Re: Microsoft is in deep trouble and now it is going to die


John Slade wrote:
"KDT" <scarface_74@xxxxxxxxx> wrote in message

http://www.informationarbitrage.com/2007/04/msft_and_japan_.html


Ten million Xbox 360s have been sold as of January 2007. There were 24
million Xboxes sold. That makes the Xbox 360 the current champ among this
generation of consoles. It's contemporaries are the Wii and Playstation 3.

Lets see where to start...

1. Each XBox is sold at a lost, the original poster said that the
video game industry was "highly profitable" for Microsoft.

2. The Playstation *2* is still outselling the XBox 360.
http://www.iht.com/articles/2007/01/12/business/game.php

3. The WII is currently outselling the XBox 360
http://www.newsfactor.com/news/Nintendo-Wii-Outsells-Xbox-and-PS3/story.xhtml?story_id=10000BCKRKVO

4.There have only been five million XBOX 360's sold (see above link).
But if you want to include XBOX+XBox 360 you have to compare it to
Playstation 2 + Playstation 3 sells. The Playstation 2 sold well over
100 million units by itself and is still outselling the XBOX 360.
http://www.joystiq.com/2007/03/04/playstation-2-thriving-or-failing/

5. The WII makes money on each unit sold.
http://www.gamespot.com/news/6157690.html



"Gaming has been a disastrous endeavor for Microsoft, particularly
from an investment perspective;"

"Well, after five years and over $21 billion invested all they've got
to show for it is $5.4 billion of cumulative operating losses, and
Xbox 360 doesn't appear to be the silver bullet to turn things
around."

Microsoft will make the money back in sales of video games over the
long term. Sony is losing money on each Playstation 3 sold and I'm sure the
Wii loses money too. That money will be made back over the years in game
sales.

During the whole XBOX lifecycle. Microsoft *never* made a profit on
the XBox even after including revenue on the games. The playstation
*2* is still profitable for Sony.





I also find the numbers suspect as they do not show net profits and
losses. I read in this article on Gamespot that Microsoft's Home and
Entertainment division made a profit. So how does that square with your
figures?

http://www.gamespot.com/news/6117307.html?&print=1

You did notice that this article was in 2005, didn't you?


I think this is another Mac kook attempt to skew numbers to make
Microsoft look like it's loosing money like crazy.

So I guess MS is also a Mac kook. Since their own 10-K shows that the
Entertainment division lost money.

No one said that Microsoft is losing money. The discussion was about
the XBox ("Home and Entertainment Division") losing money.

Here's another article.

http://www.gamedev.net/community/forums/topic.asp?topic_id=317219


And look at the *title* of the article. "Xbox Posts $164 Million
Operating Loss"
Isn't that what I just said?

But why go by what gamespot says? Look at Microsoft's 10K
http://google.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=4622672&Type=HTML

Home & Entertainment
2004 - $1.337 billion loss
2005 - $.485 billion loss
2006 - 1.267 billion loss
>


Bottom line is Apple moved into moneymaking markets.

Even if you take away iPod sells, Apple would still be more profitable
than every other computer manufacturer except for Dell and HP. Just
look at the financial statements from Gateway and Toshiba (the other
two companies in the top five). Or even Sony and Lenova.

That's because Apple is good at selling to a group that will buy
whatever they sell no matter what. It helps to have some kooks to buy no
mater what.

Apple just announced it sold it's 100 Millionth iPod. Most iPod users
are Windows users. So does that make everyone who bought an iPod, a
kook?


Microsoft moved into moneymaking areas like video game consoles and
games.

Since when was a division that loss $1.2 Billion dollars in 2006 a
"moneymaking" area?

When the item they take a loss on is a video game console and they
sell games for it. That's exactly what other console making companies do.

Not Nintendo. But Sony at least made up for its losses through video
game sales during the PS2 generation and now the PS2 sells at a profit
and is still the number one video game console,. Microsoft *never*
made money on the original XBox, including licenses.

.

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