own software studio (Microsoft Game Studios or Sony's equivalent). MS has more out and more that the gamers want. Resistance is the only game that one would really buy a PS3 for at this time. And that's not enough 6. Total businessmodel of MS is more viable. With the paid premium Live service. MS gives you what you pay for. Sony let you pay for potential, but is it used & their own push format that isn't nescessary (expensive Sony formats always fail, Betamax, UMD, Minidisc for example) 7. MS has and will have the larger fanbase for a long time. More profit for game developers, they'll choose 360 above others sooner. 10 million customers ahead of the other consoles is a lot, a lot especially when you know they spend, Sony's/Nintendo's customers spend less (younger probably, less -pocket- money). Especially the good programming environment for the 360 puts PS3 with 5 x the developping costs in a very, very bad position. 8. That all working through already, like COD3 better on 360, Face mapping in Rainbox Six on 360 not on PS3, online stuff in for example Tony Hawk and other titles on 360 not on PS3. That'll happen more often
MART, wtf is your problem? I just tried to say that a loss leading strategy can turn a profit if a large enough fanbase is made, and that even if the company sells at a loss that it doesn't make the games any less fun. I don't understand what your point in disagreeing with me is. 1. See my points above on why I don't care. 2. The ps3 will see similar price reduction oppurtunities before too long. It's taken the 360 over a year to get smaller dies, and I just read an article about reducing the die on the Cell processor. BOTH consoles will find ways to reduce costs fairly soon. Also, the main thing driving up the price of the ps3 above the 360 is the blue laser diode. Fortunately, as production increases costs will go down. The dvd player in the original ps2 made it a loss leader at launch, but now dvd drives are cheap as hell to make. This also applies to MS's HDDVD drive. As more and more drives are made the price to manufacture drops significantly. 3. I have no idea where you get this impression that Sony is on the verge of imminent collapse from. Sony Corporation is very large as well. I haven't seen them fail to turn a profit in any past years, so where are all those red marks you talk about coming from? They've had a lot of trouble recently with that big battery recall, but stuff like that doesn't just destroy large companies. Sony has plenty of money to invest in its games division, and if it means seeing profits elsewhere due to increased bluray sales and adoption, and furthering hd tvs sales then they'll willingly do it. It must be nice to be Microsoft and have billions of dollars from monopolizing the operating system market, but there is no company that can just continuously throw away billions of dollars with no cares. 4. First off, I'd like to see the numbers for the 4.5 attach rate, I've heard that before and I'm a little wary of the idea that the average consumer buying almost 5 games at launch. I suspect some of those might be arcade titles, which would be fairly deceiving. Anyways, think about this. Sony makes some money on every ps3 game sold, and ever ps2 game sold. They also make some money on every bluray disc sold. Microsoft's original xbox sales have dried up and they don't make an extra profit on the sale of their games because they don't own that medium. 5. Sony will have plenty of software at launch and in the future. Most games are multiplatform anyways. Also, Resistance looks like it will be better than any 360 launch game. Next year will see many more of the ps3 exclusives that people will want to play like MGS4, FFXIII, and Devil May Cry 4. I know I'm looking forward to those games more than Gears or Too Human, or just about anything the 360 has to offer. That's just my personal preference however, so I can't speak for all gamers. However, your assertion that 360 has all of the games that people want to play is just an assertion that you've made. Trying to play your opinion off as a universal fact is a very poor argument. 6. I don't know why you're trying to say that having to pay for online multiplayer is a good thing. Maybe it's nice for Microsoft to be able to shake money out of players on a steady yearly basis, but I think that sucks total @ss. I greatly prefer an online service where I can still play without having to pay. You should have to pay for extra things like downloadable content and episodic content, not basic multiplayer. So personally, I prefer Sony's online business model from a gaming standpoint. Hopefully it can live up to its potential. Anyways, your argument that paying for potential is a bad thing is dumb. When people bought the original xbox back in 2001 what do you think they were paying for? Potential. Whenever you buy a new system you pay for potential. The ps3 has a lot of potential, and that's a pretty good thing. We'll see next year if it has started to live up to its potential. 7. ?????? Microsoft has a larger fanbase? Sony's last two consoles have sold over 100 million each. That's an enormous fanbase. Ok, so maybe you're saying that Microsoft has sold more this generation. Well no sh1t sherlock, they had a one year head start! The ps3 will sell out this Christmas and well into next year. The ps3 will sell at a faster rate than the 360 did its first year and will most likely eventually overtake the 360 in a few years. I can't really say anything about your assertion that playstation and wii owners will be poorer than 360 owners except that it's crazy. By virtue of the fact that they paid at least half a grand for the ps3, I'll venture that they have some source of income. The ps3 is 5x more difficult to program for than the 360? I thought that random statement you're quoting said that dual core processors were two to three times more difficult to program for than single core processors, and that the cell was more difficult than that, not that the ps3 was 5x more difficult than the 360's tricore processor. Mischaracterizing someone else's information is not the best way to construct a convincing argument. 8. Ever think about this one? They've obviously been working on the 360 versions of these games for longer amounts of time and it's a console that developers have had an extra year to work with. Doesn't logic lead to that conclusion that early games will be able to utilize the 360 hardware better? Doesn't logic also lead to the conclusion that as the ps3 hardware becomes more familiar with developers that the games will increase to levels comparable or even superior to the 360? I guess the proof's in the pudding. Developers who put in the time and have the experience will make games on the ps3 that will match or outmatch the 360's games. Just look at Oblivion, nba 2k7, Fight Night, Virtua Tennis, and the others. I'm really sorry for myself that I ended getting distracted from football to have to type up a response that I didn't think was necessary. We could bicker back and forth about business strategies and other crap like that or we could just agree on what I wanted to say in the first place. A loss leading strategy can be a viable one and furthermore, profits and losses don't distract from the quality of games. Godd@ammit, MART, can't you go one article without bashing sony for no reason.
And they lost that much already? This doesn't even take into account how much they lost in 2005 from the 360 launch. And if you think Microsoft Corporation or its investors are going to let the Xbox Division blow through $8~10 billion (they're over $5 Billion in debt right now), you might need some business courses. Sony stands to lose a lot of money their first year in business, but the difference with them is that the Playstation Division has been extremely profitable for like 10 years; Sony can easily afford to lose a little short-term cash for additional long-term profits. It only took a little over a year before the PS2, a very expensive machine (nearly $500 to manufacture originally), became profitable so there's no reason to believe otherwise with the PS3.
good luck with that, sony will lose money till the end of 2007.
Great DJ. But so untrue. How profitable is the PS2 exactly? And was over it's 6 years lifespan? Sony is losing money already for years and just took a bank loan. No shares given out because they are almost a junk bond, a bank loan mostly only is the possibility and takes up a lot of rent. It doesn't really matter what MS lost already. Point is that Bill says he will max spend 20 Billion. You know who's MS biggest share holders are? So yup, MS corp will invest, because they know this will bring cash. They know it that certain, that it will from the fiscal year 2008 on, starting from July 2007. That's less then a year. "there's no reason to believe otherwise with the PS3." Oh yes DJ there are. Read my post above and answer those ones! And then more easy for you: PS3 loosing 3 Billion dollars every 10 million units sold. 3 Billion freaking dollars. If they won't sell the games they have a problem. And they need to sell A LOT of games per unit to get that unit profitable. Like at least 10 to 15 or so. So start calculating! And then read and answer my post above
2 post in and this becomes a Negative Sony/PS3 thread...rolls eyes!!