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Old 12-11-2002, 09:25 PM   #1
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Xbox may boost Microsoft earnings

Xbox may boost Microsoft earnings

By Reuters
December 11, 2002, 4:04 PM PT

Microsoft should see its current quarter results lifted by the strong holiday season performance of its Xbox video game console and related game software, an analyst said Wednesday.
Sanford C. Bernstein analyst Charles Di Bona said in a research note that Microsoft stood to benefit from higher sales of more profitable game software even as discounts cut into its revenue from sales of the money-losing Xbox console itself.

"Preliminary reports from retailers indicate that game software is moving extremely well this holiday season as discount-driven console sales through the fall have boosted the installed base," Di Bona said.

That extra Xbox-related earnings contribution could range from 1 cent to 4 cents per share even allowing for the possibility that hardware revenue could fall.

"Depending on the performance of console sales, revenues could swing some (plus or minus) $200 million around our base case," he said.

Based on the enhanced earnings, Di Bona raised his per-share estimates for the company to 50 cents from 49 cents for the December quarter and to $2.07 from $2.06 for the fiscal year ending in June.

The average estimates of analysts surveyed by First Call had been for earnings per share of 46 cents in the current, fiscal second quarter and $1.98 in the fiscal year.

Microsoft recently introduced a bundle that includes two games with the Xbox for the same $199 price that the console had sold for on its own previously, a move characterized by many analysts as an effective price cut. That bundle, analysts have said, has improved overall hardware sales for Microsoft, though the company actually loses money on each Xbox sold--up to $150 a unit, by some estimates.

Microsoft, like other companies that make game machines, counts on sales of game software, which have healthier margins, to boost its bottom line and make its games division profitable.

The company said last week it would pour more money into its games business to make it successful rather than cutting its losses and pulling out. The company's home entertainment division, which includes the Xbox, lost $177 million in the last quarter.

Story Copyright ? 2002 Reuters Limited. All rights reserved.


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Old 12-12-2002, 12:17 PM   #2
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What else is included in Home Entertainmnet? Is Ultimate TV considered to be part of that?

Good news though, coming into year two of release and starting to see some good financial results.
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Old 12-12-2002, 06:21 PM   #3
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i suppose you could apply the saying "you gotta spend money to make money," to this story.

i too am anticipating the xbox to have a killer holiday season, beating out sony and gamecube in overall sales (if not a close second behind sony). they have a good, if not great, software lineup, and coupled with the bundled xbox, it's hard to imagine anyone but the most die hard fanboys to at least be interested in xbox.

not saying that everyone should run out and buy it but you have to give props where ever due, right?
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Old 12-15-2002, 01:51 AM   #4
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true, but to do that they need to beat GC sales in the U.S. I hear that GC pulled ahead of Xbox last month and is still leading Xbox this month. Still waiting for some legit info though.
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Old 12-15-2002, 06:44 AM   #5
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Ya, unless someone has some numbers somewhere, all we have to go by is the Nintendo rep saying that GC was selling better than the XB because of the release of Metroid Prime. It could of just sold better for one week for all we know. Does anyone have console sales for the month of November?
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Old 12-16-2002, 10:21 AM   #6
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Last I'd read the Xbox was ahead of the GC by some 500k units. Not an impossible feat for a great game to achieve, but I haven't heard any of this either. Can someone comfirm or deny this? I've read that MP and SC well both selling vey well, though I dunno how many (if any) consoles each moved...
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Old 12-16-2002, 10:57 AM   #7
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Yeah I have the chart you guys. Compliments of

GBA 1.3 million
PS2 1.3 million
GC 468,000
Xbox 468,000

1 PS2 GRAND THEFT AUTO:VICE Take-Two PS2 1,452,729
2 GCN METROID PRIME Nintendo GCN 363,389
4 PS2 TONY HAWKS PRO SKATR4 Activision PS2 321,941
5 GBA YU-GI-OH! ETERNAL Konami GBA 269,498
6 PS2 MADDEN NFL 2003 Electronic Arts PS2 240,796
8 PS2 LORD OF RINGS: TOWERS Electronic Arts PS2 203,802
9 PS2 MORTAL KOMBAT: DEADLY Midway PS2 202,592
10 GBA METROID FUSION Nintendo GBA 199,723
Outpostnine is that 1%.
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