Microsoft Profit Up 11% Despite Xbox Problem

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Microsoft announced that its profits for the last quarter rose eleven percent despite having to set aside $749 million to cover future Xbox 360 warranty repairs.

The world's biggest software company, which closed out its fourth fiscal quarter, said profits were dented by a reserve to repair or replace flawed Xbox gaming consoles, subtracting US$749 million from net profit. Revenues for the three months to June 30 increased 13 percent to US$13.37 billion.
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I can't even come up with a good reply for this.......so here is a bad stab.

I guess comparing the effect on Xbox to Microsoft's revenue stream is about like comparing the amount spent by Exxon on hookers and blow.

A small drop in the bucket drop in the bucket when you have other cash printing devices.
 
This is why MS will never lose the console war. Sony may one day fail, as may Nintendo, but MS has the cash and monopoly on NEEDED everyday devices with no direct competition. Sony is losing money in almost every division, and those that are making money, are not making enough to ofset the PS3 blunder. Nintendo will continue to be happy right where they are...as they should be.
 
Sepiroth187 said:
I can't even come up with a good reply for this.......so here is a bad stab.

I guess comparing the effect on Xbox to Microsoft's revenue stream is about like comparing the amount spent by Exxon on hookers and blow.

A small drop in the bucket drop in the bucket when you have other cash printing devices.
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20% reduction in net profit is not a drop in the bucket drop in the bucket. Not sure what gave you that idea. MS has enough money and other business to keep losing on the X360 forever, but would they? Why would they? One day a director, shareholder, etc. is going to ask, what are we spending money on this for?
 
And I know it was a bad stab (damn no edit button here). Just wanted to point that out with some numbers :p
 
Must be nice to swing 1 billion dollars and still have it make no impact on your quarterly numbers.
 
The simple way to read that: "Even with the Xboo-boos, we're even richererer!!!" or something to that effect. :)
 
Being an executive or significant shareholder of MS is a license to print money. I wish it was cheap enough for the little guy to buy a piece of. *sigh* The burdens of having been born about 10 years too late. :(
 
Yes, the Xbox money set aside did cost them a decent drop in the bucket, but that doesn't mean they will spend all of the set aside money for console work.

Investors/directors will allow this process to go on for several more years. MS does things for the long haul and if you invest in Microsoft you know this and your also aware that they will run Sony out of business or relegate them to nothingness status.

Don't compete against the Nintendo you can effectively separate console gaming into two categories, leaves the anti trust people on the sidelines.

You can then expand the Xbox offerings and achieve the ultimate MS beat off feast.

Person coming home, setting their Zune down, firing up the Xbox and streaming movies/tv shows from the MS home server which recorded the shit all day to your tv.

That is what MS is in for, the belief a director is going to try and stop it isn't going to happen.

Sony doesn't have the cash cows to back itself up. Nintendo has the entire Gameboy line.
 
Ockie said:
Must be nice to swing 1 billion dollars and still have it make no impact on your quarterly numbers.
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I still don't get this mentality. I know MS still made money, and they still had a good quarter, but this is ridiculous to say it made no impact.

If not for the Xbox 360's extended warranty, Microsoft would have posted $0.39 in diluted earnings per share, a 26% increase over the same period last year. Instead, the console accounted for a $0.08 drop in diluted earnings per share, leaving Microsoft 21% short of their estimates.
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That is an impact for sure. http://communities.canada.com/share...ngs-slashed-due-to-xbox-360-repair-costs.aspx

Of course such a hit at any other company would have crippled them, but MS luckily has other good businesses to buffer the 7-8 billion lost (total) on the Xbox.
 
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