Microsoft's Xbox 360 division loses $31 million

After consecutive quarters posting a net profit, Microsoft's Entertainment and Devices segment returns to red ink despite 30 percent spike in hardware sales.

Just as the stock market fluctuates constantly in the weak economy, so too do companies find their financial fates wavering. Today Microsoft provided the latest evidence of this, releasing mixed results for its second fiscal quarter.

1.7 million sold from January through March.

For the three months ended March 31, 2009, the software giant announced that company-wide revenues dipped 6 percent year-over-year to $13.65 billion, while operating income was actually up 3 percent to $4.44 billion.

The news was similarly scattered for Microsoft's Entertainment and Devices division, which includes the Xbox 360 business. Total revenues for the gaming segment were down less than 2 percent to $1.57 billion, and where the division posted an operating profit of $106 million during last year's second quarter, this year it ran a $31 million loss.

On the positive side, Xbox 360 sales picked up considerable momentum. Microsoft's console sold 1.7 million systems during the quarter, up nearly 30 percent from the same period last year. Microsoft also touted improving attach rates of games and accessories for the system, saying the average owner has 8.3 Xbox 360 games and 3.9 accessories, up from 7.5 games and 3.6 accessories at this time in 2008.

In a post-earnings conference call, Microsoft chief financial officer Chris Liddell said that he was pleased with the company's relative performance in what he called the "most difficult economic environment" the company has ever faced. Liddell specifically called out Xbox 360 hardware sales as one of Microsoft's bright spots for the quarter but cautioned investors that the company expects economic recovery to be slow and gradual, lasting at least through the next quarter and possibly the calendar year.

During the call, chief accounting officer Frank Brod also updated investors on the company's Xbox business. For the fiscal year-to-date (since July 1, 2008), Brod said Microsoft had sold 10 million Xbox 360s worldwide, 15 percent more than it managed over its entire previous fiscal year.

655 Comments

  • Mr_Bodywave

    Posted Apr 30, 2009 2:19 pm PT

    MTMind2--excellent post. And spot on analysis. I think MS will be largely ready and could launch end of 2010 but might wait until 2011 depending on how PS3 and Wii are doing. They will definitely want to get a years head start on them.

  • Mr_Bodywave

    Posted Apr 30, 2009 2:16 pm PT

    Malco:
    "my guess is that the next console gen will be in 4-maybe 5 years. "

    Wait--you don't think there will be new consoles until 2013-14? Are you SERIOUS? There is simply no way that will happen. 2010-11 is much more likely. 2012 being the longest any reasonable person would predict. To actually with a straight face say 2013-14 is my laugh for the day. MS will definitely have a new console out by then as will Nintendo. Sony will too--they won't have a choice.

    "mine's less of an opinion and more of an educated guess really. "

    actually it shows a decided lack of educated guess. Nintendo could release a console matching the 360 and PS3s graphics this year at $250 and not be losing money (or next year at the latest). Xbox360 is at par with PS3 now so would not be a problem to have better graphics. But the economics work out better for MS to put it out end of 2010 or 2011. I would bet that they won't be any later then end of 2011.

  • Mr_Bodywave

    Posted Apr 30, 2009 2:09 pm PT

    Malco
    "and yes you're entitled to your opinion it just happens to be wrong."

    This is priceless--someone acting like they know something when in fact it is they who are wrong. Comedy gold!

  • Mr_Bodywave

    Posted Apr 30, 2009 2:03 pm PT

    Nappan:

    "I think when you're at the point of having to explain the most basic concepts of profit and loss, it's safe to say you're explaining things to someone incapable or unwilling to grasp them. "

    I agree--it is amazing how little he knows about these things. It is easy enough to look at Sony's reported P/Ls and MS's and see how the numbers really are.

  • Mr_Bodywave

    Posted Apr 30, 2009 2:02 pm PT

    Malco:

    "where'd you get these numbers?"

    Sony's SEC filings

    "dude... posting a profit for one quarter still doen't change the fact that 4 BILLION DOLLARS WAS LOST AFTERWARDS. "

    No, but it does make your statement that they didn't have a profitable quarter until 2008 wrong.

    and Sony making money on teh PS2 doesn't change the fact that they have lost more than that on the PS3.

    "and also if the xbox division lost four billion dollars than where can I attribute the losses besides the xbox?"

    Well since it isn't the "xbox division" I would say the other areas? Zune comes to mind. I think Windows Media Center is also in that division. WebTV. MSN. etc. That division was losing money way before the xbox came out.

  • MTMind2

    Posted Apr 29, 2009 9:00 am PT

    @Malco_Vincenzo:

    thanks for that, here's my take.

    if we look back on the history of console launches for the current main competitors, we see the following gaps between their worldwide debut launches;

    nintendo:

    SNES - nov 1990
    N64 - jun 1996 : 5 years 7 months later
    GC - sep 2001 : 5 years 3 months later
    Wii - nov 2006 : 5 years 2 months later

    so based upon the last 2 decades, i think its reasonable to make a prediction that the next console from nintendo will arrive no later than 5.5 years after the wii, which is mid 2012.

    sony:

    PS1 - dec 1994
    PS2 - mar 2000 : 5 years 3 months later
    PS3 - nov 2006 : 6 years 8 months later (6-9 month delay)

    based upon the last 3 generations of sony consoles, i think its reasonable to make a prediction that the next console from sony will arrive no later than 6.5 years after the ps3, which is mid 2013.

    microsoft:

    XBox - nov 2001
    360 - nov 2005 : 4 years later

    clearly the xbox life was cut short, so i would say 5 years minimum for the next console, which is nov 2010, but more likely nearer 6 years after 360, which is 2011.

    therefore i think it's highly likely that there would be at least 2 new consoles in the market 3 years from now, and perhaps new consoles from all three main competitors 4 years from now.

    in fact, some think it will be much sooner than that, with one analyst saying both ms and nintendo will have a new console out by next year;

    http://uk.gamespot.com/news/6185976.html

    i think its unlikely that both ms and nintendo will have new consoles out next year, but i guess we will have to wait and see what happens. :-)

  • Malco_Vincenzo

    Posted Apr 29, 2009 5:55 am PT

    @MTMind2
    "btw Malco, based upon your opinion that the next-gen doesnt start until theres at least 2 new consoles entered in the market, and given that this is likely to be ms and nintendo before sony, when do you see this happening? i say 2-3 years. whats your guess?"

    my guess is that the next console gen will be in 4-maybe 5 years. this is based off of the technology we have now. we are currently on dvd format 9 and blu-ray second generation. within four years do you thinnk people will still be using dvds? in 4 or even 3 years we will see dvd start to dissappear and blu-ray be the format in predominant use. this will cause M$ to develop a console with tech that will probably have to support blu-ray 3/4th generation. this will also cause nintendo to have to upgrade to the standard (finally). that will take more than 2 years to get it right. and seeing as M$ probavly doesn't want to lose another billion dollars to stupid errors like the RROD, they probably won't rush to next gen like they did with the 360. They'd also want to surpass the PS3's graphical power. And now for why nintendo won't go to next gen in 2-3 years. if nintendo were to develop new tech within 2 years for a next gen system and release it before the ps4, it would be more expensive than the PS3 and result in crappy console sales due to the PS3 undercutting them. that's why the wii wasn't released until the PS3 was. Japan's market is already showing a slowdown in wii sales after 2 years. mine's less of an opinion and more of an educated guess really.

  • Penguins20

    Posted Apr 28, 2009 4:59 pm PT

    Damn, I put more spaces in than that! Sorry for text overload

  • Penguins20

    Posted Apr 28, 2009 4:58 pm PT

    @brendanhunt: I agree that the PS3 will have a long lifespan, as Sony have a good track record for producing consoles well after they have become obsolete (In hardware terms). However, most of the tail end of this theoretical 10year lifespan won't be relevant in the core gaming zones of Europe, US, Japan etc. where gamers expect the great graphics/new gimmicks that the next (8th) generation will bring.

    Instead, the PS3 will probably generate a lot of new sales in up-and-coming economies such as India, China, etc., places where gaming hasn't been accessable/affordable till now. This is where a lot of the new PS2's are going right now. However, the key flaw in Sony's approach right now is price. PS2 sells well because it is cheap, PS3 is expensive. When the next gen comes along, it may well be better for Sony to cut the losses in manufacture of the console and simply stop producing it. Unless they can make it and sell it cheap, it doesn't have the legs to go 10years. Price and support have been the key factors in the success of PS2, and given that HD won't make it to the masses in developing economies, I think that the Wii will be the winner in the long term market. By the way, I'm completely with MTMind2 on this one, in the long term, generations are assigned by common graphical capabilities/time of release, and can significantly overlap. For example, Genesis (or Mega Drive in my house) technically spanned both the NES and SNES periods, but is grouped with the SNES due to the common 16bit graphics. These classifications can be assigned after the fact, and are completely arbitrary

  • brendanhunt1

    Posted Apr 28, 2009 12:58 pm PT

    ipod touch is not in the video game gen, apple made it to be a new ipod

  • brendanhunt1

    Posted Apr 28, 2009 12:55 pm PT

    i think ps3 will have a 10 year life span because it has a very strong first party support and continues to become popular, ps2 is expected to go even longer than that

  • MTMind2

    Posted Apr 28, 2009 12:55 pm PT

    @Malco_Vincenzo who wrote "...what did they call it when it was GC PS2 AND 360"

    why dont you do some research yourself for a change? as ive shown you already, they ALWAYS referred to the 360 as next-gen, since the ps2 and gc were the current gen BEFORE the 360 was released. once the 360 was launched, that marked the start of the next generation, where ps2 and gc were now the previous gen, and gamers were now looking forward to the next-gen consoles from sony and nintendo. all three consoles, 360, ps3 and wii were referred to as next-gen consoles, seperating them from the generation which brought us the ps2, xbox and gc. in fact, people continued to call all three next-gen consoles long after launch even though theyre the new current gen.

    btw Malco, based upon your opinion that the next-gen doesnt start until theres at least 2 new consoles entered in the market, and given that this is likely to be ms and nintendo before sony, when do you see this happening? i say 2-3 years. whats your guess?

  • MTMind2

    Posted Apr 28, 2009 12:46 pm PT

    @brendanhunt1 who says "ps2 is not in this gen but there's nothing wrong with sony still selling it"

    agreed 100%. both playstation and ps2 continued to sell well long after the usual console lifespan of 5-6 years, and sony didnt plan for that to happen, it just did. so with ps3, they planned for a 10 year lifespan from the start, and it shows in the quality of the console.

  • Malco_Vincenzo

    Posted Apr 28, 2009 12:45 pm PT

    @ MTMind2
    "http://uk.gamespot.com/news/6131245.html

    gee, seems that back in 2005, gamespot (and yes, ALL the other websites) considered the new consoles coming out from microsoft, nintendo and sony to be next-generation. *rolleyes*"

    that only talks about the 360 for one. secondly you don't know how to read obviously as i said, what did they call it when it was GC PS2 AND 360. NOT THE UPCOMING AT THE TIME. THE ONE THAT WERE OUT AT THE TIME. BEFORE THE PS3 AND WII. WHAT WAS THE CONSOLE GENERATION CONSIDERED AS? lemme spell it out for you some more. what were they calling the previous gen when it was there was NO PS3 OR WII?

    and yes you're entitled to your opinion it just happens to be wrong.

    once more just to make sure
    what did they call it when it was GC PS2 AND 360. NOT THE UPCOMING AT THE TIME. THE ONE THAT WERE OUT AT THE TIME. BEFORE THE PS3 AND WII. WHAT WAS THE CONSOLE GENERATION CONSIDERED AS?

  • brendanhunt1

    Posted Apr 28, 2009 12:43 pm PT

    ps2 is not in this gen but there's nothing wrong with sony still selling it

  • MTMind2

    Posted Apr 28, 2009 12:36 pm PT

    @Malco_Vincenzo who wrote "poor poor deluded fool."

    please lets stick to the discussion, theres no need to resort to petty insults.

    "ok then what did they it back when it was 360, PS2, GC? show me an article that called it next gen when just the 360 was out?"

    firstly, i assume that was meant to be "xbox, ps2, gc". and what are you talking about, they were calling the 360 and ps3 next-gen long before those consoles were even officially announced in 2005.

    and look at this;

    http://uk.gamespot.com/news/6131245.html

    gee, seems that back in 2005, gamespot (and yes, ALL the other websites) considered the new consoles coming out from microsoft, nintendo and sony to be next-generation. *rolleyes*

    and just a quick search...

    http://news.bbc.co.uk/1/hi/technology/4247822.stm

    http://uk.ps3.ign.com/articles/614/614783p1.html

    http://uk.xbox360.ign.com/articles/709/709247p1.html

    yeah, nobody was calling 360 next generation before and after launch were they. *rolleyes* :-P

    "well that's what you think and what the world doesn't know....."

    yes, thats what i think, which imo is far more realistic than your opinion that there wouldnt be at least two new consoles in the market for 7-8 years!

  • Malco_Vincenzo

    Posted Apr 28, 2009 12:22 pm PT

    @ MTMind2
    poor poor deluded fool.
    "every magazine, website, developer, gamer (except yourself) now refers to 360, ps3 and wii as the current generation."
    ok then what did they it back when it was 360, PS2, GC? show me an article that called it next gen when just the 360 was out?

    "nobody refers to the ps2 as current gen."
    not now genius when did i ever say that?

    "i think most would agree that both ms and nintendo will have a new console out in the market in 2-3 years, so in 2-3 years we will have two new consoles competing in the games market"

    well that's what you think and what the world doesn't know.
    we know that MS will probably rush out another system within 2-3 years. that does ot begin a new gen. i cant see nintendo going for a new gen in 2-3 years. honestly why would they? just because you think so? there needs to be a reason for advancement. you don't just make a new console cuz time's up. you make one when you can surpass the current capabilities with new technology. why would they make a new xbox? the reson they pushed for the 360 was to make up for the $4 billion that they lost on the original. either way you try and make a point, the fact is that saying this gen is half done is a stretch.

  • MTMind2

    Posted Apr 28, 2009 12:00 pm PT

    @Malco_Vincenzo who wrote "and besides you don't count all consoles together when you talk about next gen"

    yes you do! every gen, as i have listed already, have been grouped by the main group of 'new' consoles competing for market share. every magazine, website, developer, gamer (except yourself) now refers to 360, ps3 and wii as the current generation. nobody refers to the ps2 as current gen. all talk of next-gen now refers to the next consoles coming from ms, nintendo and sony. and regarding the dreamcast, ive already mentioned where that fits into the console generations.

    you also said "it's takes at least one competitor for there to be a next seriously considered generation". ok, so lets take that as YOUR argument for the start of the next-gen. i think most would agree that both ms and nintendo will have a new console out in the market in 2-3 years, so in 2-3 years we will have two new consoles competing in the games market, meaning the start of the next-gen would be 2-3 years from now, and therefore means we are at least half way through this current gen.

  • Malco_Vincenzo

    Posted Apr 28, 2009 11:58 am PT

    @ nappan agreed 100%
    i don't know how he thinks that a new console generation starts with one console being released. it takes two to at least make something.

  • Malco_Vincenzo

    Posted Apr 28, 2009 11:37 am PT

    @ MTMind2 and besides you don't count all consoles together when you talk about next gen. that would be sloppy when you look at it. the dreamcast/saturn fiasco. the virtual boy, and the 360's rushed release can be shown as examples of this.

  • Malco_Vincenzo

    Posted Apr 28, 2009 11:35 am PT

    @ MTMind2
    "as far as im aware, the start of the next-gen marks the end of the current gen, does it not?"
    actually no, it does not. this shows the the current gen is on the VERGE of ending. and i still don;t see how you think that this gen is half over. maybe for the 360 seeing as how it was released a year before the other systems, and also looking at how short the original xbox's run was. looking at the ps2 and the GC both outlasted the xbox in software support. it's takes at least one competitor for there to be a next seriously considered generation. the wii and PS3 will most likely outlast the 360 due to longer first party support. as far as i''m concerned when only one console of the previous gen is getting software support "like PS2 with Yakuza 2's release in 200 then that gen is considered over. If there is someone still comepeting with the previous gen (PS2 and GC when the 360 was released) then that gen is coming to an end but not over.

  • BLuFAlc0n

    Posted Apr 28, 2009 10:29 am PT

    Microsoft shouldn't have bothered blackmailing.....
    Now, look what happens....

  • aaronobst

    Posted Apr 28, 2009 9:44 am PT

    ROFL!!! thats allot of money

  • MTMind2

    Posted Apr 28, 2009 9:09 am PT

    @nappan: you are talking about a specific console, im talking about the console generation in general. we've had the snes/genesis generation, the playstation/saturn/n64 gen, the ps2/xbox/gc gen and now the ps3/360/wii generation of consoles. each generation is marked by the first of the consoles to be launched. the only exception is the dreamcast, which was segas second attempt after the failure of the saturn, and so hovers in between gens.

    so the current generation is 360+ps3+wii, and as a console generation is probably at least half way through, where it would be seen to end with the arrival of the next generation of console. and yes, the ps3 is going to continue for longer than that, as did it's predecessors the ps2 and playstation.

  • nappan

    Posted Apr 28, 2009 8:57 am PT

    @MTMind2: The end of a console generation is marked by the end of support for that console, not the emergence of a new one. The emergence of a new gen, indicates that there is... a next gen... that doesn't necessarily instantly eliminate the former generation (as in the case of the PS2, DS/Lite... etc...).

  • MTMind2

    Posted Apr 28, 2009 8:51 am PT

    @nappan who says "he never said that the next gen was that far away."

    this is what he said nappan "and even if you think that this generation is 3.5 years old, it's still nowhere close to even half over like parhar67 said."

    as far as im aware, the start of the next-gen marks the end of the current gen, does it not? yes you may still have consoles from the previous gen still selling, like the playstation during the ps2/xbox/gc era, and today the ps2 during the current 360/ps3/wii era, but those previous gens are over.

    hence when ms and/or nintendo launch their new console (which will almost certainly be before sony), that will mark the beginning of the next-gen.

  • Autolycus

    Posted Apr 28, 2009 8:37 am PT

    @vegan_cannibal
    Apparently you fail to realize that the only way ANYTHING ever changes is with consequence. And the crappy sequels, lack luster titles, etc are all consequence of 1) people keep buying them (madden could easily be updated rosters every year) and 2) publishers not making enough money to devote more time into and IP. They don't make money because so many people purchase the games used, which the actually hard working people, that created the game, don't get squat on.



    Now I am not saying you should feel bad for MS, Sony, Nintendo, etc. I am saying that you have zero right to complain when lacklaster, boring titles come out, if you are buying used games. Because your purchase of the used game, DIRECTLY effects the overall profit made from publishing that game.



    So next time you think a comment is "immature" why don't you try to actually understand how the business work and how they make profit/capital in return for the time and money spent on the project.

  • nappan

    Posted Apr 28, 2009 8:31 am PT

    @MTMind2: I think "we have a good 7-8 years of this gen" meant that it would be viable for that long... he never said that the next gen was that far away... just that this one had that much life in it.

  • MTMind2

    Posted Apr 28, 2009 8:07 am PT

    @Malco_Vincenzo who says "gen didn't really start until the PS3 and wii hit shelves. what "next gen games did the 360 have at launch?""

    please dont confuse opinions with facts. :-) this gen started with the launch of the 360, thats a fact, whether you consider the 360 games to be next-gen or not is irrelevant. the launch games of the ps2 were considerably worse, but that doesnt change the fact that the ps2 marked the beginning of that generation of consoles. yes of course, once ps3 and wii were launched then this gen was finally in full swing, but thats the same with all gens, where once all the main formats are launched, then the real battle begins.

    "we still have a good7-8 years of this gen"

    you really believe that? so you think ms, nintendo and sony are not going to have new consoles in the market for at least 7-8 years?

    come on, just because sony have a 10 year plan for the ps3 doesnt mean the ps4 is 7-8 years away, it doesnt mean the ps4 is waiting until the end of the ps3 life cycle. the ps4 will be out LONG before then, and therefore will be out competing against the new consoles from ms and nintendo when the next-gen starts, probably 2-3 years from now.

  • Ace77765

    Posted Apr 28, 2009 5:24 am PT

    Microsoft will have to go through some serious repricing in terms of accessories and live gold if they wish to keep up as well.

  • Ace77765

    Posted Apr 28, 2009 5:23 am PT

    Onlive will not get off to a jumping start. People are used to the more traditional way of playing games, and still, even though they are keeping it on the hush, no one knows which games are going to be released for this besides the basic multi-platformed games for now. Microsoft's problem is due to overpriced accessories, and people not willing to pay to fix their red ring of death consoles. Onlive is going to be a nice branch out for people willing to do so, but remember that sega genesis channel thing. If they don't keep up, people will loose interest very very fast.

  • nappan

    Posted Apr 28, 2009 5:01 am PT

    @Malco Vincenzo: I think when you're at the point of having to explain the most basic concepts of profit and loss, it's safe to say you're explaining things to someone incapable or unwilling to grasp them. That said, "dude... posting a profit for one quarter still doen't change the fact that 4 BILLION DOLLARS WAS LOST AFTERWARDS." is a PRICELESS line ! The fact that it had to be said kinda makes me want to cry though

  • Malco_Vincenzo

    Posted Apr 28, 2009 4:30 am PT

    @ Mr Bodywave
    "The PS3 has cost Sony over $4B and maybe close to $6B. It has wiped out all the profits from the PS2."

    where'd you get these numbers?

    "Malco...MS posted a profit around 2004...the quarter Halo 2 came out.

    Also, just because the division the xbox was in lost $4B--doesn't mean that you can attribute all of that to the xbox."

    dude... posting a profit for one quarter still doen't change the fact that 4 BILLION DOLLARS WAS LOST AFTERWARDS. and also if the xbox division lost four billion dollars than where can I attribute the losses besides the xbox?

  • Malco_Vincenzo

    Posted Apr 28, 2009 4:25 am PT

    @ MTMind2
    "this gen started when 360 was launched (nov 2005), just like last gen started when ps2 was launched (march 2000), so we are now 3.5 years into this current gen."

    this gen didn't really start until the PS3 and wii hit shelves. what "next gen games did the 360 have at launch? all it had were HD versions of PS2 games and RROD. and even if you think that this generation is 3.5 years old, it's still nowhere close to even half over like parhar67 said. the PS2 is going on it's ninth year. we still have a good7-8 years of this gen.

  • nappan

    Posted Apr 28, 2009 4:21 am PT

    @fps d0minat0r: Don't get me wrong, I think the PS3 has a bright future, but part of the reason I put up with my first 360's death, is that there ARE exclusives for it that I wouldn't do without if I could. Star Ocean, Tales of Vesperia... I could go on, but for me, those are enough when added to netflix and Live. Similarly, there are a couple of games that justify the PS3 for me (Eternal Sonata on the PS3 is soooo much better for instance, and KZ2, MGS4... well... amazing). Other than that statement I agree with your post 100%. The green issue too... I never considered that.

  • fps_d0minat0r

    Posted Apr 28, 2009 2:05 am PT

    onlive is impossible, we cant even stop lag on games loaded on our own consoles......how are we gonna stream multiplayer information and the full game without even more lag???

    and if it does work somehow....then it wont be very green if the whole world uses it for gaming.

    as for microsoft, im not suprised, its ran out of potential.....its peak was all the way back in halo 3 days when it had all the good games and exclusives......thats not the case anymore.

  • thenephariouson

    Posted Apr 28, 2009 1:09 am PT

    Deathwish123 Posted Apr 27, 2009 11:38 pm GMT "When "Onlive" comes out in Septemeber, Xbox 360, Wii, and PS3 will most likely become obsolete."

    Please tell me that comment was a joke.

  • nappan

    Posted Apr 27, 2009 5:01 pm PT

    @okassar: Ah no. First of all, guaranteeing 1 Billion USD isn't SPENDING it. Clearly they havent' spent more than a fraction of that, if their own hardware failure reports are to be believed. Second, MS makes money by selling games for the console, not the console itself. Selling the console at a loss doesn't mean that MS simply intended the thing as a marketing gimmick. If they did, I think the RROD and 1 Billion warrenty issue would have made it the biggest fiasco in marketing history lol. No okassar... they just want to make money on the back end, just as Sony does (same idea).

    It's true that MS is much bigger tha its gaming division, but if you think of the money spent in marketing, aquisitions, R&D, production, etc... etc... etc... It's not an insignificant thing.


    Onlive is going to be DOA.

  • SuperGogeta24

    Posted Apr 27, 2009 3:58 pm PT

    i dunno about onlive...but...
    http://www.eurogamer.net/articles/gdc-why-onlive-cant-possibly-work-article

  • Drkoolbeanz

    Posted Apr 27, 2009 3:58 pm PT

    "Onlive" can suck a dick.

  • Deathwish123

    Posted Apr 27, 2009 3:38 pm PT

    When "Onlive" comes out in Septemeber, Xbox 360, Wii, and PS3 will most likely become obsolete. Onlive allows everyone to play games without having to load, in the highest possible settings, for a low price. It will remove piracy, and games will not have to be sold through retailers any more. This essentially means that games will become cheaper, and developers will have more money to spend on making new games, since there will no longer be any "middle man". How? Cloud Computing technology.

  • okassar

    Posted Apr 27, 2009 1:08 pm PT

    You guys do realize that MS never intended to make a profit on this right?The 360 was made to market the company as a whole,that's why they didn't mind renewing all the warranties for 1 BILLION DOLLARS.They look at the big picture.This is not about the recession at all,you're misunderstood if you think that. If they sold 20 million 360's in 3 months,they would still be losing money,no,actually,they would be losing more money.

  • BenBenBen93

    Posted Apr 27, 2009 12:53 pm PT

    Not too bad really considering this economic climate, i can asure you xbox fan boys that the ps3/psp sector over at sony is losing a lot more enough to cripple a lesser company i'll also add that its loses a mainly i their stocks rather than cash in had ect. and i've got 12 games and 0 accessories whether they call an extra controller or the mic an accessory the i have 3 lol. possibly 4

  • vegan_cannibal

    Posted Apr 27, 2009 11:18 am PT

    @autolycus
    Hey Buddy, if you look at the numbers above, you'll realize that these people are earning in a quarter what I will never earn in my entire life. Ya maybe some losses at times but the profits more than make up for it. I with my 600$/wk salary shouldnt have to worrry about Microsoft and otther publishers making money. I'll keep buying used as long as I save money and i wouldnt stop others from buying too. I am to blame for crappy sequels? What an idiotic immature thought.

  • Autolycus

    Posted Apr 27, 2009 10:46 am PT

    Thats interesting since profits for used games where up significantly. if these used games companies (gamestop) don't start giving some of their massive profits (that they wouldnt get without MS around) they cant count the future of their business (and all video games) goodbye.




    Every game sold used is money NOT going to the developers. So next used game you buy, remember, YOU ARE TO BLAME for the crappy sequals and less then stellar games coming out.



    If you somehow deny this fact, you are just flat out in denial and completely wrong.

  • leach112

    Posted Apr 27, 2009 10:05 am PT

    This article confuses me, it says that gaming revenues were down less than 2% (approx $30million), that console sales and acessories are up but they've still managed to lose $137 million between the two quarters. So where has the money gone? They've obviously incurred a significant cost somewhere, any idea what it is?

  • SPOONMAGIC

    Posted Apr 27, 2009 9:36 am PT

    i just remember when a article not so long ago was about sony an their downsizing ect an all the xbox fanboys were like HAHA sony u suck bla bla an so many lame comments. I wonder where them fanboys are now lol? anyway about the article who really cares isnt every business heading to a loss with this economic crisis? M$ should have made a better console instead of rushing the 360 out

  • Warlord_Irochi

    Posted Apr 27, 2009 8:55 am PT

    Microsoft looses 31M

    EA Lost around 600M if i recall well.

    Considering how big Microsoft is then... yes, i would be happy too if that is all my looses.

  • nappan

    Posted Apr 27, 2009 7:53 am PT

    @parhar67: Oh, and that isn't a LAW... no one ever bothered to legislate a in 50 states, or federally, that you can't return open games. It is SOME stores policy, and that only is in cases where it doesn't violate something called the Implied Warrenty... which is a law by the way.

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