Microsoft Entertainment division posts profit

How did they make a profit ? On print, MS says they lose money on every console, yet they shipped more consoles than before, and now they show a profit, even when taking a $1.1 billion charge. MS does funny math in their accounting practices !

Microsoft, infact all console makes usually make a loss on their consoles when they are first sold and usually make the money back from software sales, i think the only execption to this is the Wii which i think made profit from the go.

I think its been a long while since microsoft has been losing money on the 360 and i think you will probably find that they are in fact making a porfit on each console, this will be down to reduction of manufacturing costs and the like.

On a similar sort of topic I think i remember reading that sony is getting close to making a profit on each ps3, however i think that will be cancelled out with the price cut on the 80GB model

It's not a price but on the 80gb it is just a 40gb with a bigger HD and a Dual shock 3.

How do they make a profit?

Halo.

Xbox Live multiplayer, the game sales, downloadables, accessories and merchandise.
As said here, the consoles are the delivery devices. When you can sell an add-on hard drive that costs you ten dollars for $180, you're going to make a profit eventually.

Of course, there's a little creative accounting going on here, too. Like all smart companies, they have an investment portfolio for each division which offsets costs.
And remember those "Ring of Death" repair costs? You can bet whatever that actually cost them isn't in their figures.
Although sales of refurbished machines did wipe almost all of that out, since even refurbed, they sold for twice what they cost to make, ship and repair.

Originally posted by mspurloc:

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How do they make a profit?

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Of course, there's a little creative accounting going on

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Finally a ray of light !

Originally posted by iluvendo:

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Originally posted by mspurloc:

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How do they make a profit?

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Of course, there's a little creative accounting going on

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Finally a ray of light !

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To be fair, though, they did stop making the "we're losing money" claim last November. They probably realized they couldn't get away with it anymore, after game sales skyrocketed and they "fixed" the Ring of Death issue. They also got out of the movie business, which they now say they were never in, and that returned some cash to the coffers.

Very stupid, greedy move on their part, ticking Peter Jackson off that way. They destroyed any good will there was for them and they must've realized that.

Microsoft, as a company, will always, ALWAYS make a profit. Bill Gates is a financial genius, and MS is more fiscally secure than the U.S. government.

If there were two people left in the entire world, and one was Bill Gates, he'd have the other guy's wallet before the day was out.