360 sales narrow Microsoft game losses

Next-gen console breaks 6 million-unit barrier--but Entertainment and Devices division still takes $96 million Q1 hit.

455 Comments

First, the good news. As part of its earnings announcement today, Microsoft boasted that high Xbox 360 sales have boosted quarterly revenue for its Entertainment and Devices division by 70 percent. "Demand for Xbox 360 consoles, software, peripherals, and Xbox Live" increased the department's July-September revenue to $1.03 billion, up from $606 million during the same period the year prior.

"The Xbox 360 has sold 6 million consoles worldwide...to date and achieved record cumulative attach rates for software and peripherals in the United States, while Xbox Live passed the 4 million member mark during the quarter," the company said in a statement.

Now, the not-so-good news--just because the 360 is popular doesn't mean it's profitable. For the quarter, the Entertainment and Devices Division lost $96 million, versus the $173 million that it lost during July-September 2005. The Xbox 360 did not launch until November 22, 2005, so it was not on sale during the same quarter last year.

The Xbox 360 is currently the only next-gen console on the market, but it will face competition when Nintendo's Wii and Sony's PlayStation 3 launch next month. It comes in two models: The $299 hard drive-less core unit and the $399 wireless-controller-equipped premium package.

Overall, Microsoft took in $10.81 billion during the July-September quarter, the first of its fiscal year. That was an 11 percent year-on-year increase--the same percentage bump its quarterly operating income enjoyed, going from $4.05 billion during the same period in 2005 to $4.47 billion in this year's July-September quarter. Net quarterly income was $3.48 billion, which came out to $0.35 per share.

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longhairbilly

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Microsoft will be getting most of my money this year. I'm not buying the PS3 because it's too much money, and I'm not camping out overnight for it. I'll buy the Wii, but like the N64, and Gamecube, I'll buy it only Zelda and Mario..

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Vellyvel

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This article ties in nicely with the whole profit thing. << LINK REMOVED >>

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SemiMaster

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Nintendo has always made money on their systems and games no matter what. So what they sold significantly less than Sony did, each Gamecube they sold last generation made profit from what I heard.

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intotheshadowz

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Wiis going to win the profit race? I could see that a mile away.

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thekey

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GrimBee I would not mind the 360 loosing to the Wii. The Wii is going to be a greatly received console, with great NEW games, Like what the 360 has to offer, GREAT NEW GAMES. You only can play Tekken, DMC, MGS for so long. I say give me some NEW great games. The Wii is going to do just that. I have the 360, I LOVE IT! But I can't wait to get my hands on the Wii. Wii60 forever man!!!!

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GrimBee

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Never forget that specs dont always win. Microsoft understood that after the performance of the original xbox, and Nintendo understood that with the Nintendo 64 AND the gamecube (gamecube being more powerful than the ps2). Most specs never win the race, its being able to drop the price when it counts, and offer fresh things to the consumer which dont seem gimmicky, something which will actually be used for a long time. Even though the 360 hasnt got exactly what the ps3 has, it has the avaliability, the choice of games, the connectivity with windows vista and microsofts very deep pockets to play around with.. Nintendo has the entire japanese market in its paws, aswell as getting masses of positive attention from all over the world. The wii is seriously underpowered, but i think it will get the job done nicely (2 - 3 times that of resident evil 4...mmMMmmm :)) The wii and the 360 arent literally competing with eachother, because if you bought both consoles it would be the price of a ps3 on its own. Crazy isn't it. So for $600 you can get a "true" high-def console with a couple of games you would like to get (add some more moola to how many games you wana get though). OR you could get a wii (with game included) and a 360 premium (with game included and TWO wireless pads). These are things to think about in the GAMES market... not the media playing market.

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MONTE_BLK

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MO Money, MO Money.....

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nuttabutta

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jonaldinho, they announced a month or so ago that the 360 would be able to render 1080p with the next firmware update via xbox live or something like that

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cjcr_alexandru

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Every time I read a financial article about Microsoft the numbers just amaze me. And this article isn't an exception.

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Iffy350

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I thought everyone knew that, its why there stock plummeted after I purchaced stocks in MSFT! I bought the stock way before they announced the production of that plastic peice of crap called the Xbox! The Xbox lost MSFT tons of money! Quote scmbg Microsoft loss money with the Xbox? really? Quote

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scmbg

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Microsoft loss money with the Xbox? really?

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jonaldinho10

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the ps3 will be the only machine to have true 1080p unless the 360 comes out with a hdmi cable and port. sony can do 1080p 60fps. and ms suggests that they can do the 180p over component which is great and all if it is possible but if you have a 1080p tv, they typically don't accept the 1080p signal over component. it is all smoke and mirrors. but on the other hand sony dosen't have any cool games coming out for a long time and the company is losing a lot of money with this whole blue diode thing and who cares if you have 1080p or 2090p it doesn't matter if there aren't cool games. I am only impressed with resistance and that africa game what ever that is.

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jonaldinho10

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malaysia = malaria

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Khoo1992

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oh, i gonna get a PS3 before 360 in Malaysia!!! seriously, Xbox and Xbox360 sales in my country(Malaysia) is just sucks, Sony's PS2 and PSP conquered the Malaysian market more than 80%, Nintendos gameboy and DS in 2nd(no gamecube because people don't like it, 3rd is Xbox, very few and the most expensive at the market so far, about RM 1000($222) for an old, big current console

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klactose

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I think that everyone has forgotten that the PS3 will not be the only console capable of displaying at 1080P, (as documented here on Gamespot) Microsoft has already mentioned that they are releasing a software patch that will enable the 360 to display at 1080P, with the fall upgrade patch that should be coming within the next month or so. I'd assume they'd release it at least prior to 2007, but they haven't given a specific date yet. So say anything else, but don't say that 1080P will be a deciding factor in any sales differences between the 360 & PS3. They will be equal in that regard. Just thought I'd interject some reality into this debate. Seems no one has been staying abreast of the hardware news or something! =)

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addict3d-gamer

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microsoft lose this game again.just wait for ps3 and wii haaa haaaa sony is the king of gaming industry

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AL13NK1LL3R

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microsoft need start making profits now lol..

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nilemonitor

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Microsoft said since the beginning, they were prepared to loose money for the first three X-Box generations before they expected to make any serious profit in the industry. In other words industry strength currently out weighs profit margin. Microsoft is far more concerned with loosing ground than loosing money. You are talking about a 200 billion dollar plus corporation. They can weather a few financial storms.

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Fiku42

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Correct me if I'm wrong but isnt Nintendo the only company that has a profitable console at launch (because of its weaker technology, not to mock it Wii is a good system but that is a true fact.) Meanwhile on Sony's side PS3 doesnt look like it'll be profitable at least not right away........ Xbox believe or not wasnt profitable for Msoft at all so its up in the air if 360 will become profitable anytime soon.... Just a Quick thought.

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xxcommixx

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This is understandable. The Xbox 360 had a difficult launch last year, as many launch systems seem to always have. All, or almost, of the 360's were sold out and pre-ordered. There was surely difficulty finding a unit in any retailer outlet. And the nicest touch were the two system packages. The Core and Premium. I mean, how smart was that? Everyone instantly wanted a Premium. I have not met anyone who wanted a Core system willingly. It was either the scarcity of the Premium bundle's, or just a lack of money. The one thing that made the 360 have so much difficulty with sales, was of course the hard drive issues. Microsoft even stated that the 05' models were somehow grossly defected. But these are the sorts of sacrifices a company has to face when they are ahead of the competition. The good news however, is that the 06' models seem to be doing farely well, and certainly aren't as faulty as the 05' batch. This, of course, have naturally increased the sales of the unit. The system is progressively moving forward, and acknowledging it's mistakes. The Xbox 360 will undoubtedly reach the highest earnings during this holiday season. The most civil reasons being, of course, the games coming out in the next few months. Gears of War, as we all know, has been receiving enormous attention. It is the game on every 360's owner's "wish list." Along with GoW, there also a number of anticipated game titles that will shortly hit the shelves. Rainbow 6: Vegas, has been getting a lot of attention, with the WWII shooter, Call of Duty 3, standing at it's side. For more X360 games, simply go to the Xbox 360 section of Gamespot's website, and go to the "coming soon" game section. It will surely get your juices flowing. The X360 will have the spot-lite for many consumers, and will surely exceed the sale's of the unit. The greatest challenge will of course be the anticipated arrival of the Nintendo Wii system, and the Playstation 3. All in all, it seems like Microsoft will have a successful year, for the company and its consumers.

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dragkill

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"This generation is going to end up being much more equally balanced than the last one." Yea. At this point in time Nintendo is out on top with their profits, then Microsoft, then Sony.

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nilemonitor

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Kwzy has yet to evolve to the point of rational thought and full self realization. Until that day arrives, he is simply an animal with verbal skills. It has no clue that all things in the entire universe make up one single organism much like the particles of an atom. Any form of attack expressed in the realm of the physical world is like cutting off your left arm with your right arm. Yet that concept is far too advanced for an infidel to comprehend. Therefore I send blessings to the devolved life form because to condemn it is to become it.

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Equality3531

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This is very interesting in my opinion. Sony hasn't been doing so well this quarter. Nintendo is doing great, and Microsoft is on the right track to success. In my personal opinion, I have a feeling that Nintendo is going to sell their systems very well due to the fact that they seem to be aiming at a separate demographic from the PS3 and 360. Also I think the 360 will sell extremely well this christmas due to Gears of War. The PS3 I feel will sell out all of its initial units, but will not be able to sell as well as either of the other two systems mainly due to the fact that there simply won't be enough PS3's on the market to sell comparable numbers to the 360 or the Wii (ie PS3's 400,000 units vs. 360's several million and Wii's 4,000,000ish). Both Nintendo and Microsoft will do exceptionally well around christmas. Sony is going to have some trouble recovering from their losses... but they will rebound and come back in good time. This generation is going to end up being much more equally balanced than the last one.

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tonygregory

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<< LINK REMOVED >> Attention all PS3 fanboys. Read this article. These facts show that the PS3 is total BS. Just like the PS2 and its CGI graphics that never came out. Hell the PS2 couldn't even do antialiasing. Every game was jaggerific. LOL. Even my Dreamcast could do Antialiasing. So those idiots who want to call the XBOX 360 the XBOX 1.5. If the 360 isnt up to your standards for next gen. What about the PS3 that can't even perform as well as the 360. Oh and BTW The PS3 had to slow down the speeds on the clocks and memory in thier Nvidia GPU because of heat issues. So its performance takes a further hit. I'm still waiting for the PS3 to launch in Spring 2006 with dual 1080P HDMI connectors. Where are my games running in dual screen in Native 1080P running at 120fps. Wheres my 3 ethernet ports. Where is the hypestation now? Oh thats right deleyed, specs dummied down, ports removed, etc..... The truth is they were scared **** because Microsoft cme out with its specs for the XBOX 360 at E3 2005, so they had to announce their own vaporware to counter a superior machine. Sony has an established history of overinflating its specs. Did anyone see a single PS2 game that could do the 66 million polygons per second it promised? NO. The PS2 was barely better than the Dreamcast in graphics. And the Dreamcast didnt have any jaggies. ROFL. Buy a 360 and get in the game now. Dont wait for the SONY POS3 (Piece of **** U wont be sorry.

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dragkill

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"I think it will take ps3 a year or two before the fanboys of 360's and Wii's relize what they're missing.Well probably not Wii because they aren't hardcore.It's not like 360s are. What about resistance fall of man, motorstorm,warhawk mr.flex49 oh and some of us have tvs that can do 1080p" To tell you the truth, they aren't missing alot..... Warhawk has been bad even with it's previous titles, and resistance fall of man looks good, but I don't think alot of people will be forking out $600+ just for that game. Plus honestly, the whole thing with tvs that can do 1080p, i don't think the average gamer cares too much about what tv they have. If it's a decent sized tv, it'll work.

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grave_rob

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i think GrimBee is 100% correct.

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ocdog45

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same new will be for the onther consoles. the gameing world is a huge investment waiting to just drop rock bottom, you will always have a lose in a investment. with that they will make cash this year with high demand on the ps3 and wii, and very few consoles for sale. xbox is gonnat hit it big.

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GrimBee

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The 360 will sell LOADS over christmas, its got a nice selection of games now and alot of them are quite cheap too (£19.99 I have seen table tennis go for). With things like the pes6 bundle, and now with TWO wireless pads and like 2 games included for £279.99.. man, its a really tempting offer! I think it will sell far better than the ps2 this christmas. The Nintendo wii, i think, will steal all the ps2 thunder this christmas. And also some of the 360's. BUT, because the 360 has amazing graphics and the games selections between the two appeal to different audiences.. it is easy to say that the 360 isn't going to be beaten by the wii. Its nice that two next gen consoles can exist together. And both of them being white really helps make people be more accepting of the 360's design. Before when I saw the 360 in white, i was thinking (no, it NEEDS to be black!!) But because the ds lite white was a massive success, and the wii is also only avaliable in white, its almost as if white is the new "black" for consoles. I for one will be happy with the 360 this christmas, gears of war, dead rising, sonic... those are my main games to get. And the wii i want to get red steel, sonic, trauma centre... oh the list goes on and on. But having TWO consoles with different games is amazing. Best of entirely different worlds! plus I can hunt through the old gamecube sections and pick up some quality titles aswell. This christmas europeans are spoiled for choice. because its how gaming SHOULD be. Competetive pricing, attractive games and unique hardware. Not a fight for future proofing or investing, its about just havng fun with games! The 360 will do exeedingly well this christmas, pes6 bundle, gears of war also bridging that gap between people not thinking that the 360 is a true next gen console... and games like sonic etc open the console out into the mainstream audience. And the bonus is that its not directly after the wii's blood. So both consoles will sell extremely well in europe. In america, i think its going to be the same story because only 400,000 will get ps3's anyway. And there isn't much wide appeal for a ps3 just yet, especially for that price. The wii will be a monumental success i think, and also in japan I think the wii will be an absolute craze, aswell as the ds all over the world. Good news for Nintendo and Microsoft! Go get em!

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iffy5

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i hope the xbox 360 gets cheaper

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Cubb7

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i personally love pie. wii's gonna be tight.

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flex49

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these games....Resistance Fall of Man, Motorstorm, Warhawk are good games, not system sellers and not near good enough to make someone spend 600+ dollars. You are spending 600+ dollars for whats to come in the future, mr. nicholasnavarro....not for what will be available at launch. I'm staying in the present where I can play what I see...not just dream about it.

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warriortyson

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the sales for 360 is good I suppose.

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tonygregory

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I have been playing my XBOX 360 since March 2006. Thing has worked perfectly fine. I have been enjoying playing most of thier games in High Def. Those people who want to hold out for the Wii and play with their little remote and last gen graphics go ahead. I might eventually get it for my kids so they stay off the Xbox 360. For all those Sony fans that are sitting on the fence waiting for their overpriced underperforming (according to Sony's hype). I fell sorry for U. Your blind faith and loyalty to Sony has been misplaced. Do U realize that all but 3 of Sony's launch games will have already been out for the XBOX 360 by the time they launch. Sony has lost most of their exclusives. Their box is way more expensive. Why? So Sony can advance their real agenda. Blue Ray. It's about games. Xbox360 has had high def gaming out for nearly a year. Thier online is real, established, and fun. Do some research and U will find that the XBOX 360 has a more efficient machine in real world performance. Not these BS tech specs that PS3 claims, and can't deliver. BTW what they can deliver costs way more than programming the same thing on the XBOX 360. Lastly to those who make fun of the XBOX 360 sales, etc..... Go **** yourselves. Seriously. How much did the PS2 sell in year 1 or Nintendo DS sell in its first year? Currently it is the most expensive console, and most people are still content to play in the last generation. It takes time for people to adopt the new generation of consoles. When they do, they will find that the XBOX 360 combines great high def graphics, with superior online, and a great and ever expaninding library of games. The Wii and PS3 won't be able to say this. XBOX 360 owns the holidays. SUCK IT!!!!!

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CommonerChaos

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Nooo

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fkholmes

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Cool I think...

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judgenxcutioner

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I hate PIE!!! it's the reason why Americans are more obese, lazy and have no values nowadays!!!

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GrimBee

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Nintendo are great, they will make instant profit with the wii. The 360 will cover its losses by next year i think, all new future-technology like HD is expensive to produce because its not widely avaliable yet. Once more users come aboard, you will find that the 360 will generate so much profit, that the net loss for each console will become smaller and smaller. Until their factories can churn out profitable parts etc. Sony on the other hand will be losing LOADS of cash, with the psp they are losing an absolute load. with all that cash spent on developing bluray, cell AND the ps3.. PLUS they are selling each psp at a loss, and every ps3 will be sold at a loss aswell! Sony would have to match the 360s sales numbers NOW within a year for it to get anywhere NEAR trying to make some profit. This is why sony intend on the sony store, and the "free" online is a good front for people to use the store (which is why its free, partly, to get more people into their stores, like a funfair, free to go in, pay for all the rides). Sony's loss figures are going to be massive, and with the 360 already taking in the market, and the wii will do aswell. I think sony will be the worse off, because for it to stay competetive it NEEDS to drop the price. But they are selling it at a massive loss (even still with the psp!!) so no price, fewer users... on and on it goes. All that needs to happen is investors pull back and there you have it. END GAME. Its good that Nintendo have put their stylish business cap on this time, and that microsoft are getting into what they do best - emptying their pockets and trying to dominate geeky markets! ;)

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Sparticus247

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Too much arguing, lets try something new.......WHO LIKES PIE???

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nicholasnavarro

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I think it will take ps3 a year or two before the fanboys of 360's and Wii's relize what they're missing.Well probably not Wii because they aren't hardcore.It's not like 360s are. What about resistance fall of man, motorstorm,warhawk mr.flex49 oh and some of us have tvs that can do 1080p

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Tomdogg

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Microsoft's time has come!!!

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flex49

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Dear Mr. MSG-Deathscythe I wish you could comprehend your own post so I wouldn't have to reiterate what you "truly" wrote. In other words, when you wrote "IT WILL HAPPEN" in capital letters that doesn't sound like someone who's implying anything. Nowhere in your post did you write that it would tough for 360 to compete in the next generation wars. You said it can't. To add insult to injury, you wrote the ridiculous theory that since the 360 couldnt compete against PS2 & DS that it won't be able to compete with the PS3 and Wii. I hate to be the bearer of bad news but the 360's ONLY competition are PS3 and Wii. I guess PS3 will be competing with PS2 and DS too? And what is the score, you ask? Xbox360 - 4.5 million sold PS3 - 0 Wii - 0 In the future, that score will change but not as Sony fanboys like you want. You and your lot of Sony fanboys keep talking about 1080p instead of all the GREAT GAMES...Why? Because PS3 won't have any until at least fall 2007. That's a long time. You did say that's how PS2 won the last generation, right? You can't even name a game for PS3 that will make people buy the system this year. My advice to you is to look up to the top of your screen and click on xbox360 (uhh, can a sony fanboy do that without being called a traitor?) and check out how many GREAT non-FPS games are coming to the 360 long before PS3 finally gets something in Fall 2007. BTW, 1080p is only marginally better than 1080i. And PS3 has a long hard road to "compete" with 360 on the online gaming front. I'll be getting my PS3 in summer 2007 so while you wait for games to appear on your vaunted system...i'll be playing GOW, Bioshock, Shadowrun, Lost Planet, Mass Effect, Lost Odyssey, Blue Dragon, Call Of Duty 3, Forza Motorsport 2 & Fable 2 and that's all before your system has one great game, buddy. (calling you dude and buddy are harmless so i wont get suspended, Mr. MSG-Deathscythe...heheh)

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RaiKageRyu

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RE:MSG-Deathscythe My thoughts exactly.

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kingkade712

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So basically this is how a gamer with a life, and by life I mean stuff to spend money on that's not video games: like clothes, gas money and possibly a girlfriend if I can find one -_-, looks like in the following months. PS3: $600 bucks......................O_O. I mean yeah I like the Playstation series but dam. I mean I know its all this 'great' new technology but I already have a computer. Blu-Ray would appeal to me but I'm not stupid enough to waste money on movies. All the movies I do own are on VHS, where all the true clasics are. IF however I should somehow get an extra $700ish amount of money, I"ll totally buy it. But thats not likely. 360: Yeah it's been out for a while but Microsoft's video games have never really appealed to me. ONLY games I would bother buying are Halo 3, Dead Rising and Fable 2. Then again, all those will probably be on PC anyway. The price isn't too bad compared to the PS3, but I have better things to buy. Wii: What an enigma, this system we call the Wii. Sure it's the cheapest but is it worth it? I've heard people call it a Gamecube 1.5, others the system that will change gaming forever. Of the 3 systems, I have the highest hopes for it. Nintendo's never let me down, ever. Say what you will about the Gamecube but it's brought me hours of fun. and no not single digit hours. The same can be said of the Ps2 though. The whole motion sensing thing looks cool, if not tacky. We'll just have to wait and see but I'd rather pay $250 then $600, no matter how 'old' technology is. That's ot, my opinion and nothing but it. I don't care if you agreaa, disagree or hate me with disdain. Just no one please get fanboyish. A true gamer knows that great gaming knows no system. Konichwa, I'm going to the movies. Gonan go make fun of the people who are watching The Grude 2.

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MSG-Deathscythe

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flex49 ---------------- I don't even know if you even read my post. sometimes it helps to first try to comprehend what's written before you start babbling. I didn't say that PS3 will win the console wars. what i implied in my post is that it will be tough for the 360 to compete in the next gen wars when it cannot even tame the current gen consoles with it's newer technology and a year ahead of the next gen wars. You ask why do i compare it with current gen consoles? It's because those are it's competition right now. Duh. You ask why sony won current generation wars with it's weaker graphics? it's because of the GREAT GAMES, which the old xbox, which i unfortunately also owned, never had. it had two good games, Halo and Halo 2 and tons of copycat fps games. bottomline to my post was, xbox's strength was it's power, not games. with the ps3 on an advantage on both fronts, one can "speculate" how things might turn out in the long run. i got to emphasize that ps3 IN THE FUTURE will have blu ray games, 360 is stuck with last gen media. here's my parting word to you, "dude" (seriously, i didn't realize people still say that, too much teenage mutant ninja turtles?), let go of the fps after fps games and try some puzzle and brain games. it improves comprehension.

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Jatt_Warrior

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wii mote is a vibrator ... lol!!!

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Built

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dats a lott of money wer dealing wit here...

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polopili

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Don't think senior people will play videogames simply because the controller is a remote.... that's totally stupid. The wii may be cheap... but it got old hardware, and not many good games coming up...... Zelda,SBB, mario galaxies in a couple months and maybe..... redsteel? That's it. Don't think monkey ball or excite truck will live up to the hype. Sony has a few good games coming up..... but it's the same situation. I wished many times I bought a PS2 instead of a Wii; it simply has many more kiler games. The xbox 360 has a very good lineup coming up, nobody can deny this. It costs a reasonable amount compared to the ps3. The xbox 360 just lacks popularity, that's all.

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mask12345a

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nintendo will not dominate and yhe way their going probably never will now that thats straight sony will take ahuge loss this year the 360 has the base the other chumps are all playing catchup be afraid of the 360 PS.NINTENDO SUCKS

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