Good News, Bad News for Xbox 360 in Quarterly Results

According to 1UP, Microsoft had some interesting data for its Xbox 360 and the news is mixed. While Xbox 360 unit sales have hit the 40 million market, hardware and software sales for the console are slowing.

Microsoft has released their latest financial result for the third quarter of their 2010 fiscal year (ending March 31), and along with a ton of different numbers and figures come two large numbers and figures of particular interest: The Xbox 360 has now sold over 40 million units worldwide to date, and the Entertainment and Devices division posted a profit of $165 million.

The bad news: It looks like hardware sales are actually cooling down, as 360 sales in this fiscal quarter were 1.5 million, down 12 percent from 1.7 million units sold in the same quarter last year. But due to the decrease in cost of making Xbox 360s, those 1.5 million unit sales still accounted for $199 million in revenue for the quarter, which saw the overall Entertainment and Devices division (which includes the 360, PC games, and Zune) post revenue of $1.67 billion.

As for software sales, there was a similar small decrease year-over-year: Sales for both the PC and Xbox 360 dropped 5 percent to $240 million. Still, profits for the division year-over-year are up, which Microsoft says is "primarily reflecting an increase in Xbox Live revenue and non-gaming revenue, offset in part by decreased revenue from Xbox 360 video games and decreased Xbox 360 consoles sold."

I still believe that when the conclusion is written for this generation of video game consoles, that the Xbox 360 and PS3 will be neck-and-neck from a unit sales perspective (a huge loss to Microsoft, given its head start and the lackluster beginnings of the PS3 sales cycle). But the success of Xbox Live should overshadow any gains Sony has made, and will prove to be the best reason to own the Microsoft console.

That Microsoft has been unable to drive the success of Xbox Live in other markets (the PC and Zune) is somewhat surprising.

Discuss this Article 12

Ocean
on Apr 23, 2010

How do sales of the 360 compare with the original Xbox?

Interframe
on Apr 23, 2010

Well, they're bringing Xbox Live to Windows Phone 7 regardless, and from the looks of it, XBL in WP7 is some of the best Microsoft product integration ever seen.

Rasken
on Apr 23, 2010

Microsoft would kill if they released a re-designed xbox 360 alongside Natal.  

The RROD of the current console is still dogging them and Sony is getting huge in-roads at the new price point.  

Redesign the 360 into rock solid hardware, drop the price to undercut Sony by at LEAST 70-80$ (229 with a 120 or 250GB HDD) and build in wireless.

The won't be able to make up for Blu-Ray after the fact in the 360 but they can pretty easily save that for the next version of the console and put that out in 3 or so years.

Ocean
on Apr 23, 2010

In the 1UP comments for the linked the article, the question was asked:  How many 2nd or 3rd buys because of the early reliability issues.

spivonious
on Apr 23, 2010

"That Microsoft has been unable to drive the success of Xbox Live in other markets (the PC and Zune) is somewhat surprising."

Really, Paul? PC has had free online gaming since the mid '90s. It's not surprising at all that PC gamers aren't paying $60 a year to play online.

Dipsh t Admin
on Apr 23, 2010

Interesting news.  I'm a new 360 owner as of January of this year, with the last console I had being the 8-bit Nintendo and Sega.  MS really needs to first and foremost change the console design to be slimmer and quieter.  With modern chips running at lower power consumption and less heat dissipation, that shouldn't be a problem.

One of the primary reasons I got it is so that I can dump cable.  They really should play up this aspect more, and develop it a little more.  During these economic times, people still want to watch cable TV, but don't want to pay the exorbitant prices.  

mleonard@compun...
on Apr 23, 2010

I know that Microsoft is really betting on Video downloads, but I think they would start pulling away from the PS3 (and the PS3 would have never caught up) if they added a Blu-Ray player to the 360. I own a PS3 just for Blu-Ray. I play a few console specific games on the PS3 but 99% of my games are played on the 360. If the 360 had a Blu-Ray player in it I would have never purchased the PS3. I wouldn't be surprised there are a lot of gamer/Blu-Ray junkies out there like myself that did the same thing which has boosted the PS3 sales.

rr0de74@live.com
on Apr 23, 2010

One just has to go here to see the real numbers.

http://vgchartz.com/weekly.php

Scroll down to hardware and look how much hardware Sony sells each week vs Microsoft.  MS dropped the Xbox 1, but Sony still sells the PS2 (41K last week) and the PSP.  Total hardware units last week for Sony 290,295 vs MS with 120,044.  Sure they are at different price points but 160,000 PS2 Sony is selling each month is probably pure profit at this point.

Some real facts.  Year to life as in 1st year, second year in the life of the PS3 and 360, the PS3 has sold more each year.  The 360 has just been out for a full year longer.  Also since the the PS3 slim was released, Sept 2009, it has out sold the 360 every week.

I predict the PS3 will pull even with the 360 by the end of this year and pull ahead next year.  I have no doubt in the life of both the PS3 will out sell the 360.

My question is, has the Xbox unit on its own turned a profit yet.  I am not asking does the 360 make money per unit sold, it does and has for some time now, but has MS made more money on the Xbox then it has spent on it, to include all of the RROD returns etc??  I would wager not.  They took a Billion dollar write off just for the RROD stuff.  At the end of the day I bet they are still in the red.  I wonder how share holders feel about that?

rr0de74@live.com
on Apr 23, 2010

"I don't understand how gaming sites, especially Kotaku, keep spinning that the PS3 is coming on strong but Xbox 360 is weakening when the NPD reports month after month the 360 sells more. Even after the price drop, there was only one month where the PS3 beat the 360."

Wrong....

vgchartz.com/hwcomps.php

You can pick what dates you want, and which consoles you want.  The PS3 is closing the gap and has 1 year less to sell their product.

Hardware to date (156 weeks, 360 has been longer than the other two)

vgchartz.com/hwlaunch.php

360 in last place.

Dr. Daniel Jackson
on Apr 24, 2010

"If the 360 had a Blu-Ray player in it I would have never purchased the PS3. I wouldn't be surprised there are a lot of gamer/Blu-Ray junkies out there like myself that did the same thing which has boosted the PS3 sales."

Optical media is on the way out, digital downloads are the future.

60+ $ for a game, 40$ for Live, 250$ for the console that has a 56% chance of failing, and is 5 years old.

300$ spent on Steam would go much farther.

No thanks, I'll stick to PC gaming, and my Gamecube.

subzerohitman721
on Apr 24, 2010

rrode,

However, the content for the PS3 simply doesn't match what the Xbox 360 brings to the table. Consistently, Xbox 360 games are constantly ranked higher by press & readers, have better sales across the board, & usually have better downloadable content on the 360.  Let's not forget the unrivaled experience of Xbox Live. You can go to different review sites, but the end result is the same.

It really doesn't matter about the console sales. The content is the true measure of what makes a console great. It's why the SNES won against the Sega Genesis. It's why the PS 1 held it's own against the competition of the time. It's why the PS2 is still the top selling console of all time, because it's content library was huge & of great quality for its era. The Wii may have the most consoles out this generation, but the games & game sales aren't even close to matching the console sales.

I think in terms of game quality, online content, & social ecosystem, the Xbox 360 clearly wins this. Sony & Nintendo have been caught flatfooted by Xbox Live. You couldn't bribe me with an Wii or PS3. Flawed as it maybe, the Xbox 360 is greater than the sum of it's parts.

shark47
on Apr 24, 2010

It'll be interesting to see if Microsoft can use the XBox to drive Windows 7 Phone sales. Zune HAD has half hearted XBox integration. It's with Windows Phone 7 that MS has started taking this more seriously.

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