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[Odysseus]

Unfortunately, you're using NPD sell through figures as a base to try and represent shipments, which doesn't really clairify anything. The only thing that's safe to say currently is... we don't know who's ahead. :/

Good point, but I wonder how much excess inventory a company likes to have in the marketplace. Nintendo got itself in trouble last year by letting too much get into the distribution channel, and ended up having to suspend production while retailers' inventories levelled off.

Again, you have to ask, would Nintendo have needed to ship out 1,000,000 units between April 1 and June 30? Particularly when Nintendo only projects 4.5 million shipments this fiscal year (April 1 - March 31, 2005, shipments based off statements made in May), and more than half of those likely coming in the last three months of this year. A million units in the slowest quarter just does not make any sense.

 

[jarrod]

Good point, but I wonder how much excess inventory a company likes to have in the marketplace.

It varies. For example this past spring SCEA said they had shipped a total of 26 million PS2s in the US, yet NPD figures had only around 23 million sold (meaning 3 million in transit/inventory/shelves). Last year Microsoft had claimed shipments of around 1.5 million in the Asia/Pacific region, yet sales could barely account for half that. Mixing shipments and sales is never a good idea, one just isn't a good indicator for the other.

Nintendo got itself in trouble last year by letting too much get into the distribution channel, and ended up having to suspend production while retailers' inventories levelled off.

True but they didn't suspend shipment this year at all. And that was for overshipping in the fall before... to be honest I'm not sure what relevance this might have to potential spring 2004 shipments?

Again, you have to ask, would Nintendo have needed to ship out 1,000,000 units between April 1 and June 30? Particularly when Nintendo only projects 4.5 million shipments this fiscal year (April 1 - March 31, 2005, shipments based off statements made in May), and more than half of those likely coming in the last three months of this year. A million units in the slowest quarter just does not make any sense.

Breaking down that 4.5m figure would mean 375k a month if shipments were constant actually. Now I'd agree Nintendo's likely to ship less in the slower periods, but monthly shipments of 200-300k per month worldwide in this period wouldn't be at all surprising (given that's likely what sell through is). If Microsoft's ahead, it's likely by a negligible amount (300k or less). And really, that isn't even an indicator for sellthrough/userbase (seeing as Microsoft has a history of overshipping in Asia/Pacific).

 

[BeOnEdge]

"H&E is:

-Xbox
-PC and online games
-Consumer software & hardware (Money, Encarta, mice, keyboards)
-TV Platform (Windows Media Center, MS TV)"

OMG TEH XBAWKS LOSED M$ BILLLERONS!!!! OMG!!! thats like saying when sony posts their loses(like they were before spiderman hit)it was all the ps2s fault. REACH BABY!!!! REACH LIKE RICHARD SIMMONS IN SWEATIN' TO THE OLDIES!!!

 

[DarienA]

"H&E is:

-Xbox
-PC and online games
-Consumer software & hardware (Money, Encarta, mice, keyboards)
-TV Platform (Windows Media Center, MS TV)"

OMG TEH XBAWKS LOSED M$ BILLLERONS!!!! OMG!!! thats like saying when sony posts their loses(like they were before spiderman hit)it was all the ps2s fault. REACH BABY!!!! REACH LIKE RICHARD SIMMONS IN SWEATIN' TO THE OLDIES!!!

Be the half-serious damage control is SO unnecessary man...

 

[DCharlie]

"One of Microsoft's more interesting "dirty Microsoft accounting tricks" that I've heard of is that the "MacBU" (Macintosh Business Unit, the group responsible for Macintosh versions of Office, Virtual PC, etc.) is actually considered part of the "Home and Entertainment" department!"

oh of course, creative accounting goes on much more than people think and not just at MS.
Not that there is anything particularly wrong with that as such (at the end of the day, it boils down to what the company does across all the books).But it does have the effect of making certain departments look better or, in MS's case, less-worse than they actually are.

 

[sonycowboy]

Only a few vague comments about Next Generation R&D and fiscal year 2005, so not much to pull from that

Console sales through June were at the high end of our expectations with 15.5 million consoles sold [Listen] worldwide since launch. 10.1 million in North America, 3.9 in Europe and 1.5 in Asia.

First quarter revenues should be approximately $570 million. By the end of fiscal year 2005 (June 2005) we expect [Listen] to have sold over 20 million Xbox consoles since launch and have 1.5 million Xbox Live subscribers. It continues to gain console share and driving innovation through Xbox Live for consumers and XNA for developers.

 

[jedimike]

That's not really true.

One of Microsoft's more interesting "dirty Microsoft accounting tricks" that I've heard of is that the "MacBU" (Macintosh Business Unit, the group responsible for Macintosh versions of Office, Virtual PC, etc.) is actually considered part of the "Home and Entertainment" department!

It's right there in the financial statement plain as day...

The increase in operating loss in fiscal 2004 was primarily due to $141 million of stock-based compensation expense from the employee stock option transfer program in the second quarter of fiscal 2004 and increased sales of negative margin consoles and costs associated with the next generation console development efforts, partially offset by increased Xbox and Mac Office software sales.

 

[DCharlie]

Maybe MS top brass find the level of sales to Mac users entertaining?

 

[Gahiggidy]

Its a dirty trick, allright. Mac OS really belongs in the same category of PC Office. Lumping it in same category of Xbox is illogical.

 

[BeOnEdge]

not only is it illogical but it makes grown men cry.

 

[Gahiggidy]

not only is it illogical but it makes grown men angry.

fixed.

 

[BeOnEdge]

 

[Sho Nuff]

MS is so mean and evil, they are VARY bad.

 

[jarrod]

By the end of fiscal year 2005 (June 2005) we expect[Listen] to have sold over 20 million Xbox consoles since launch and have 1.5 million Xbox Live subscribers.

Wow, looks like MS & Nintendo both only expect to move 4.5 million consoles this upcoming year. Even steven. :/

 

[Li Mu Bai]

Anyone here of an OS gaining major momentum called Linux? OpenGL 2.0? MS also faces other competiton from emerging as well as established tech. sectors. They are by no means completely untouchable, if Xenon contributes as heavily to H&E losses as the X-Box has, no X3. That said, they seemed to have learned from & altered Xenon's design philosophy to be as cost efficient as possible. (esp. when selecting business partners)Trade-off? They can no longer claim to be king of the visual mountain, though looking at the PS2 behemoth's continued sales performance, it may not matter in the end.

 

[MrSingh]

MS management thinks that Macs and XBox are for losers, that's why they are both in the money losing division.

Sound logical to me.

 

[cvxfreak]

Another 1.1 Billion lost? Geez.

 

[gmoran]

What I find amazing, is that MS are bleeding a billion dollars a year to come in a piss poor joint second with Nintendo. In fact MS have to be congratulated for creating the myth that they are actually contenders in this generation, when the reality is that the last generation which had a console this far ahead of its competitors was in the days of the NES.

 

[DCharlie]

"What I find amazing, is that MS are bleeding a billion dollars a year to come in a piss poor joint second with Nintendo. In fact MS have to be congratulated for creating the myth that they are actually contenders in this generation, when the reality is that the last generation which had a console this far ahead of its competitors was in the days of the NES."

Well, i think they should just pull out. The less companies pumping money into this industry the better i say.

 

[gofreak]

Jesus, in one year, they lost more than half of what Nintendo is worth.

Where's the oogly eyes emoticon when you need it?

Nintendo is worth far more than 4.7bn x 2...

 

[Alcibiades]

Nintendo is worth far more than 4.7bn x 2...

true, Nintendo may have about 4-6 billion in the bank (depending on exchange rates) in general, but they are definitely worth more than that...

 

[User 406]

So, does anyone have any info on what kind of profits the MacBU makes? Perhaps figures from before they were moved to H&E?

From this TechNewsWorld article:

Gartner research director Martin Reynolds told TechNewsWorld that Microsoft's Mac unit flies below the radar largely because the development group is insignificant to all but Mac users, who represent less than 3 percent of the total computer market.

However, Reynolds called the Mac market for Office a good one for Microsoft, which profits from Mac software sales more than it does from sales to Windows users. "It's a comfortable, profitable product for them," he said.

If Mac Office is making more profits than Windows Office, that sounds like a pretty hefty chunk of cash. Maybe Xbox is losing an even more colossal sum of money than we thought.

 

[open_mouth_]

that statement likely means profit per unit of sales rather than overall profit...

MS making more money from less than 5% of the market than they are selling essentially the same products to the other 95% of the PC market??? Come on now...

 

[Deg]

'concerned' about microsoft's spending habits on its long-term investments.

I think it also happens to reflect brilliantly on MS's management and decison making when it comes to Xbox

 

[CrimsonSkies]

Paraphrasing of course, "Hrmm. So Microsoft has failed with the Xbox. They should can the platform. And of course they shouldn't bother trying again. Their poor stock holders only received 30 billion in dividends. I'm sure the pitch forks are aimed at the brass in Redmond from angry stock holders with the company. Wouldn't that be great to have Nintendo and Sony alone with hardware next gen?"

Another day at GAF. I'm also curious to see a full breakdown of Sony's fiscal year breakout. I'm sure the last thing you'll see on it is the word profit.

 

[Baron Aloha]

Another day at GAF. I'm also curious to see a full breakdown of Sony's fiscal year breakout. I'm sure the last thing you'll see on it is the word profit.

Spiderman begs to differ.

 

[Prine]

Well, it is their first time. We've already witnessed MS taking a much safer, intelligent route with Xenon. What with all the 2nd party cancellations and new hardware contracts.

 

[Solid]

Haha who the hell wrote that?

 

[Deg]

Their poor stock holders only received 30 billion in dividends.

Tis a shame that Xbox divison could have spent their Billions more wisely or should have got more to spend to bolster their postion

Another day at GAF. I'm also curious to see a full breakdown of Sony's fiscal year breakout. I'm sure the last thing you'll see on it is the word profit.

Spiderman and SCE are your freinds.

 

[Prine]

Tis a shame that Xbox divison could have spent their Billions more wisely or should have got more to spend to bolster their postion

A shame? To who? For most MS have done everything right with Xbox.. We dont really care what MS could have done, we're happy with what they've currently acheived.

 

[Deg]

A shame? To who? For most MS have done everything right with Xbox..

So much 'right' they lost billions I am sure Sony are watching carefully and learning

We dont really care what MS could have done, we're happy with what they've currently acheived.

Sure. All fanboys say that

 

[sonycowboy]

For most MS have done everything right with Xbox.. We dont really care what MS could have done, we're happy with what they've currently acheived.

LOL. Thanks, I needed a good joke.

 

[DCharlie]

perhaps they should have just bought sony with that cash and have done with it?

 

[human5892]

perhaps they should have just bought sony with that cash and have done with it?

Don't give them ideas, DCharlie -- they tried it with Nintendo, after all.

 

[Mustang]

true, Nintendo may have about 4-6 billion in the bank (depending on exchange rates) in general, but they are definitely worth more than that...

I always find it humorous that Nintendo has 5 billion in the bank and they are a powerhouse while Apple computer has 5 billion in the bank (and debt free also) and they are considered by the same group to be on the brink of oblivion.

 

[kaching]

perhaps they should have just bought sony with that cash and have done with it?

I was going to suggest the same...

 

[P90]

"What I find amazing, is that MS are bleeding a billion dollars a year to come in a piss poor joint second with Nintendo. In fact MS have to be congratulated for creating the myth that they are actually contenders in this generation, when the reality is that the last generation which had a console this far ahead of its competitors was in the days of the NES."

Well, i think they should just pull out. The less companies pumping money into this industry the better i say.

Are games better now? I don't see how more money into the market has made it better.

Another thought: I'm not sure if $19.99 games 3 months after release is the best thing for the LONG TERM health of the business, either. As a consumer it is nice, I have no problem knowing that a game I want will be discounted in a very short time. $19.99 sure beats $49.99. But someone is got to have some low, low profit margins at $19.99 with development costs what they are.

 

[KilledByBill]

The reason Microsoft is pouring so much money into XBOX is because they're hoping that it will be the mythical "second act" of their success. The company has grown to enourmous size based on their OS and Software sales but those business lines aren't growing at 20% anymore. Kicking out newer versions of Windows and Office will maintan the company but not drive its growth further, which video games and media convergence have the potential to do.

Also, as someone previously pointed out if Microsoft isn't spending this money on XBOX then it will be just sitting on the accounts along with Microsoft's already bloated cash reserves and short term security holdings. That would probably piss-off the shareholders even more because if MS isn't investing it's cash then rationally they should be paying it to investors (see the huge upcoming dividend).

Microsoft is investing in Xbox with "dirty-money". Money they earned from breaking the law.

That's not speaking truthfully. The case Microsoft lost to the Federal gov. involved the illegal business practices the company used to run Netscape and their browser software into the ground. While that's certainly bad it doesn't mean that Microsoft's monopoly is and of itself illegal or was created illegally. Microsoft's monopoly was gained through extraordinary business success not illegal actions, their money is as "clean" as any.

 

[DarienA]

Microsoft's monopoly was gained through extraordinary business success not illegal actions

I cannot believe you were not struck by lighting while typing the above piece of a sentence.

 

[sonycowboy]

I cannot believe you were not struck by lighting while typing the above piece of a sentence.

IAWDA

 

[jarrod]

Well, it is their first time. We've already witnessed MS taking a much safer, intelligent route with Xenon. What with all the 2nd party cancellations and new hardware contracts.

"Follow our lead."

I always find it humorous that Nintendo has 5 billion in the bank and they are a powerhouse while Apple computer has 5 billion in the bank (and debt free also) and they are considered by the same group to be on the brink of oblivion.

Er, I actually find most people think Nintendo and Apple to be very comparable companies, highly profitable and catering to their diehard fanbases and having extremely successful handhelds.

 

[explodet]

"I didn't get rich by signing a bunch of checks!"
*evil nerd cackle*

 

[Lazy8s]

Each console manufacturer's company has been guilty of illegal business practices. Can't really quantify the full effects of all of that, however.

 

[KilledByBill]

I cannot believe you were not struck by lighting while typing the above piece of a sentence.

Funny you should mention that; right as I was finishing the post a loud thunder storm started outside along with pouring rain. It stopped quickly though and I'm unharmed at the momment.

Although I worded it... funny, I meant what I said. Microsoft is a natural monopoly, it wasn't built through any violations of anti-trust law like a Stanndard Oil.

 

[jedimike]

Er, I actually find most people think Nintendo and Apple to be very comparable companies, highly profitable and catering to their diehard fanbases and having extremely successful handhelds.

Very true jarrod... and at one time they both dominated their markets but now are mere shadows of what they used to be.

 

[ourumov]

I wonder what's their limit of losses to quit the vg market ... Two years ago there were rumors about some MS stakeholders not being very happy about Billy's idea...
1.1 billion could do a lot of things on 3rd World...

 

[wazoo]

Very true jarrod... and at one time they both dominated their markets but now are mere shadows of what they used to be.

Even more, they became market leader in a time where big companies were not considering the market as worth any investment. Nintendo has always been a family niche oriented company. The fact they were market leader with the NEs was just a weird situation.

 

[sonycowboy]

Although I worded it... funny, I meant what I said. Microsoft is a natural monopoly, it wasn't built through any violations of anti-trust law like a Stanndard Oil.

Quite a bit of evidence released seems to contradict your assessment. However, with the lobbying power that Microsoft has and thier importance to the US market, I doubt you'll see the administration going after them in any serious way.

 

[jedimike]

I wonder what's their limit of losses to quit the vg market ... Two years ago there were rumors about some MS stakeholders not being very happy about Billy's idea...
1.1 billion could do a lot of things on 3rd World...

They got that covered already... this what what Bill and Melinda will do with their dividend.

Bill Gates, co-founder and trustee of the Bill & Melinda Gates Foundation, today announced that he will pledge to the family foundation all of his proceeds from a decision announced today by Microsoft Corp. to issue a one-time, special stock dividend.

Based on current Microsoft stock ownership, the donation could be worth approximately $3 billion (U.S.).

 

[jarrod]

edit-nevermind, answered in the other thread.