Microsoft just released their quarterly earnings after market close.
The following results are focused specifically on the Entertainment and Devices division responsible for the Xbox360, Zune and other such hardware, the story was mixed.
While sales in the division were up 76 percent over last year, the division’s financial loss was also up 3 million to 289 million. The Entertainment and Devices division however now makes up 25 percent of Microsoft’s total sales which is up from 15 percent last year.
Microsoft also cut their shipping forecasts for the Xbox 360 to keep in line with the sell through rate at retailers. This move is also in an effort to make the division turn a profit in 2007. In the original shipment forecasts, Microsoft predicted 13-15 million Xbox 360’s would have been shipped from launch through June 30th 2007. They have adjusted that estimate to 12 million units. Microsoft has shipped 10.4 million Xbox 360’s between launch in 2005 and the end of 2006, so they are only going to ship another 1.6 million units over the next five months.
Over the holiday, Microsoft sold 1.1 million Xbox 360’s despite both Nintendo and Sony both launching their new systems for the holiday season. Microsoft is claiming victory over the holiday season but could that just have been due to lack of availability of the competition? One has to wonder.
It is clear though that Microsoft is focused on turning the Xbox 360 into a profitable venture by 2008. With announcements such as IPTV, Video Marketplace and a new cheaper to produce upgraded model rumored to be in the works, they stand a good chance and making it to the black by the end of 2007.
While sales in the division were up 76 percent over last year, the division’s financial loss was also up 3 million to 289 million. The Entertainment and Devices division however now makes up 25 percent of Microsoft’s total sales which is up from 15 percent last year.
Microsoft also cut their shipping forecasts for the Xbox 360 to keep in line with the sell through rate at retailers. This move is also in an effort to make the division turn a profit in 2007. In the original shipment forecasts, Microsoft predicted 13-15 million Xbox 360’s would have been shipped from launch through June 30th 2007. They have adjusted that estimate to 12 million units. Microsoft has shipped 10.4 million Xbox 360’s between launch in 2005 and the end of 2006, so they are only going to ship another 1.6 million units over the next five months.
Over the holiday, Microsoft sold 1.1 million Xbox 360’s despite both Nintendo and Sony both launching their new systems for the holiday season. Microsoft is claiming victory over the holiday season but could that just have been due to lack of availability of the competition? One has to wonder.
It is clear though that Microsoft is focused on turning the Xbox 360 into a profitable venture by 2008. With announcements such as IPTV, Video Marketplace and a new cheaper to produce upgraded model rumored to be in the works, they stand a good chance and making it to the black by the end of 2007.
