Microsoft recently made some pretty big statements regarding the console wars, and one of them is a bit surprising. Revealed in the article is the fact that hardware sales have now reached 17.7 million (though shipped vs sold was not mentioned). They also claim that "We've taken 42 per cent revenue share of next gen-games market – including hardware, peripherals and software" and that their hardware attach rate is over 7 games per console sold. Now, those are some impressive figures, but as any business student will tell you, there is a big difference between revenue and profit, and you wouldn't announce the least preferable if you had the more. So Microsoft, when are you going to stop telling us how awesome you are and prove it by making some real money?
Reader Comments (Page 1 of 1)
3-12-2008 @ 3:43PM
bigmac375 said...
and any business student with remote knowledge of how the gaming industry works will tell you that microsoft needs to extend this console cycle as long as possible.
3-12-2008 @ 3:48PM
Bluemanrule said...
As a former business student, I can tell you that even with low profit margins, a 42% increase in revenues substantially affects the bottom line. Remember, MS is rolling on 2-3 consecutive quarters of profit. They'll need to extend that another 20-30 months to "win" this generation.
3-12-2008 @ 3:50PM
FordGTGuy said...
With the Attach Rate and sales number of the Xbox 360 I can believe it.
3-12-2008 @ 3:52PM
ericdrum said...
Did Ken Weeks get hired back here and change his name to Terrence Stasse?
3-12-2008 @ 3:54PM
Garrett Hedley said...
They don't need to make money, they're Micro$oft! They just throw themselves into a new market for the hell of it. lol
42 is a good number, though...
3-12-2008 @ 3:55PM
Terrence Stasse said...
Wow, the business students really came out of the woodwork for this one!
And who's Ken Weeks, and why does that matter?
3-12-2008 @ 3:59PM
ericdrum said...
Ken used work at X3F and seemed to post a lot of anti MS stuff and flame bait. This news post seems like flame bait to me.
3-12-2008 @ 4:02PM
Terrence Stasse said...
It wasn't intended to be flame bait, I just think it's a bit silly to champion revenue when profit is the goal of business.
But then I'm an art student, not a business student.
3-12-2008 @ 4:11PM
fulci zombi said...
Well, the two are not unrelated you know.
3-12-2008 @ 4:16PM
Tony said...
Yeah, but there's also clearly a reason why MS never actually references the profit margins. Let's not be totally oblivious to that.
3-12-2008 @ 4:19PM
CB17 said...
I think Microsoft understands the difference between profit and revenue, but I don't think that was the point of their statement. The point of their statement was to show how much better they're doing then the competition, in which case, profitability is irrelevant.
3-12-2008 @ 4:21PM
ZEBRA NINER said...
Yeah Terrence... you freakin' flame baitin' son of a bitch! You get off on starting little flame wars? Sitting in front of your computer pleasuring yourself to the heated debates that you cause!?
haha! ;).
Companies are always going to spin everything in their favor, it's the way of the world!
3-12-2008 @ 5:11PM
jkdoug said...
Microsoft has to be making more profit on the Xbox 360 than Sony is on the PS3, but I highly doubt either is beating Nintendo on the Wii. Production costs on the Wii have to be lower than the other systems, which should translate directly into more profits, right? If only they'd actually make and ship enough units that I could find one in the damned store!!
3-12-2008 @ 6:35PM
Syn said...
@jkdoug
You do know Microsoft was losing $715 per console when 360 was released.
Sony was losing $307 per console, when it was released.
Do the math.
3-12-2008 @ 11:35PM
Jay said...
@syn
Source? I'm fairly sure microsoft's console cost around 700 to make for them at launch, not selling at 700 for loss....
3-14-2008 @ 1:50AM
99charlie said...
Losing $715 dollars, lol. That would mean it cost them over $1000 to make one? lulz.