Microsoft E&D Q3 Losses Fall to $315M, Sales Down To $929M

Gamasutra reports that Microsoft has released its third quarter results, showing the company's Xbox-encompassing Entertainment and Devices division posting a $315 million loss and sales slipping 21 percent to $929 million, as the overall company saw $4.93 billion in profits and $14.40 billion in sales.

The $315 million loss is down 22 percent from last year's $402 million, and came as the quarter saw $929 million in sales, down 21 percent over last year's $1.18 billion.

Microsoft says the drop in sales came primarily because of decreases in the sale of Xbox 360s. During the quarter, the company shipped a half million consoles, as compared to 1.7 in the third quarter of 2006, that being the first full quarter in which Xbox 360s became available.

[ITR]

I know the 360 was a hard sell at Target(around Nov). We ended up doing a $50 giftcard with it.
We did a $25 giftcard with the PSP.

[HaKeRsCanRotINHEL]

more money than Sony's got! HAHA J?K ]:~)>

vvvvv LOOK-OUT, Kyur4ThePain just started his menstrual cycle. ;B vvvvvv

[Kyur4ThePain]

a moron (in my personal opinion) for posting that sh!t.

[gta_cb]

@ Kyur4ThePain

well i spose hes just a fanboy? everyone is getting to competitive lately...

[NikV3]

sony stock is highest its been in five years, so im sure your a little off here

[fenderputty]

Here we go again.

[BIadestarX]

"Quarterly losses were blamed on expenses related to the launch of Microsoft's Zune media player, as well as expenses from a lengthening of the Xbox 360's warranty period."

"Looking forward to the full fiscal 2007 year, Microsoft has said it expects increased sales due to the increased availability of Xbox 360 over the year, as well as sales of its Zune."

$4.93 BILLION overall profit, that's a lot of money. No wonder microsoft does not mind investing the amount of money they have on the Zune and the XBox if is going to bring additional revenue streams.

[XxZxX]

they have to investing in XBOX. If they don't, their PC gaming is slipping away. Bring in xbox in actually revive PC gaming too.

[Firewire]

"Xbox-encompassing Entertainment and Devices division posting a $315 million loss and sales slipping 21 percent"

Now where are all the guys saying that finacial analyst was full of bull?
And he was a Sony fanboy, and the article was Sony propaganda?
And that MS makes money of the 360?
I don't give a crap what you guys think,
MS shareholders will not like that one bit!

[fenderputty]

Sony has posted losses yet the stock is just fine.

I just think it's funny how these articles go both ways. They just rotate days on here. One day PS3 is doomed the next it's the 360.

[BIadestarX]

Stick to your day job. You failed to see how to analize this data.
"The $315 million loss is down 22 percent from last year's $402 million" and what do you know about investing in other to know what investors will think.

Investors will see this, "$4.93 BILLION overall profit".
Investors will see that considering that fact regarless of the cost of introducing the Zune to the market + microsoft extended warranty the division only lost $315 million loss... And don't try to put these together, "$315 million loss and sales slipping 21 percent" since they may not be necesarily related. Remember that the "sales slipping 21 percent" is being compared to the quater that fall under the holidays... duhh... sales were up during christmass.

It depends how people look at it.
If you ask a sony fanboy, he will not see that loses are going down.
Don't worry you are up for a surprice whe Sony releases their numbers.

[HaKeRsCanRotINHEL]

Agreed! Silly isn't it.

[bigj]

If we are talking about overall losses Sony I know is in a deeper hole than Microsoft. Eventually Vista, Zune and Xbox 360 will pick up in sales. Once Halo, Bioshock, and of course Forza 2 comes out sales will skyrocket. I am really looking forward to Allpro football 2k8. There are magazine pics on this website if you havent seen them. It looks like it will be a Madden killer. I am glad 2k is back I am sick of madden. It has the worst gameplay for a football game . Anyways here is the link.

http://www.2ksports.com/for...

[Firewire]

Yeah, just what I though, the fanboy spin!
Wait till this & that bullcrap!

Bladestar: I am an investor, not in MS but I own allot of stock in several companies, don't try to spin that crap on me, I know exactly what MS shareholders will zero in on! A failing entertainment division!
The 360 isn't selling, isn't making money but loosing it! the Zune is garbage, and will never compete against the iPod, and failed mediocre products like the add-on HD-DVD player! God!
Plus take into effect MS's bread & butter "Vista" is a flop, no one wants it!
No one is supporting it, even Dell caved to customers, companies won't comit to it either!

"Microsoft says the drop in sales came primarily because of decreases in the sale of Xbox 360s. During the quarter, the company shipped a half million consoles, as compared to 1.7 in the third quarter of 2006, that being the first full quarter in which Xbox 360s became available.

Sales of Xbox and PC games decreased 44 percent over the company's first three quarters to $393 million, which the company puts hand in hand with the decrease in console sales."

I guarantee you heads will role at the next shareholders meeting!

[DG]

Since when is a stocks price dependent on a division of a company that encompasses %5 of the whole company and not the other %95 of the companies profit? Why do I even bother still reading these posts?

[BubblesDAVERAGE]

They are doing so good i wonder how they lost...I mean xbox is like the best system ever I personally dotn have a xbox but I want to play gears of war and.....gears of war and....gears of wa.....and gears of war..xbox is so great then it has upcomiing games like halo3 and...halo three and..then the third halo( Sarcasm aint it great)

[snoop_dizzle]

yeah there is other great games as well.

But anyways this will probably go back and forth. Sony was doing bad now Msoft is, sony wasn't doomed when they were doing bad and msoft isnt either.

[DG]

They lost because It took Half a Billion dollars to introduce the Zune to the market and the warranty extension cost about 300 Mil.

[MoonDust]

It's obviously doing good.

FIrewire, you don't know sh1t about investing. You probably don't know sh1t about FX, Options, ETF, hedge funds, shorting, double tops, head and shoulders, cup with handle, EPS, pennants, Elliott's wave theory, MACD , flags, or anything else i can spit at you from the top of my head. Stop the BS.

[i rule]

he trys to spin everything as negative for microsoft. and as for being an investor, i didnt know they let 12 year olds invest....you must save your milk money for a while little one.. besides you are sick and perverted for suggesing bill gates was going to "ass rape" my 7 month old daughter. grow the fuk up. ms will do fine in this biz because they have done it evrywere else. and before you say it yes firewire i am a fanboy, but your a pervert and which is worse??

[Firewire]

Just in case you would like to know, I'm 34 yrs old.
I don't have to work, because I know how to make money, and I invest alot.
I do have a finacial advisor, though wich helps!
Can you MoonDust say the same, do u work in a factory sucking off your
boss?
And Mr. i h8 sony trolls, I never said such a thing about you daughter,
wich you brought up in the conversation. When I said "baby wanna rattle"
I was reffering to u, for acting like a baby! For someone with a kid, you realy don't act mature. No parent with a decent mind would use their 7 yr old daughter to make fanboy comments against others, but you said "my 7 yr old daughter is smarter than all the Sony fans on this site"
Real classy! I think the both of you need to grow up, and try acting like adults!

[CrazzyMan]

if they still can`t make profit and sell more?

p.s. @MoonDust - Sony Stock Rises to Highest in Five Years.

[MoonDust]

because Jim Crammer was pushing the stock and hoping Sony would sell some of their lagging compartments. It also had a good profitable quarter sometime back. I'm not saying the SNE stock isn't a good stock, i do technical analysis so i couldn't care less about the company. From a technical point of view this company is in a great up trend and you never go against the trend. I get heated when people say they do stock and don't know squad about the stock market.

[MoonDust]

You are a 15yr old who doesn't know the difference between a Call and a Put, a Stop/limit order and who knows nothing about technical or fundamentals. 1 2 3 5 8 13 21 34 55 89 144

[NikV3]

they let this whole beating sony in a video game war get in the way of what makes there company on top, the share holders, and im sure they dont like that at all, just like them not liking the amount of money ms spend on advertising, more then they make of the damn games.

[IBLEEDBLU]

moondust funny how u completely advoid crazzymans post

sony si doing excellent - bravia is taking off with a storm and at the end of the year PS3 will dominate the retailers

MS knows this - look at all the msitakes they have done and trying to make up for them (talking about the elite)and they cant even do that rite - i just cant wait till u ppl buy the elite and u get the 3 red rings of death hahahaha

ive read that the shareholders of MS arent happy ones

like i said b4 the sooner MS becomes a software company (like sega) the better itll be for all of us

[MoonDust]

I responded before you even wrote this.
BTW: MSFT also hit new 5 year highs.

[snoop_dizzle]

so if you want the PS3 to really shine, you'll want the 360 to do good so it gives sony more incentive to be better. and vice versa.

[NikV3]

i agree with everything you said, ms should stick to software, they do it great, with the exception of vista, thats a real peice of sh*t. but sega is great, the dream cast graphics were better than the ps2 and better than most xbox games, if sony didnt completly destroy them more people would have seen this and sega would still be making great hardware.

[Wargasm]

I find the wording in this article pretty confusing..... Losses fall to $315 M?

wouldn't falling losses be a good thing? IDK

[NikV3]

vista = failure = loss of money = more people switching to linux this year then last 2 years put together

[MoonDust]

http://finance.yahoo.com/q/...

[Bill Gates]

Zune
Zune
Zune

Mazda commercial........

Zuuuuune!!

That thing sux ass!!!!

[Keyser]

Mazda is good though, I have one. Very fun to drive.

[Bill Gates]

Zune
Zune
Zune

Mazda commercial........

Zuuuuune!!

That thing sux ass!!!!

[Bathyj]

We all know M$ is filthy rich, and Bill Gates is the richest man, yada, yada, yada.

But I said this the other day. Even M$ has shareholders. Bill doesn't get 100% say in 100% of matters 100% of the time. Eventually someones going to say "Hey how come we keep tipping money in this hole, with no sign of a return?"

I mean does anyone actually believe they'll make a profit this Gen? And if they dont do it why would they next gen with more to be spent on R&D? It looks more and more like they never will unless they pull a Nintendo and sell a $200 machince for $300 and everyone buys it. But thats not there style. Bigger, more, better is the American way. No offense intended to any Americans here.

"Microsoft says the drop in sales came primarily because of decreases in the sale of Xbox 360s. During the quarter, the company shipped a half million consoles, as compared to 1.7 in the third quarter of 2006, that being the first full quarter in which Xbox 360s became available."

It seems they had their moment in the sun and enjoyed it, while they had no competition. Now there are 2 more players in the game its only going to be harder. As well as just not selling there are apparently supply problems. 500K units in 3 months? Didn't Sony ship 6 million in about 5 months? This elite thing cant be helping sales either. If people actually want it they will be holding off from buying until its released.

I know alot of you are just going to think I'm flaming but I'm not. Try and listen to the tone of what I've written. I'm actually concerned about where M$ is going in this industry because I've said it many times before, its better with them in it. How many more generations do you think we can see from M$ if things keep going like this? Certainly X360 must already be successful enough to encourage a 3rd attempt, even though I think they wont make money this time, but after that, if X720 doesn't turn a profit, will M$ and its shareholders keep funding Bills pet hobby? Its not enough to say the company still makes money we can afford to lose it. No company can continue to operate like that forever.

[Bathyj]

Another day, another cowardly Xbot strikes from the shadows and takes a bubble from me. Is there really anything in this post thats that upsetting?

I swear the way some of you carry on, its almost as if you want me to become a fanboy like you and just argue and name call all the time, rather than try to have a civil discussion, and maybe offer food for thought.

Then again I did impersonate God and imply Mart masturbates, (not in the same post) so maybe I lost a bubble for that.

[TylerDurden]

And I see where you are coming from. However I highly doubt MS shareholders are too worried. Why do I say that? Because I am one and I live in an area where many around me are shareholders as well.

Consider that profits for this quarter were 4.9 billion so 220 million is hardly a blip on the radar. Even at a loss there are a lot of positives that the 360 is providing MSFT right now:
- Combating Sony running Linux in the living room. If the Xbox helps protect Windows market/mind share than believe me as an investor, we see the benefit
- Provides potential for future growth in Digital Distribution and IPTV as well as gaming. As an investor I see great Windows/Office sales quarter after quarter. However great Windows/Office sales are factored into the stock price so having great sales in these products has hardly any impact on the stock price. As an investor I would ask MSFT how do they play to grow their value as a company beyond Windows/Office
- The cool factor. Granted there are a lot of people who hate MS and the Xbox. However there are more and more people everyday becoming huge fans of the Xbox. The happiness with the Xbox is increasing the value in the MSFT brand that may spill over into other products. When was the last time anyone got excited over a new version of Windows or Office? When was the last time MSFT was considered an underdog in any field? You know people love to root for the underdog.

[timmyp53]

vista will start to sell ... these news stories are flamey but... hey it still news

[Evoluti0n]

need look no further.

http://finance.yahoo.com/q/...

That's MSOFT vs. SNE and who's is trending better?

Exactly.

[FFVIIFan]

It just goes to show the giant MS is to loose so much money from its game division and still make a profit in the billions. At least the money they're spending is on a quality console with more great games coming out. No other company could afford to do what MS is doing. (I.E. actually making a console to compete with the once godly Sony)

[NikV3]

ms is the only company that can compete with sony, but in the long run you know sony has to have some huge plan and will eventually just say, yeah, once again, we're on top, and when it happens, i doubt the majority of people will even be surprised.

[Boink]

so why are people not comparing this to how sony did? then keep flaming each other.

and as far as the 360 goes, shareholders will not say much, as they stated on launch that their plan is to start turning profits on it in 2008, so it is as was expected.

shareholders will see their dividend on the 4 billion the company made as a whole, and won't care about much else...

[FeralPhoenix]

Its really simple M$ sold less consoles than they did in the 3rd qtr of 2006, so obviously they made less money....thats no surprise, and the fact is all companies sales fluctuate from qtr to qtr, especially heading into the holidays with the biggest profits coming over the holidays...yeah as an investor you always want to see everything go up, but you also realize that when you invest in a company then you know there will be ups and downs....and the bottom line is Bill Gates & company made 4.93 billion in profits. -The 360 is doing alot better than the xbox did so I would say its far from being in trouble unless sales seriously fall well behind their competitors....and IMO, from what I see thats highly unlikely.

[Evoluti0n]

that's what I'm here for.

[EZCheez]

I think i'm going to just stay away from this topic. Some of you guys make this WAY too personal and take this stuff WAY too seriously. I like poking fun just as much as the next guy, but sometimes these comments are crazy. Kind of keeps me from wanting to post anything for fear that I might make someone hang themself after reading the dumb posts I make. Lighten up!

[Icryo]

I think Microsoft shipped less consoles this quarter because of all those defective ones they had to repair, or keep having to repair. Just a theory though. Because demand for 360 is still there, so they shouldn't be cutting down on shipments, especially this summer, as there are a suprising amount of good games coming out for the system.

[DJ]

retailers are overflowing with Xbox consoles. I think at the end of Dec. 2006 there were nearly 2 million 360 consoles sitting on shelves and in back rooms. Retailers don't want any more until they can sell what they purchased from Microsoft.

[Keyser]

They may have had some losses but I hope they stay in the game. They don't have to dominate but at least being competive forces Sony to innovate. Sony is very good at innovating but sometimes needs a kick in the pants to keep them going. MS gave them that kick in the pants.

Sony wasn't feelingmuch competition and really started to slack off with some crappy games but they have now invested money in there own gmaing development team and decided to lead the way as a game developer instead of relying on others like EA. MS helped them to do this by being competitive.

I don't want to see the innovation leave so I hope its a tie and they both sell well donw to the last penny so next generation (when I'm in my 30's) I'll be seeing games even more beyond belief.