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Microsoft Game Revenues Down Three Per Cent

Tom Ivan's picture

By Tom Ivan

July 24, 2009

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Microsoft has reported its financial results for the fiscal year ended June 30, 2009, showing overall declines in revenue, operating and net income which extended to its Entertainment and Devices Division (EDD).

Annual company revenue came in at $58.44 billion, down three per cent from the prior year. Operating income and net income for the year were $20.36 billion and $14.57 billion, representing declines of nine per cent and eight per cent.

Yearly revenues at Microsoft’s EDD, which covers the Xbox 360 and Zune platforms, as well as PC and online games, decreased across most lines of business.

Xbox 360 platform and PC game revenues fell $161 million, or three per cent, “primarily as a result of decreased revenue per Xbox 360 console due to price reductions during the past 12 months, partially offset by increased Xbox 360 console sales and increased Xbox Live revenue.” The company shipped 11.2 million Xbox 360 consoles during fiscal year, compared with 8.7 million in fiscal year 2008.

For the fourth quarter, Xbox 360 platform and PC game revenue fell $110 million, or 12 per cent. The company shipped 1.2 million Xbox 360 consoles during the period, compared with 1.3 million in the fourth quarter of fiscal year 2008.

w3stfall's picture
On July 25th w3stfall said:

I hate how Edge doesn't link to the official report.
http://www.microsoft.com/msft/earnings/FY09/earn_rel_q4_09.mspx

For the full 2009 fiscal year, the Entertainment & Device Division revenue dropped 6% to $7.7 billion. Profit decreased 66% to $169 million (still positive, but a sharp decrease from last year).

For Q4 only, EDD revenues fell by 25 % to $1.19bn. Profit was in the negative with losses at $130 million for the quarter.

So to sum up, EDD was profitable for the full fiscal year but unprofitable in Q4. Microsoft sold more Xbox 360s this year than last year (11.2 vs 8.7), but sold less in Q4 2009 than in Q4 2008 (1.2 vs 1.3).

http://vgsales.wikia.com/wiki/2009_fiscal_year
http://www.gamespot.com/news/6213956.html?om_act=convert&om_clk=newstop&...

michael_sylvain's picture
On July 26th michael_sylvain said:

I hate how people think journalism exists in order to unquestioningly report the results of corporations. Because of course, one interpetation of statistics precludes anyone else's, and it's wrong to report in any other way than credulous acceptance.

To sum up, any summary other than the one I prefer is an oversimplification, right?

yobrenoops's picture
On July 24th yobrenoops said:

Wait, so the sold 2.5 million more Xbox 360s but lost $161 Million? If I was a shareholder I'd be peeved.

grognard66's picture
On July 24th grognard66 said:

You need to brush up on your reading comprehension skills and learn how to read financial reports if that's what you came away with, yobrenoops. The xbox division was profitable for it's second year in a row and only saw a decline of 12% in revenue (due entirely to price cuts as sales actually increased). The PC hardware and Zune groups (which are in the same division as 360) were the ones bringing numbers down slightly.

Shareholders should be ecstatic about 360's financial role in MS compared to how all the other divisions (and the rest of the market) performed as profits were down 29% company-wide - 360 prevented that from being even lower.

yobrenoops's picture
On July 24th yobrenoops said:

I was a little unclear there. But surely a decrease in revenues isn't a good think after an increase in sales. Perhaps Microsoft have cut the 360 a little too far.

To quote

"Xbox 360 platform and PC game revenues fell $161 million, or three per cent, “primarily as a result of decreased revenue per Xbox 360 console due to price reductions during the past 12 months, partially offset by increased Xbox 360 console sales and increased Xbox Live revenue.”" This is purely talking about the 360 and PC Gaming, so I think my previous point is still valid when I talk about revenues dropping. It neither mentions the Zune or PC Hardware.

And nowhere in the article does it meantion the xbox division as profitable. I think my reading comprehension is fine, thanks.