Microsoft: Xbox Made More Money Than Sony And Nintendo

Speaking to investors, Microsoft's president of the Entertainment and Devices division, did his utmost to step through the minefield that has been repair costs for the Xbox 360 and the division's lack of profitability. In doing so, Bach makes claim to Xbox 360 making more money than it's competitors.

"If you think about consumer spending on the platform, compare since the launch of the Wii and the PlayStation 3 to date, so a little over, what, seven or eight months, people have spent $2.6 billion in the U.S. on Xbox 360 all up during that period. That's almost double what they spent on either the Wii or PlayStation 3."

[Xeoset]

Well, this is going to turn into a $417fest. But the fact is, you can't argue facts, the Xbox 360's attach rate is 6.1, a world record.

Great Job Microsoft.

[DJ]

a high attach rate typically means that sales of hardware/software are stagnating since there aren't enough new adopters to offset that number back to 0. The Wii has a smaller attach rate than the 360, mainly because it's selling exponentially faster. Even the PS2 has a fairly low attach rate since so many new people are buying the system each month; for about a year it was outselling the 360 in both software and hardware sales, yet still had a smaller attach rate.

Goes to show that corporate rhetoric should never be accepted at face value. Microsoft is using ignorance to paint their dwindling sales in a positive light.

[Master of Menace]

And once you buy the fans to keep it cool, the HD-DVD hard drive, the battery packs, and the face plates to make it look even remotely cool, you get a really high attach rate for accessories. Hey, you nearly have a working console like a PS3!

[devi8i]

DJ - normally I would completely agree with you; however, as the popularity of used game purchases increases, as is evident by the substantial growth of Gamestops, and the increase of used games as product share in such retailers as Circuit City and other big-box stores. Used games do not count in the attach rate figure. Also, with the popularity of rental services I believe a large number of consumers are moving to the model of try before you buy, and then buy used. Rentals, downloadable games, and used games are diluting the waters of attach rates and changing the gamer paradigm in such a way as to almost nullify the usefulness of an attach rate number. Furthermore; there are three major distinctions between the 3 nextgen products. The 360 is a known commodity with a loyal fanbase and a mature catalog of games. You know what you are getting. The PS3 lacks a substantial catalog of games, which is reflective of its current sales, and thus makes it very hard to have a high attach rate. The Wii has a nice library, yet the spotty quality of some of its games and the very niche marketability of some of its titles is creating a very small attach rate. Most non-hardcore-gamers whom purchase the Wii do so for one or two particular games that they have either seen on tv or played at a friend's house. The different games are becoming system sellers to lots of small demographics of consumers. The be-anything nature of the Wii is driving sales not through the hardware but through the software.

All of this combined makes comparing attach rates as a meaningful indicator across the separate brands nearly moot.

[Thugbot187]

Last generation we didn’t see high attach rates from the PS2 base for several reasons.
The first being that piracy and mod chips were all over and there wasn’t anything Sony could do to prevent this. It got to the point where there was no need to buy a PS2 game because you can get it Bootlegged for 3 bucks. This time round Microsoft has been able to keep piracy down significantly, which is also a reason for the higher attach rates. So looking at that you can see old attach rate numbers don’t matter because times have changed. The next thing is that some percentage not factored in the total amount of PS2’s sold were people replacing their broken PS2’s. As you can see Microsoft while I’m sure the defect rate of the 360 is much higher than that of the PS2 has not been able to get away with this; note the 3 year warranty.

Microsoft sales can’t be too stagnating because they have been outselling the PS3 on a weekly basis up until the price drop by the PS3. So for your theory to hold true that would mean the PS3 would be abysmally stagnating so their attach rate should be extremely high; and it’s not so I’m going to have to dismiss your claims.

[Funky Town_TX]

You are paraphrasing a post from last year about high attach rates. You can spin it all you want. I rather have a high attach rate and several games that hit the 1 million mark than a low one. Money is made on software and accessories. Just say you hate Xbox and M$ so any news about them is bad news in your eyes.

[cdzie1]

The simple fact is Xbox is #1 right now when you combine system and game sales.

Coming soon: $50 price cut, Bioshock, 60FPS Madden 08, Halo 3, GTA4 - It's only going to get bigger...

[BubblesDAVERAGE]

You guys really cant be this delusional....lol..they havent even sold 3 million since december..of last year i dont know why you guys think MS is so great ...personally i think it was just the first one out the gate and people just bought it to bide the time because ever since the other system cam out there sales have been very slow...maybe after the holiday season we will see

[Double-Edged]

because of you.
I'm broke.
I've missed hours of sleep.
I've missed meals.
I've gained 10 pounds sitting and playing.
I've started to be an achievment whore
I've cut-back on friday nights (sometimes)
oh yes.... I'm broke..

because of all your games and the rest of 2007.
I wont be able to buy a PS3 till......... 2009.

[devi8i]

can someone disagree with the comment by Double-edge? Do you know something about his finances that he doesn't?????

[Azures]

@2

I think between all that plus 360s manufacturing problems, holiday season, TONS of AAA titles releasing on PS3 and Wii in the next couple months...

it might actually be in trouble for future sales.

You said it yourself, the only game on there with exclusivity worth buying (to some people) is Halo 3. GTA4 and Madden are multi and many PCs can play Bioshock no problem. Halo is the only console mover they've got this holiday, Mass Effect and Bioshock while good are not gonna specifically sell consoles.

[GMR_PR]

that you like better PS3 over Xbox 360 and you have a biased opinion?

And i think Mass Effect and Bioshock will move consoles and don't forget the monster that is H3.

The same goes for Lair, Havenly Sword and Uncharted...

I would say that both consoles will have a solid holiday season. What's going to be the difference is the price cut on both of the consoles.

PS. sorry for my english

[Azures]

The issue I was trying to explain is that Bioshock and Mass Effect will be availiable on PC also. Many people won't want to buy a $400 system when they can just play those games on something they could already own.

Uncharted, Rachet, Lair, and HS are all exclusive.

[dale1]

worldwide sales is what you want not back yard figures then your talking see what happens in a year from now, theres competion

[Master of Menace]

It's breaking records, while it's breaking. Amazing. Do they really think 2008 is going to be better? It really can't get much worse I suppose.

[BIadestarX]

The reality is that the xbox 360 it's indeed capable of making lots of profits. For some strange reason software attach rate is great, and unlike Sony, XBox live has a premium service that brings revenue which can only be good for investors... specially when people paying for the service don't mind doing so.

Microsoft and xbox haters are quick to point hardware issues, xbox 360 not having HD drive built in, no price drop and all the other negative things they can come up with... (with some may be true)... they don't seem to be doing that bad... Microsoft already proved that the xbox brand is profitable... that 3rd party developers love it... and the consumer love buying games for the system. Now all the need to do is, fix the hardware issues... and keep bringing the games...

As Master of Menace said ^^^.... the fact that the xbox 360 is breaking records during so much negative press and issues is, "Amazing"... It shouldnt be that hard to take it from here.

[Master of Menace]

People are crazy if they buy a 360 before the new motherboard is installed. And Microsoft are crazy to keep plugging a defective machine. They are only hurting themselves long term.

[Azures]

Microsoft is doing as well it has mainly because it was playing basketball while Sony and Nintendo were in the locker room getting changed. Their AAA titles are coming fast and hard this holiday, so we'll see if Microsoft can really handle the old school.

[DJ]

that means that there are still 40 million Xbox and Xbox 360 owners that aren't paying for downloadable content because they have no way of accessing online multiplayer. It's far more profitable to let all users in for free, and then let them buy what they want.

[Balance]

you know MS said this at their e3 conference but everyone on this site obviously dismissed it as (ms spouting numbers). this is not new info if you actually watched and listened to their e3 conference.

[Rooted_Dust]

I wonder if they included the cost of 2 years of Live memberships and all those micro-transactions?

[devi8i]

I love my 360 but the thing that bothers me most is the live subscription. Paying to play games online (except MMOs) is ridiculous especially when MS wants to own the digital distribution and media hub space. We have to pay an additional yearly fee to play games online on non-dedicated servers (ie hosted by our own boxes) AND we still get served up advertisements on the dashboard.

[HeavyweightInTheGame]

Good job Microsoft.

[PS360WII]

Sure the xbox can make money I just found it funny that they can say it's profitable if you just forget that minus sign in the chart

[rusgreim]

Console sales are frankly, irrelevant. The important number to watch is attach rate and software sales.

LOTS of consumers are buying the PS3 as a Blu-ray player which is great for the Sony Blu-ray division, and a poison pill to the gaming division because Sony, and Microsoft as well, LOSE money on the console to make it up on game licensing.

You Sony folks can run around screaming about console sales after the fake price drop, but the truth is that its not good news unless it spurs a boost in games, accessories, and other content.

[devi8i]

How can you say console sales are irrelevant? Nintendo makes profit on every console they sale, hand-held or otherwise; thus, console sales to Nintendo equals profits. For MS and Sony consoles sales means a loss per unit sold until a few revisions down the road, and if they do not sell enough consoles then the hardware will remain a loss for them. If they do not sell enough consoles they will not sell enough software and therefore their loss-leader strategy will fail. If hardware sales really were irrelevant then Sony, and Nintendo would just close their hardware divisions and write software only.

[Shadow Flare]

xbox 360 games sell. Thats why exclusives go multi-platform yaddy yaddy yadda. But when talking about business profit, you have to look at the whole picture and the xbox and xbox 360 hasn't made a penny of profit since it started. In fact combined, xbox and xbox 360 has cost MS something like $4 billion or something, maybe higher. The fact of the matter and a fact that can't be disagreed with is: that is crap business.

Had it not been for the $2 billion repair cost for the 360, it could've been going somewhere. The 360's got levels of success in it. But just when they looked like they were gonna break even, they tank again.

Consumers spent $2.6 billion on the 360. That's great, that's good business. Aaaand then they compared it to ps3 and wii. Man, when your system is released a YEAR earlier, there is more stuff TO buy. More games, more stuff online and a larger user base...but at the end of the day, the xbox brand has never made a profit, and that's what matters most

[omansteveo]

Matters to who? not the consumer whether they make a profit or not I get Halo 3 in Sept. and a slew of games that i cant get on other systems which makes th xbox my choice whether or not their division makes money isnt my problem bc i still get my games and great gameing expreience.

[Shadow Flare]

YOU

Look i get that you got Halo and whatever. I got the halo experience too, it was great. What im saying is that investors and MS must be looking at this and thinking 'i know we're rich but this is costing us billions of dollars and we aren't making any money on this'. In the long run, a wise business move would be to, ya know, pull the plug on the xbox franchise and stop losing money. Thats why it matters to you

But i dunno, MS obviously thinks they can win, thinks they can make money on the brand so they can try and sort it out. You know dreamcast brought gamers some great gaming experiences...and where's it now? Microsoft is different but if they continue losing billions then yes it will effect you, the gamer

[THAMMER1]

I see allot of Sony fans in here calling people delusional and sick. The thing is guys Sony fans are the only ones who seem to have a problem with what they see, hear and read.

Sony Trolls again your are completely transparent in your efforts to bash and hate. Just because you guys can group up on this site does not mean your opinions or true or a reflection of the rest of the games community. Please take a minute to read your own comments and self reflect.

[DaEnforcer]

Excuse me, last time I checked MS game division lost billions. They lost billions in the Xbox era and they are losing billions now. So how the hell do they come to such a statement? That's just too funny and it looks like xbots eats everything MS feeds them with.

[Jeremy Gerard]

If the 360 is doing so poorly, what do you think the PS3 is costing Sony?
They are now selling the 60gig units at a HUGE loss, no one is buying PS3, ps3 is being outsold 3 to 1 buy the other consoles, and on top of that you stupid fanboys dont buy enuff games! PS3 attach rates suck, so worry about your own box before you look at the 360 and talk Sh*t.

[AllroundGamer]

don't forget the statements like "users are responsible for the xbox360 failures" and "xbox360 isn't capable of scratching discs" :)

[psycho360]

MS is selling 360s and atleast recovering some of the money unlike sony who are losing money cuz of low sales and still they continue to produce which is another heavy burden, since they cannot sell to the channel which already has the glut of ps3.

[CourtesyFlush]

When asked for comment, the Almighty was nowhere to be found—rumored to be still waiting in line at Best Buy for a Wii.

[texism]

You suck at life and you have a horrible sense of humor.

[psycho360]

Darn it, wasted 10 secs of my life reading your pathetic attempt at being humorous.

[hotshot1237]

against since they launched a year b4 the other 2 consoles

[InSpectre]

Does the attach rate include live arcade downloads?

[razer]

from a company who won't announce units sold vs. units shipped. Too much smoke and mirrors for my liking..

Just keep bringing me the superior games and I'll be happy.

[Says you]

And the XBox 360 $400 highly doubt that Microsoft made more money considering even if the PS3 didnt sell that much Sony is the one that is loaded with money not them so there either lying saying that there making more money when Nintendo's profits are %77 and they havent even released there data on theres on there system cause if they did they would show the people that they are lying and bragging about nothing that they dont have!.

[tk]

If they sold a bit more they would have to take a 2 Billion repair hit. That should really impress the investors. For every dollar you give, we will lose two.... great opportunity... we sold most, lost most... yeah go baby!!!!

[BLACKJACK VII]

FACT #1: People who buy an Xbox360 buy games - & lots of them !
FACT #2: Xbox360's software outsells Nintendo & PS3 combined !
FACT #3: SONY is *4.3 MILLION* consoles behind M$, currently outsold 2-1 !
FACT #4: Haters keep hatin' while happy Xbots enjoy their games !
IMHO: If you own a PS3, good for you ! Enjoy it ! But don't bash other Gamers because they have made their choice too, & the overwhelming majority of us favor the Xbox360 !!! That's just how it is - Deal with it !!! Hell, Nintendo's kicking both our asses anyway !!!

[devi8i]

You may want to review your Fact #2.....

and #4 is an opinion

Jason XG1.... go back and read my posts. I support all the big 3 with a little bias towards the 360 at this point and time.. secondly i commented on a post that said "FACT #2: Xbox360's software outsells Nintendo & PS3 combined !" He did not say Wii and PS3 sales. So do you really think the 360 is beating the software sales of the DS, GBA, Wii, and PS3 combined? Pokemon Diamond just surpassed the 10million mark by itself. The top 4 selling DS games exceed total game sales of the entire 360 library.

If he were to change his comment to "FACT #2: Xbox360's software outsells Wii & PS3 combined !" Then he would have a pretty strong arguement. But, as it stands now he has not and he doesn't. Go be a fanboy someplace else.

[JasonPC360PS3Wii]

It's just not a fact to Sony fans

[kewlkat007]

1. I know everybody expected MS to start cashing in early after the original Xbox, while forgetting, the big behemoths, they were taking on. Sony + Nintendo, which did, solidify there positions and brands names after like 30 years together. So yeah, MS knew, it would be loosing money for a while, before it actually established it's brand name, and user-base.

2. Now you can look at it, as if, MS is loosing money all together, which is what everyone and MS expected, but the most important thing here is, them becoming the "X-factor" in the gaming market, and at least making Sony stay on it's toes. I really did not expect Nintendo to challenges or push Sony in any way, I mean look at the Wii's hardware.(no offense_

3. while fanboys can only see MS's "RED" numbers as a whole, while not giving credit in other profitable areas, there is more to it than that. MS has always been in this for the long haul. Now having console/franchise loose money from the start, as I said, was expected but to have your user-base consistently buy! buy! buy! games and accessories for the console, is a big positive, as it will give developers a good insight on what sells on this brand, and as well, they will continue to feed the "GREEN MACHINE" software and exclusives.

4. You cannot sustain profitability in the long-run on just Hardware alone. It really comes down to games. If games sell well on a certain console, then more developers take notice, and come out with their games for that console so they can get piece of that pie. A bigger library looks better to consumers, when purchasing for their first time. That console will expand it's user-base and were back to the "Hardware" selling again.

ON ANOTHER NOTE:

a.Sony has already cut into their Profits, with their clearance sale. Whether it's TEMP, I don't know , we will see. But I know they were forced to, while MS has been sitting tight.

b.MS has not dropped their price yet,(even PS2 dropped it price much earlier when it debut) as well, they have sold more units, so I expect them to be more profitable on consoles sales alone, but if it wasn't for the RROD warranty issue, they would of done a lot better, even would of gotten the EE division out of the RED.

c. Bigger USER-BASE + bigger GAMING LIBRARY + bigger SOFTWARE ATTACH RATE + more ACCESSORIES SOLD + more XBL CONTENT BOUGHT is going to bring in some money, even though the CONSOLE sales did get sluggish.

We know consoles sales do get sluggish depending on the time of season. It's about to be ROUND 2 this HOLIDAY and it will pick up. In all, MS has to be more profitable. Plus remember E3, it was part of their Presentation.

A good indicator of what is going on since Jan.
http://www.gamasutra.com/ph...
360 have been somewhat Steady this year.

[devi8i]

Since when did 1 become a lot?

[StrboyM]

with all that money over at M$, you gotta believe the weed is better.

[JasonPC360PS3Wii]

"If you think about consumer spending on the platform, compare since the launch of the Wii and the PlayStation 3 to date, so a little over, what, seven or eight months, people have spent $2.6 billion in the U.S. on Xbox 360 all up during that period.

"That's almost double what they spent on either the Wii or PlayStation 3. There's a lot of traction with consumers around this product. We've launched in 11 more countries. We're now in 37 countries worldwide. We're in a very good position on the fundamentals of that business."

[XxZxX]

I agreed if the trend continue, XBOX 360 will be in good shape. But right now, they still operating in $1.1 billion loss. Yes they generated revenue but it's still a loss, they're not making money. Future maybe

[Ru]

20 games and at least 5 accessories for the 360.
Compared to my 3 games and 1 extra controller for the PS3.
I Have the feeling my 360 stuff will stay in the lead over my PS3 stuff.

[ASSASSYN 36o]

Multiply 7 million xbox players times the cost of Xbox-live $49.99. That is three hundred forty-nine million nine hundred thirty thousand a year minus what people spend in xbox market-place and video-marketplace. Microsoft may not make a lot of profit off systems but xbox-live sure brings it in quick and easy.

And the money we pay for xbox-live brings us exclusive content in games (like GTA) and downloads (like Call of Duty Beta). You can disagree with this all you want the reality is true every time I hit the power button on my 360. PSN and wii on-line can only TRY to duplicate what xbox-live has provided to gamers.

I don't need either system to prove xbox-live is a bigger money maker and better provider. Because when post like this comes out sony boys best and most consistent comment is...WAIT. You can crack all the red light jokes you want Fact 360 is beating everything, Fact the attach rate for 360 last year was 6.1 and IS still consistent. Fact peripheals sell on the xbox 360 more than any system in history.

And the games keep coming year after year 360 has proven it's technological ability. And regardless what sony droids say. Your system is getting beat by a console called wii with hardly any advanced technology in it...thats embarassing. Goes to prove lots of money can't always buy happy gaming.

[texism]

Of course MS made more money than their competitors. I mean, they only had like a freaking one year head start. Isn't it only logical that they sell more than competitors? They had the time to make more games, more accessories, etc etc.

It's like two people intend to dig a hole, one person starts digging a week before the other, then they tell everyone "look, my hole is deeper than his." Well durrrrhhh!

[rusgreim]

The article specifically notes the sales numbers ares SINCE THE PS3 LAUNCH.

Therefore, your annalogy would be incorrect.

You could say however, that they started digging at the same time but MS was using an earth mover and Sony was using a shovel. That would account for MS's increased market presence.

[ASSASSYN 36o]

Rusgreim just pwned you assss!

[NextGen24Gamer]

1. Attatch ratio lets Developers know where the money to be made is at.

2. Even if you ignore the attatch ratio...Just look at the money ratio....the 360 is making 2 times as much money as the Wii and the PS3. What does that mean? lol

3. Even if you ignore the money made and the attatch ratio....The 360 is selling more games than the ps3 and the Wii combined.

4. Even if you ignore all of above...the 360 games run better and look better than the competition.

5. Even if you ignore those things....As bad as Sony fanboys say the 360 is selling since christmas....lol...It has outsold the Ps3 since it launched in November 2006.

Just say you hate Microsoft and you hate competition. Just say blind allegence prevents you from truly enjoying this next generation of gaming. Just say you hope and pray that HD dvd fails so that you can sleep better at night after investing 600 dollar plus in a console that doesn't compare in regards to games to the xbox 360....I say this not to bash....I say this because I own both consoles and its a fact....If you don't believe me....How about the reviews? Across the board they say the same thing I already know from owning and playing both consoles. If you don't believe me and you don't believe hundreds of reviews....how about G4TV....they have said the same thing over and over again. In regards to games.... 3rd party games look better on the 360 and all the buzz is about Halo 3, Bio Shock, GTA 4, Madden in 1080p at 60 fps, Call of Duty 4 (running on the 360) and so on and so on.

Some Sony fanboys say things like "well its coming on the PC so its not really exclusive".

Well....the fact remains that 360 versions of exclusive Microsoft windows live games....Sells more for the console. Whether you like it or not. The console version is the most loved version according to consumer dollars. And thats what matters. No need to upgrade your computer or share time with your mommy and daddy or sisters and brothers....No viruses....and a unified community of your friends all across the world.

Its so funny how sony fanboys hate Microsoft. I don't understand why.

Me myself...I enjoy the Wii, xbox 360, and the Ps3.

Obviously I favor the 360. But I only do so from spending time with all three and actually playing all three. But they are all consoles I'm happy I own.

[Covenant]

A couple of weeks ago I asked 2 friends--one a PS3 owner, the other with a Wii--how much they had spent on their systems to date, versus how much I spent on my 360.

I've spent more than $800 in games, controllers, Live points, and other accessories for the 360.

My friend with the PS3 has spent about $500 on his system.

My friend with the Wii has spent less than $400.

For perspective, I got my 360 in October, and my friends both got their systems at launch, so I've only had my system for a month longer, and I only bought one game at purchase: Oblivion.

I think 360 owners tend to be a little more hardcore, and they purchase more games, etc., than the owners of the other systems. (My friend with the PS3 has said he'd spend more....if there were more games. I told him to be patient).

One person's perspective. Take it as you will.

[360Crusader]

The 360 sells more software then any other platform.

http://www.vgchartz.com/awe...