Software giant records record revenue and better than expected earnings thanks to healthy Xbox 360 sales; stock gains on the news.
Microsoft reported a drop in profit for its fiscal second quarter Thursday, but sales and earnings beat analyst expectations thanks to strong sales of its Xbox 360 game console during the holidays.
The company reported record quarterly revenues of $12.54 billion, up 6 percent from a year ago and ahead of the $12.09 billion expected by analysts.
The stock rose about 1.9 percent in after-hours electronic trade.
"Revenue looked pretty good," said Rich Williams, analyst with ICAP. "We already knew Xbox sold well over the holidays, and we knew they lose money on every one sold, so that wasn't a huge plus. But the deferred revenue they reported was much higher than expected at $1.64 billion - very strong."
The Redmond, Washington-based software company reported earnings of 26 cents per share, compared to the 23 cents per share expected by analysts polled by Thomson Financial. A year ago, the company earned 34 cents per share in the second quarter.
Companies, particularly public companies like Microsoft, need to grow.
i mean its pretty simple, they spent close to 30 billion in acquiring activision, they thought they'd make it bk no problem, and that didnt happen.
its just shit that because of MS's miscalculation alot of people lost their jobs.
They are going to use AI for a large portion of the game development process. Upper management need bonuses and the shareholders need more money. So, people will lose their jobs.
They shouldn't have bought any studios. Some is okay...but they went on a shopping spree...stupid
The better question is why did Microsoft buy publishers for a service they were subsidizing they knew couldn't support.
And why are so many websites trying to make people feel sorry for Microsoft instead of truly criticizing the fact they are closing studios and killing jobs that would have been fine if Microsoft themselves hadn't gotten involved.
Quit feeling sorry for Microsoft and start feeling sorry for the industry and the all the gamers who are actually losing out.
THIS IS MICROSOFTS FAULT.
The first thing that happens after any major acquisition or merger is a consolidation of the whole new portfolio, which includes cutting any excess, bloat or portfolios that don't fit the larger MO of the big boy. So far, it's been par for the course with Microsoft and that's why gamers have been so against this acquisition. Tango Gameworks is the beginning. You think Microsoft wants to pay to keep small timers like Ninja Theory in business?
There is absolutely zero evidence to suggest that Microsoft will improve any of these studios, but plenty to suggest that they will get rid of what they don't need and hold onto the IP. The real agenda of the acquisition was always to acquire The Elder Scrolls, Diablo, Fallout, Call of Duty, Candy Crush etc. that will create millions in passive revenue stream for Microsoft regardless of where the games release. Microsoft simply wants their cut.
Because of Games Pass Microsoft has no interest in investing in new IP which is risky and requires creative talent they can neither nurture nor manage. Game Pass has also not grown in the way Microsoft expected it to, even post acquisitions. Therefore the logical thing to do, without serious money makers to release, is to cut as much cost as possible.
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Keep in mind that the Xbox360 hardware and software are making a profit. Do you really think Sony will compete at their price ($500 - $600) with no price cut in sight for at least another year (from today.)? While Microsoft can lower the price (two to six months from today)of the Xbox360 to anywhere from $50 ($249 - $349.) or $100 ($199 - $299) dollars.
but the Xbox 360 shares its budget with the Zune and the rest of the new Microsoft entertainment device projects.
We have evidence that the 360 is sold at a $70 profit, but Microsoft says that they're sold at a loss in this interview? Was the old data flawed?
I do have to remind people that lowering the price of a console doesn't necessarily mean it will sell more. The Gamecube actually had its sales plummet when its price was dropped to $99.
If consumers only purchased the cheapest products, we'd all be at Walmart and everyone else would shut down. If Microsoft drops the price too much it would signal to consumers that they're intimidated by the PS3 and that their console is inferior.
Why is the Wii sold at half the price of PS3? Because it's inferior. The same mindset ends up traveling between products. Sony on the other hand has the luxury of benefiting from a price drop since it will always be more expensive than the 360. If you need reference as to what's going, just look at the Dreamcast.
Judging by their conservative forward guidance it looks like they're planning for slow sales for the next few months (barely a million) because they are more interested in short-term profitability.
http://news.com.com/Microso...
Lets face it, 100k $800 PS3s in UK, 1 million total for the Pal-lands and slow PS3 sales in US and Japan are hardly an incentive for MS to cut prices early.
Looks like they're going to wait and see if Sony implodes before cutting the price.
Like they said last year: "Sony already gave us our price cut."
...world domination! Everyone will have Zunes and 360s and Windows, and Bill will case himself in gem-studded solid gold as he stands astride the globe like Zeus come down from Olympus, and we shall worship his geeky countenance forever!
Just kidding...a little. I do like my 360, tho.