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93 Comments
- treelovinhippie, on 10/12/2007, -8/+40This is all normal. You've gotta spend money to make money.
- Lagomorph42, on 10/12/2007, -15/+40Actually, it means that Microsoft stands behind their product. They are willing to lose a quarter of a billion dollars just to fix their consoles. They also do this with the least possible pain to the consumer. I recently had to get my Xbox 360 repaired. They sent me a box and returned my beloved Xbox back to me in just over a week. My Xbox is working perfectly now.
I would say that the Microsoft Xbox team has done a wonderful job on their console. I just don't see how they are losing the console war when they have had such a strong and steady performance. I don't know about the rest of the world, but the Xbox team has connected to the American consumer. I don't just mean the raving fan-boy, but the average gamer that loves a mix of good hardware, software, and active community. Good job Microsoft on running the marathon that this war has become. - Thorin, on 10/12/2007, -2/+23I think it's still the case that every division of Microsoft posts losses year on year, with the exception of their Windows and Office divisions which post such humongous profits that the company as a whole is still massively profitable.
- thejokell, on 10/12/2007, -10/+26Unless it's made by Nintendo, who has never sold a console for a loss...
- AntBing, on 10/12/2007, -7/+21Funny how that comment gets dugg down when used in a PS3 post.
- leoklank, on 10/12/2007, -3/+15The warranty for Xbox 360 was never 9 months. It was 90 days, (3 Months DUH!). I know because I bought my second one, (after my first one died during first 3 months), in april and died in August and they wanted me to pay $140 to get it fixed. So not from nine to 12 but from 3 to twelve. By the way my 3rd xbox 360 is dead also I am trading today for a new one thanks to EB. PS3 may be as crappy as you want but I don't see forums full of people complaining of the PS3 dying on them and the dreaded Red Ring of Death.
- inactive, on 10/12/2007, -6/+16"You are a 2-3 billion dollar yearly profit company don't you think taking losses is worth it to effectively spread yourself out into the living room?"
I think they figured that part out. - supermanred, on 10/12/2007, -8/+17No, even if they are losing money they arent the vortex black hole of company destruction the PS3 is.
What I mean is, the 360 wont cause a rip in the space time continuum which will suck in and destroy Windows. - NipGrip, on 10/12/2007, -5/+13BS, breaking consoles hasn't slowed one bit, there is at least one post per day at the Shacknews.com comments with someone talking about their 2nd, or 3rd 360 breaking. Now, digg this down, XBOX fanboys, I know you're the only ones drooling over this bad news trying for some reason to defend the company.
- inactive, on 10/12/2007, -6/+14In fact he is a Microsoft hater, not a Sony fanboy.
- inactive, on 10/12/2007, -8/+16"Unless it's made by Nintendo, who has never sold a console for a loss..."
Their game consoles have been inexpensive to manufacture for a reason.
Personally, I don't understand what you're happy about here. If you're a Nintendo gamer, wouldn't you want Nintendo to slash the prices on their hardware even more so it costs less to YOU? I can't believe you're actually glad that this company is taking more money from you than they would if they sold the systems at a loss. What a tool. - aegis9975, on 10/12/2007, -1/+8Not sure why you got dugg down since you are accurate; it was only 90-days before they extended it to 1-year.
http://www.xbox.com/en-US/ZZZ+old+channels/howto/system/xbox360/warranty-xbox360.htm
http://news.com.com/Microsoft+extends+Xbox+360+warranty+to+1+year/2100-1043_3-6145772.html - piper999, on 10/12/2007, -1/+5Apparently MS stock went up after this announcement with people speculating that what is actually happening is that they are going to replace the current Xbox 360 hardware with an updated model.
I hope this doesn't happen.
It does seem a little worrying that both Sony and MS are looking at significantly reduced sales of their consoles currently. - inactive, on 10/12/2007, -1/+5ilyaq, I have to back up your comment. I'm a dedicated 360 owner, but what keeps me from getting a Wii is the inflated price and lack of great online functionality present on the 360, which I value to a great degree.
- 1InMany, on 10/12/2007, -2/+6Microsoft's losing money on their consoles, Sony's losing money on theirs - it's only Nintendo who have been making money on the sale of consoles ....
But over a period of time, it is the quality of games available for each of these that will determine their fate - and this is where Microsoft seems to have an edge with Vista round the corner and talks of 360 being used for IPTV ... in fact, support for gaming development is one of the very few things that are worth looking forward to from Vista ... - inactive, on 10/12/2007, -0/+4I like how the article says that these losses ate into the Xbox division's profitability, as if the Xbox division has ever been profitable.
- Yoshi39, on 10/12/2007, -0/+4Probably not but they weren't counting with the cost of repairing the consoles.
- Inverno, on 10/12/2007, -1/+4I would write a reply listing all the games that have been eating my free time lately, but I'm busy obsessing over the Crackdown demo.
- totorototoro, on 10/12/2007, -2/+5"There's a reasonable amount of inventory in the channel."
Read: We stuffed the inventory channels at the end of 2006 to be able to make our promise of "10 million Xboxes sold by 2006" come true. - Kxpuc, on 10/12/2007, -0/+3lol you think breaking isn't still happening tell it to the 15 ppl i know that's on their 3 to 5th Xbox360 and they are getting NEW ones not just theirs fixed for the most part. out of the 35 or so ppl i know with a 360 only 4 of them still have a working 1st gen 360
- godfa7h3r, on 10/12/2007, -4/+7I'm not sure if anyone actually read the article or if they just read the subject and decided to comment....
The Xbox division DID NOT post a $289 million loss. The Entertainment Devices division posted that lost which includes...
From the article:
"The Entertainment Devices division not only incorporates the Xbox 360 and software, but also the newly launched Zune media player, PC games, TV platform products, and mobile and embedded devices."
I'm going to go out on a limb here and blame some of that loss on the Zune which isn't selling so hot. - NSMike, on 10/12/2007, -1/+4@ilyag -
Do you have a good reason that every time you try to make a point, you have to toss an insult in at the end? - inactive, on 10/12/2007, -6/+9As I stick my finger up in the digg winds I have determined that the 360 is the first MS product that has a positive attitude consensus. One can almost imagine that alone being worth 1/4 billion dollars.
- medina8304, on 10/12/2007, -1/+4Have to agree with leolank, I’m on my 3rd 360 since launch date. PS3 might be crap but the 360 just keeps dying on me, can’t say that I’m overly thrilled because of it; I love the system, but can’t get more than 4 months of play out of it before the dreaded Red Ring of Death. I’ve got a Wii and think that it’s great but just can’t be bothered swinging my arms around like a maniac for every game, there are times that I want to be a couch potato and just work our my thumbs. Until they figure out how to make a decent console that doesn’t crap out they will continue to lose money, my original Playstation 1 still works flawlessly as does my PS2 both of which were brought on launch day and have seen thousands more hours of play than my 360.
- inactive, on 10/12/2007, -0/+3Unless you're Nintendo and are making nothing but pure profit off both Wii hardware and software sales.
- Harbinger67, on 10/12/2007, -8/+11How is this surprising? Game consoles are usually slow to show profit; the PS2 didn't turn a profit until just a few years ago.
- NSMike, on 10/12/2007, -0/+3@ilyag -
I didn't ask for an honest reason. I asked for a good one. - OneHump, on 10/12/2007, -0/+2Two things:
1. I'm not sure what is surprising about the XBox losing money. We all know that consoles lose money until they exceed their break-even attach rate. This normally occurs in year 4, when the 360 will be a cash cow.
2. That article seems to be slightly flawed. It claims the entertainment division made 2.63 bil. in profit. It then claims Microsoft made 2.63 bil, in profit. Does that mean that all of Microsoft's profit came from that division? Doubt it. - powrhousekrause, on 10/12/2007, -5/+7Wow, can't believe no one has thrown this out there yet, but you do realize the Zune is in the same division as the 360, while extension of the warranty and repairing consoles might have had some effect on the profitability, one might assume the Zune had a huge hand in the 289 Mil. loss.
- HappyScrappy, on 10/12/2007, -0/+2Uh, mine broke and was repaired and I'm not a "happy customer". It took a month to fix it, and during that time I still was paying for Live Gold and didn't have my console I paid for and missed Emergency Day, despite having a copy of Gears (it broke on Nov 7, the first day I had Gears).
Console not breaking -> happy customer - womfalcs7, on 10/12/2007, -5/+7@Tree
But do you have to spend that money on repairs and mistakes that shouldn't have been made during manufacturing?
And we are 14 months into the X360's release. - RedbeardUH, on 10/12/2007, -4/+6MSFT is a stagnent stock because it is up 30,000% since its IPO. That's some huge ***** bank. And its only been around for 20-30 years.
- sundancekid503, on 10/12/2007, -0/+2These "cut and paste" comments from schestowitz are annoying.
Can't you just write something normal like everyone instead of posting 20 hyperlinks and a bunch of oddly formatted "quotes" in every comment you post? - 0olong, on 10/12/2007, -0/+2It's amazing that Sony reports losses, and immediately, "Sony is doomed." "The PS3 sucks." "They deserve what they got." ad nauseum. The moment another game system causes losses, you find every excuse from "It's a young system still, they need time to reap their rewards." "Give them time.", and you bash the other guy who had nothing to do with their losses.
Every game manufacturer loses $$ on one system or another. Should I mention the Virtual Boy? To bash one and defend the other over the same news is hypocritical and childish. This is beyond normal fanboyism which is a healthy support of the console of your choice, this is Militant Fanboyism, which seems to be a norm in the Digg community. - Inverno, on 10/12/2007, -1/+3Wow, I'm just the opposite. I went through 4 PS2s (apparently those disc read errors were a problem on my end.) yet I'm still on my first 360.
On the Digg comments I've seen like ~30 who claim to be on their 3rd+ console. Assuming everyone's telling the truth I bet we can find that .25billion dollars in console sales alone. - Swift2, on 10/12/2007, -3/+5Hey, Sun Myung Moon has lost about $3 billion on his his investments in the perennial money-loser The Washington Times. But it brings more right-wing politicians under his wacky tent and ensures that he won't be sent to prison anymore.
Sort of like that.
The big problem with Microsoft is that they make so much money on Windows that they can just burn dollar bills in a huge pile to dominate other markets, or at least keep other people out. I wonder how much money they've lost on XBox One and Two? Sony can blow money too, since they make huge dollars in the, uh, copy protection racket. Meanwhile, Nintendo has to make a profit. Maybe that's why their machine is a genuine innovation. - ninjakoala, on 10/12/2007, -1/+3Yeah, for me the 360 is probably the second strongest performer of my consoles when it comes to good titles in a short period of time.
I've only had it since November and already I've bought 20 games as well as some 15 arcade titles. I can't remember having so much fun with a console since the Dreamcast. Achievements make me hunt out areas of games I normally wouldn't bother to visit, just because it's another goal which makes it a challenge.. and I guess somewhere in most gamers the challenge is what makes us play.
Microsoft went all-out to make a console for gamers in spite of all the HDTV, IPTV and so on. While I appreciate the video marketplace and all that, it's the core gaming functionality in the 360 that makes it an awesome machine for me.
For some the Wii will be the Next Big Thing. Heck, I had it pre-ordered and was excited about it as I was about the DS. After reading more and more about it I decided to cancel my pre-order though. A friend of mine has one now, and I've tried it. It's certainly different and it's also fun. Is it better or more fun, though? That's gonna be different for everyone. I think many of the experienced gamers will find that the 360 offers them a (I hate to use this term) deeper experience - in spite of Zelda and all that.
I know you can just control the Wii with tiny little movements, but where's the fun in that? Sometimes I just want to kick back and relax and still have precise controls. That's where the 360 comes in for me. I think I'll still get a Wii eventually, because I'm sure there'll be some title I can't live without sooner or later. But so far - for me - the 360 is the best console of this generation. Your mileage may vary. - Omega697, on 10/12/2007, -1/+3@ilyag:
Do you honestly think you're getting something for free with the "sell consoles at a loss" business model? Don't you realize that you have to pay for that at some point? It may not be directly to the manufacturer, but the games you buy will be more expensive because the publisher has to pay {Sony, Microsoft} more so that {Sony, Microsoft} can recoup the losses. This means one of two things: either you pay a higher price at the game store, or publishers will be less likely to experiment and innovate, because they have to sell more copies at the same price to make the same amount of money.
TANSTAAFL - crilen007, on 10/12/2007, -1/+3Sounds better the original way.
- inactive, on 10/12/2007, -6/+7A company typically will not make profit until they approach the end of the console's life cycle. That's normal. If we're just talking about the 360, I think it's a proven gaming machine that will become beneficial to Microsoft in the long run. This means little to me in contrast to where 360 is now and where it's going.
- gmallard, on 10/12/2007, -0/+1@macko
Yes it was confusing. Sounds like a very tidy profit to me. - VeryAngryJim, on 10/12/2007, -0/+1maybe they meant 2.63 billion in revenue, not profit.
- Thors1982, on 10/12/2007, -0/+1I am sure most of us were smart enough to realize
They meant to say increased the warranty by 9 months
Also the original was a 3 month warranty - apoc06, on 10/12/2007, -0/+1lol @ copy protection racket.
did you know that microsoft is more responsible for the current state of DRM than any other company? - jmaynardg, on 10/12/2007, -0/+1"According to Microsoft, repair expenses and the extension of the 360 console warranty from nine months to a year in the US and Canada ate into the division's profitability."
Nine month warranty? That should read "30 day warranty" prior to the extension. Where did "nine months" come from? - Sabin, on 10/12/2007, -1/+2"I often feel like I'm surrounded by idiots and it gives me pleasure to destroy them with my logic. Adding an insult is just the icing on the cake."
Nothing quite like adding in an irrational statement to hammer home a totally opinionated logical comment. Yes, thats an oxymoron....tool.
Get over yourself. - hode, on 10/12/2007, -0/+1Nintendo stock is skyrocketing. NTDOY is the symbol to buy if you're an American.
- HappyScrappy, on 10/12/2007, -0/+1I believe it's the Xbox + Zune division, not just Xbox.
How do you reconcile the 1st and 4th paragraphs:
"Microsoft's entertainment and Devices division has posted a US $289 million (EUR 223.6m) loss for the second quarter"
and
"Despite the US $289 million loss, the Entertainment Devices division was responsible for US $2.63 billion (EUR 2.03) profit during the second quarter."
Which is it? Loss or profit? - Toast1185, on 10/12/2007, -0/+1No, it means they have to further prorate the cost of the warranty into their current and future estimates. The way accounting works is that they make a guess (number of units * average rate of defection) and post that to their sheets. This number is then revised once the actual numbers come in. In the case of this quarterly statement they had to incorporate the increased repair expense (previously unaccounted for from expired warranties) and also guide lower in the future.
- Lynn, on 10/12/2007, -0/+1Microsoft made $11.91 Billion in profit last year not 2-3 Billion.
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