Microsoft just released its Q4 and fiscal year financial
results, which showed the company’s growth at a 15 percent increase over
last year. Overall, things were good at Microsoft, though the company’s Entertainment
and Devices Division (EDD) weren’t one of the company’s financial stars.
The EDD once again posted losses, but this year a stunning $1.89
billion – about 47 percent more than the previous period’s $1.28 billion loss
from last year.
For Q4, operating losses increased 183 percent to $1.2
billion, mostly due to Microsoft’s over $1 billion charge for its new
three-year warranty against the Red Ring of Death.
Microsoft attributes the majority of its operating loss to
in Xbox 360 warranty policy and slowing
sales, though the loss was "partially offset by decreased Xbox 360
console manufacturing costs." Also helping to pick up the slack were sales
of Zune, video games and Xbox 360 accessories.
Overall revenue was down during Q4 at $1.16 billion, but fiscal
year revenue was up 28 percent to $6.08 billion.
Despite this rather hefty shortfall, Microsoft expects great
things for the upcoming year. In May, Robbie Bach, president of the EDD, said
that the division would be profitable by 2008.
“It's a business that will be profitable next year—we'll make money next year
and that will be the first time, which is pretty exciting,” said Bach. “And
then the next two or three years are the place where you need to make tracks,
and the next two or three years are where you have to make money.”
quote: Microsoft attributes the majority of its operating loss to the change in Xbox 360 warranty policy and slowing sales
quote: Transition to a smaller architecture is not always a solution to heat problems - see Northwood to Prescott.
quote: On a side note, I also saw a PS3 this week that had gotten so hot that it had melted the HDMI cable used to connect to the television. Had to use pliers to remove it and eventually it was OK, PS3 still worked though.
quote: I'm not an audiophile or videophile though, so the slightest of interferance, if any, wouldnt matter much to me becuase id never know.
quote: I also saw a PS3 this week that had gotten so hot that it had melted the HDMI cable used to connect to the television. Had to use pliers to remove it and eventually it was OK, PS3 still worked though.
quote: Yep, MS is going to get out of the console business.
quote: "I don't see why people people blame Peter Moore for the 360 hardware problems. He didn't design the system and is not responsible for the RROD or any other hardware problems.He is a PR guy, nothing more.
quote: but compared to the overpriced PS3 (witht its geforce7 graphics and lousy 256MB of main RAM)
quote: It could happen but, if it backfires, MS will be forced out of the console race or will bleed money copiously for the foreseeable future.
quote: So who is really worse off? the company that has a 30% failure rate but will probably exceed the original xbox in sales and the ps3 in sales? or the ps3 whom potentially could loose up too 200% total number of sales compared to the last console??
quote: You state a number of facts that are clearly wrong (and that don't even make any sense at all)
quote: Pure drivel, and certainly not worth the time to dissect and respond to every mistake you made, at least not to me.
quote: Even MS can't continue to operate in the red forever
quote: The company that has sunk billions of dollars into R&D and game develop without even a THOUGHT of a profit...
quote: The company that has no business to support a content heavy business endeavor, such as gaming...
quote: The company that has virtually NO experience in consumer-centric design...
quote: The company that has a brilliant history of quality and security issues, that employs many of the best minds in its industry and STILL can not produce a stable or secure product, including its console.
quote: Guess which one that is?
quote: One of the reasons MS hit the market first with an obviously flawed design is so that people like you can quote completely misleading sales figures. Here are a few facts...
quote: The PS3s sales arc is comparable to the 360s at a similar stage and comparable with early sales of the PS2. If you had told anyone that Sony would sell 120+ million PS2s with Microsoft entering the market with the supposedly superior Xbox, you would have been laughed out of the room.
quote: Before the Elite or the design issues, 360 sales had practically ground to a halt.
quote: Even MS can't continue to operate in the red forever. And things aren't getting cheaper either. If MS doesn't start posting profits soon it likely will NEVER BE ABLE TO. Then you have a huge red gouge in your ledger every month. At what point does it become fiscally more responsible to your shareholders to shut down a failing division?
quote: All companies invest very heavily in R&D-without even a THOUGHT of a profit...
quote: Whats Apple got to do with cell phone bussiness that drove them hard to bring in their iPhone ???
quote: All companies whoever they may be have their ups & down,some good points & some bad.Their track record has all of it -the good ,the bad,& the ugly.
quote: Its your post thats worse off.
quote: No company in its right mind puts out(intentionally) a product with flawed design,including M.S.Mistakes are made-like you do also-we are all human beings-we all make mistakes.Yes we do correct those mistakes & we learn from that experience & improve.
quote: Consumer taste & preference are always changing-nobody can predict them or statistically prove them to be that.
quote: You sumarize your sales on quaterly basis-there is no evidence to prove that
quote: Yes MS cant continue to operate in red forever-thats the reason,they take corrective measures to rectify the situation- nobody can take it for granted that the Xbox will not make a profit.Corrective measures(technical & personnel) after they are implemented,the results of which you will see only after a quater or two-it takes time for these results to show.
quote: To summarize it-your(this) argument doesnt hold any ground..
quote: The PS3's graphics are piddly next to the mighty 360... even though its already been shown that PS3 graphics generally match and sometimes even exceed the 360 in quality...
quote: The post above is why some people think most people on forums are just company schills.
quote: a comparably configured 360 COSTS MORE and STILL DOES...
quote: Virtually every complaint has been fixed via firmware. Yet the PS3 is still considered overpriced junk, completely unable to compete with the 360...
quote: If the PS3 had been released in its current form, there would be no doubt that it is the superior system, especially in light of the 360's design flaws.
quote: all you here from MS fanboys is "wait for 65nm." C'MON, that isn't hypocritical or anything.
quote: Gaming isn't a religion... or at least shouldn't be. The PS3 is a great product and has shown to be a better investment than the 360. That doesn't mean the 360 sucks but, let's face it, it isn't as great as everyone thought.