Microsoft posts surprising Xbox 360 loss
It seems it’s not just Sony who’s in a bit of a financial pickle. Microsoft’s just posted some of its new financials, and even though the Xbox 360 has been the top selling console in the states for the last year and a half, it seems it’s not enough to make the company any money.
Microsoft’s entertainment and devices division – which includes its Xbox business – made a staggering loss of $229 million in the first three months of this year, during which Xbox 360 sales fell by almost half when compared with last year.
Of course, it’s not really the Xbox itself within the entertainment and devices division that’s bleeding the Redmond giant’s money, and more its re-invigorated foray in to the smartphone market with its Windows 8 series of phones. The division’s revenue dropped 16.5 per cent, to $1.6 billion (that’s 1.6 Instagrams!), with the Xbox 360 selling just 1.4 million for the three months ending March 31 – a drop of more than 48 per cent from last year, when sales hit 2.8 million. I’d like to blame Kinect for it all, but that sucker’s sold like gangbusters.
Microsoft’s put it down to a “”soft gaming console market,” and though they seem to be doing their best to focus on the positive (It’s still the top selling console, guys!) they could be right. Sales of console hardware and software has dropped on all platforms. the declines in console gaming could have two effects; unwilling to take the huge financial hit of a new console launch, both Sony and Microsoft could delay the next generation for as long as possible. Or they could see the flagging sales as motivation to release new consoles earlier than planned, to recapture the market. We’ll have to wait and see.
It’s not a doom-and-gloom scenario for Microsoft as a whole though. The company’s boasted that revenue’s totalled $17.41 billion- an increase of 6 per cent – and that operating income’s increased by12 per cent to $6.37 billion.
“We’re driving toward exciting launches across the entire company, while delivering strong financial results,” said Steve Ballmer, chief executive officer at Microsoft. “With the upcoming release of new Windows 8 PCs and tablets, the next version of Office, and a wide array of products and services for the enterprise and consumers, we will be delivering exceptional value to all our customers in the year ahead.”