Microsoft Finally Makes Full-Year Operating Profit on Xbox 360

It's taken them a few years, but Microsoft's gaming division has finally posted an operating profit for its full fiscal year.

[dktxx2]

They would be making more money if they stopped spending all their money on exclusive DLC and timed exclusives.

[Dark vader]

Yea they made some money but they still in the red. The lost billions on the original xbox, plus another couple of mill from RROD.

[rroded]

"rising from a loss of almost $2 billion last year to a $426 million profit"

I mean hasnt rrod alone cost em over a billion? Let alone all that cash they've been throwing around on dlc and multiplats. They spend money like its water on advertising and their operational costs cont b cheap.
All i can say is thats a lot of cash for 3 or 4 million live accounts and 7 or 8 million 360's sold this year. (Ya software too but still seems short to me)

[Qdog]

Yeah, I find it soo ironic that the masses gave Microsoft brownie points for a warranty upgrade, when in actuality they were avoiding a full on class action suit, and forcing the consumer to pay for online play. So it's not surprising that they are finally in the yellow, from the backs of the wonderful gamers...

[deeznuts]

Technically, they pulled a fast one on us. They did it legally and according to GAAP, but think about this. Dont' even think about this, just read it.

They took a $1 billion charge right on the last day of the last fiscal year for FUTURE RROD claims. Yes FUTURE, which means they didn't incur these costs, YET. Since they were already at a $1B loss, they tacked on another one. Smart move accounting and financial wise, and again, perfectly acceptable.

But any financial analyst worth his salt, would look through this. First, take away that $1B charge last year, so that leaves a loss of $1B last fiscal year, not $2B. Then look at what they actually incurred this year in warranty claims, that they did not offset against current income, but against that charge they took last year. That'll give you a more accurate number, not this $426M.

Let me see if I can find it.

EDIT: Still looking, but MS has shipped 20.3 Million since inception according to their earnings releases.

EDIT #2: Can't find it in their 8-K, going to have to wait until their 10-K or 10-Q.

[Gam71]

wow look at all you financial experts.

No doubt ps3 fans which is surprising after reading comments from ps3 fans make you all sound like you're 12 (nasim)

the point is on losses, rrod, (when 1bil is set aside thats what it is, set aside to cover past and future rrod so only needs to be counted once) etc the still made 1 year without losses.

Has £ony done that?
Come on you financial experts. Spin it so that £ony's losses are actually a good thing. I bet if they said we still haven't made a profit you would spin that so they are beating M$.

The ps3 has almost wiped out ALL their ps2 profit.
Thank god for the ps2 and psp.

I wait to hear how you'll spin that.

[kewlkat007]

I think that's what it has taken to break into the industry, I mean if MS have not done what it has and used what it has a lot of, then they would of been dead if you ask me.

It's all about he brand name and bringing the big franchises to your console, so fans and new gamers can have a choice, to choose that favorite game or a new console. MS had to use it's pockets unlike no other could and thats what they been doing.

Of course There has been many sacrifices made. Hey, in stiff competition, sometimes you things you never thought you would of to try to get your name out there.

It's safe to say, MS took some big name games away from Sony, so that alone has to be costly. Now, I think MS should focus on bringing new games with more studios while diversifying the Xbox brand. The console is no longer just a "shooters" console. XBL is re-establishing itself and bringing some new things. It's also bringing new stuff for casuals and hardcore gamers you name it.

More 1st-party games are still needed. Cheapen XBL a bit and the accessories and you will continue to make money.

[Says you]

They made and buy another exclusive considering they are to cheap to buy there own game studio and spend it again on "RROD".

[GiantEnemyCrab]

Reported as stupid.

Juuken: Besides the piss poor grammar read what this person said. They are too stupid to buy their own game studio? MS owns game studio's. They will just spend this "profit" on RROD? Are you for real? You think they are going to spend more than the 1 billion they've already spent on RROD? That is old news. There is some liability with owning your own studio's. If MS can get exclusive game's made by third/second party developer's why not?

[juuken]

Crab, how exactly is that stupid? Microsoft needs their own 1st party games. I think that would help them in the long run?

Lol...you are so damn brainwashed.

[karlostomy]

Are you an idiot, princess?

Calling Crab brainwashed, when his post makes absolute sense?

At least he has a point, whereas you are just venting your personal frustrations again.

Damn I wish you'd be sensible at least some of the time.

*shakes head in disbelief at Juuken's Idiocy*

[Gam71]

Juuken, the voice of reason...

If you're Nasim.

[juuken]

"Besides the piss poor grammar read what this person said."

I read what they said clearly and they have a point. If Microsoft has their own gaming studios, then why do they feel the need to buy 3rd party exclusives?

"They are too stupid to buy their own game studio? MS owns game studio's."

Again, if they own gaming studios, then why don't they come up with their own IP's? I could own something but if I'm not doing something with it, then we have a problem.

"They will just spend this "profit" on RROD? Are you for real? You think they are going to spend more than the 1 billion they've already spent on RROD?"

Um...yeah. Because the RROD is still an issue. They may have fixed some of the problems but it's still an issue.

"That is old news."

In your own delusional world, that's old news. In the eyes of sensible people, it's not old news.

"There is some liability with owning your own studio's. If MS can get exclusive game's made by third/second party developer's why not?"

Why not first party? 1st party is more important than 2nd and 3rd party combined. If you can successfully create a game that leaves people wanting more of that game, then 1st party can work. If I'm not mistaken, Sony has around fifteen studios working on first party games.

Which party do you think will sell the most consoles and software when it's all said and done?

1st party.

You bots never think straight, do ya. And I'm literally laughing over here because Nazi boy and Gam over here followed your comments blindly without thinking outside of the box.

Blind ass bots. That is all.

[syanara]

I've noiced you around here alot and I have to say you are not the kindest of people. you've spammed in the comments section you've pissed people off, you start console wars when you can I mean honestly I doubt you are a real gamer

Here is what a REAL GAMER is

A real gamer is someone who dosen't say something pointless when they read an article for example a real gammer who would read a article that says 'gears of war DLC announced' would say something like ' interesting I wonder what they have planned in terms of maps, characters, or story.' and would not say something like 'HA M$ trying to fight a console war with DLC ha FAIL'.

A real gamer is Fair. he dosent blast his voice or endlessly taunts the other players in an online game. a Real gamer is not nessicarily one of the most skilled players ever but hes not the worst player either. a real gamer is someone who plays both pc and console games, and finally a real gamer is someone who always has fun. weather hes getting killed in a game or being insulted cause he has a different opinon than someone else he doesn't care a real gamer is mature

[juuken]

"I've noiced you around here alot and I have to say you are not the kindest of people."

I am not kind when people talk crap and they always have to make a negative out of a positive.

"you've spammed in the comments section you've pissed people off, you start console wars when you can I mean honestly I doubt you are a real gamer"

I don't care who I piss off these days. I tell it like it is. I let people know what is on my mind. If I have something to say, I will say it. If you can give me a well rounded argument as to why I'm wrong, I'll respect you for that. But if you can't do that, then that's your problem.

I don't see how this refers to me not being a *gamer* as you so claimed.

"Here is what a REAL GAMER is

A real gamer is someone who dosen't say something pointless when they read an article for example a real gammer who would read a article that says 'gears of war DLC announced' would say something like ' interesting I wonder what they have planned in terms of maps, characters, or story.' and would not say something like 'HA M$ trying to fight a console war with DLC ha FAIL'.

A real gamer is Fair. he dosent blast his voice or endlessly taunts the other players in an online game. a Real gamer is not nessicarily one of the most skilled players ever but hes not the worst player either. a real gamer is someone who plays both pc and console games, and finally a real gamer is someone who always has fun. weather hes getting killed in a game or being insulted cause he has a different opinon than someone else he doesn't care a real gamer is mature"

And that is your definition of a gamer. Don't force your beliefs on me. A gamer also defends a console he/she likes and lets people know why he/she likes that console. A gamer is someone who can point out the negatives and positives of a system. A gamer is someone who is vocal and has an opinion because there is a law for freedom of speech. A gamer does have fun, however he/she does not stand idly by while another group makes fun of the system he/she likes without merit.

Believe what you want to believe. I've been playing games for years and I grew up with the Sony brand. I strongly believe that the PS3 will succeed this year and next year and that won't change anytime soon.

Don't piss me off and I won't piss you off. But don't expect me to keep my mouth shut.

[syanara]

and that is why you fail

but seriously though I understand completly that you belive what you want to belive and what not I was merly remarking upon the fact that its annoying when ps3 fanboys like you spam and everything. I am a ps3 fan myself but I think if you really want to support sony do it with out pissing anybody off because its fanboys like you that give sony a bad name I I know its rude to say that but I seriously think its wrong to just insult people like that all the time all I'm saying is try to take it easy, is someone disagrees with you, insults you, or whatever don't go all up on them and piss them off cause what does that do? it makes a huge console war and where does it get you? NOWHERE

trust me I know first hand I was a complet ps3 fanboy i didnt want to see the other way but I found that arguing got me nowhere well I am just passing the advice to you sorry I may have insulted you in there but I waas trying to not only make a point but express a point

EDIT: remember this: "I AM A F*CKTARD MUPPET WITH A SMALL LITTLE WEE-WEE." that is stuff that is just plain stupid and wrong

[juuken]

I'm sorry, but you're implying that I'm wrong for saying that when you have someone running around with a troll account talking about my *smelly cunt*? I don't take too kindly to things like that so I tend to retaliate. You want to fault me for saying something like that and yet you can't even see that 360 fanatics have been creating troll accounts lately to harass PS3 owners? I'm sorry but I am a PS3 owner. I don't take sh*t from nobody. I've been bullied by guys back in my elementary/junior high school years and that has toughen me up a lot.

I'm glad that you don't argue with people. That's your choice and I respect that. I don't start with people unless they start with me. Don't screw around with me and I won't screw around with you. You want to defend your 360? Fine by me, but don't insult my weight or physical attributes.

That's just as bad as saying I suck for buying a PS3.

You're trying to make me out as a bad person but I'm not a bad person. I'm just someone who has a nasty temper if you piss me off.

You respect me, and I will respect you. Talk sh*t about me, and you'll make an enemy out of me.

That's the way it is.

[Isaac]

Only 5.5 billion more to go to recover what they have lost since the Xbox project started in 1999.

[TheColbertinator]

Microsoft has payed dearly for the Xbox name.Hopefully with increased revenues,we can see more original IPs and new game studios instead of buying exclusive DLC or multi-plats.Maybe now Microsot will develop a strategy more focused on consumers rather than statistics.

[Isaac]

There should be a law forbidding third parties from entering into monopolistic contracts with any console manufacturer. Hell, 3rd parties should be forced to be consumer friendly, as in publishing in every console, letting first parties make the actual difference instead of buying timed exclusives or extra DLC.

[Bzone24]

So you'd like to see MGS4 on the Xbox 360 and the Wii?

[TheColbertinator]

@Bzone Well yes.Why should anyone be deprived of playing one of the best games this generation.MGS4 is remarkable and the more people play it,the better.However remember that its up to third parties whether they want to develop for another console at all.

The creators of Wardevil could not find a bugdet necessary to pay for game makingm on 360 and PS3 so just opted for PS3.MGS4 is a two sided coin because currently you need a PS3 to play that masterpiece.

@Isaac The forcing developers idea is a little anti-capitalist but plausibe.

[syanara]

lol I thought there was a law already against bribing companies but apperently not. lol

@2.4
yes its true different consoles should not be deprived of a game but then again that also depends upon if the game is physically able to be done on that console. see in the case of MGS4 it would A, cost more money to develop it for the 360 and to manufacture the multiple disc to fit the game and B be toned down in terms of graphics and what not.

[tako2000]

Wait, aren't MS already become profitable since last year???

[BISHOP-BRASIL]

Not while bleeding money.

And just for the record, those so called statements come from internet from internet distorted info.

I would love to know where they are including MS bleeding money over Rock Band 2, GTA IV DLC, 360 warranties...

Don't get me wrong, calculating Sony numbers would be just as much inaccurate.

[Gam71]

Yeah they would show sony has mega losses but everyone here would twist it so it's actually profit.

Which ms has made for a year.

[Xbox360 Mujahid]

OFC Microsoft the non satanic company will make money and they will keep making money cuz they're not satanic !
unlike the satanic infidel SONY !
Sony is owned by satan and chuck norris !
INFIDELS !
they make infidel evil games ! KILLZONE 2 is a killing simulator ! killing is forbidden ! killers will go to hell and burn with satan and sony and chick norris !
INFIDELS !

X360 FTW

[PumPum]

IMO it should be counted as profit when the ~7billion loss is made back.
Good to see that they are filling they holes.

[Gam71]

This is operating profit for last year.

Read it thoroughly.

But going on what you said it should also be that sony post operating and overall profits and losses for just the ps3 and not include the ps2 and psp, the way ms don't include pc gaming in it's 360 reports.

If people think I'm deliberately hating on sony then thats not true.
It's just there are a lot of ps3 fans on here posting nonsense and trying to ruin some good news for 360 fans and that's well, typical, and not wanted.

It's these nay-sayers i'm hating.

[TitanUp]

hey monty i wont buy 360 cause of rrod and no free online playing online is one of my fave things to do and i see no reason to have to pay for it never did on pc and shouldn't on game systems. but anyways good for msoft they sure did themselves good with gears of war that game looks bad ass.

[Monty_The_Great]

to each his own.

[Atomic]

like that guy who bought a $30k car and then sold it for $5k , he made some profit.

[Aclay]

I'm pretty sure that Microsoft can afford to drop the Xbox 360 Pro's price permanantly to $299 and they probably can afford to drop the Arcade model to $249 if the gaming division is posting a profit. I have a feeling that Microsofts greed might come back to haunt them and just may cost them second place in the console war against the PS3.

It's obvious that Microsoft wants to milk the Xbox 360 at it's current price for as long as they can and probably wont drop the 360's price again in the U.S. until Sony drops their price on the PS3 because Microsoft knows that Sony isn't in the position to drop the PS3's price and that's why they aren't dropping the 360's price permanantly because they know that they will be able to make more money from the sales on the 360.

In my eyes, if Microsoft was actually trying to extend their lead over the PS3, they would have made the price drop on the 360 Pro model permanant instead of a liquidation sale. After all of the 20GB 360's priced at $299 are gone, Microsoft will be back where they were before, and before the PS3 was outselling the 360 in the U.S. when the 360 Pro was $349.

[Zeevious]

Wasn't this article already posted almost a week ago?

http://n4g.com/NewsCom-1717...
http://n4g.com/up/ActionRed...

I remember posting both additional financial details and references from the Gamasutra article:
http://www.gamasutra.com/ph...

These details might be helpful for anyone taking a closer look at their profits.

[power of Green]

Holy GOD am I in the wrong section?.

I'm getting sick of this PS3 news ;)

[tobin_blade]

Well they certainly aren't struggling for cash, and as Sony had a few year head start on MS (xbox) they had to invest big to catch up.
I would say at the moment the 360 and the range of games coming out on the 360 they have done just that - this time next year we will be saying 'remember that sony playstation, that was good for a while' - hahaha!

Nice one Microsoft.

[THE_MACC]

nah mate in a years time we will be going. "Wow MGS4 is still the only thing worth getting and PS3 for".

[dude_uk]

err.... no

YOU FAIL!!!

[socomnick]

hes actually right.

[dude_uk]

no he's not right..

both platform have their own good games...

PS3 doesn't only have MGS4..
and 360 doesn't only have Halo 3..

so you both fail and stop being blind fanboys

[karlostomy]

You can say what you like about MS, but they sure know how to improve their business.

Xbox1 lost $4 billion in first generation.
BUT Xbox360 already in full year profit not even halfway through 2nd gen

On the other hand, Sony seem to be going backwards:
Ps3 lost nearly $4 billion so far
http://www.n4g.com/industry...

Well done MS.
Sony... what happened?

[tobin_blade]

Shut it!

[Fatmanp]

You all moan but the big difference between MS and the rest is that all of this money is put back into aqcuiring exclusives and DLC to make the gamers experience better. They have one of the best R&D teams for Xbox Live.

The reason the PS3 is a 10 year console is because Sony want to make all of their money back. MS is still trying to please the gamer.

[Taker_129]

If Microsoft was trying to please the gamer their online service would be free. If they were trying to please the gamer, they would have fixed the RRoD along time ago. If they were trying to please the gamer, Items on the Marketplace would be priced in accordance to the amount of MS points they sell. If you think Microsoft cares about the gamer you are a fool, because to them you are nothing but profit and the same goes for sony and Nintendo. This is a business! And all these companies care about is your money, nothing more.

[xboxlover]

This is in response to xbox360 mujahid. I love the 360 and onw one myself. but calling sony satanic because killzone 2 is a "Killing Simulator"? what do you call Gears of war, or halo. or any tom clancy game ever made. get the facts straight. if you call one shooter a "Killing Simulator", you may as well call them all that. i love those games as much as if not more than the next guy. as for the point of MS making a profit on the xbox would you like to not have your 360 fixed or replaced for free. or would you rather pay hundreds of dollars to get it fixed. that is where most of the money is going, but hey that's just one guy's opinion. also PS3 sucks. thay can make a zillion dollars and not be on the same level as MS. Sony coustomer service BLOWS CHUNKS. i know. my PS3 broke after about 10 hours of playing it. Xbox support helped alot more when i got the RROD. so i guess what i am trying to say is that sony sucks. really badly. MS has had it's troubles, but in the end they will have the biggest number of kics a** games. the PS3 will burn in hell, but not because it is "Satanic". That's BS

[SSCOOLCHEA]

Of course its going to break after 10 hours since you have the xbot sitting right next to it. There's enough heat in that xbot to warm the Artic . Even as much heat the ps3 can take ( already proven ) the ps3 is no match for the xbot heat . Is this the reason why we have global warming the last couple of years. Global warming was never an issue till the xbot came out .

[fire23]

People have to realize that MC is spending like crazy to get almost 0 profit now(buying out 3rd party DLC and bring PS exclusives to there console) . You have to realize that there positive quaters are based on 3 things, insane overpricing of peripherals, Xbox Live, and thirdly games like Halo 3. Halo 3 was first party so they made pure profit on it. Now Bungie is a second party that means that the profit rates dropped to about half if not less.

[three304]

It said gaming division posted profit not the 360
I haven't seen any news about the 360 posting profit, just micorsoft gaming (pc xbox etc)

[three304]

that title is misleading

[flexbox360]

now if i can get a cut of their profit. but i wont. so i dont give a flying f**k. why should i?

[RAM MAGNUMS]

Freedom of speech gives Rights for freedom of Death!
fight the power!
we got to fight the powers that be!
Xbox360 was hyped by a selfmade economy on the image of bill gates.
he sells his weak sh.. & everybody want to be like him but keeps buying that weak
sh..
Then red ring! the high is over & wheres Metal Gear, you wake up & start
crying to max & threatening to buy metal gear if you don't get your Coffin.

Some gamers.
Ps3 Wants You to Die only once & wake up in a Galaxy with your concious is
FREE.
BeyonD.

RAM MAGNUMS Slicing Install Bases IN Half!

[THAMMER1]

Wow M$ is doing pretty good. Helps when the competition seems to have no clue.