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View Full Version : MS makes 85% profit margin on Windows. Not to shabby...


peter2002
Nov 17, 2002, 04:33 PM
Microsoft has revealed for the first time that it has made profit margins of 85 per cent on its Windows system while its remaining businesses made losses, raising questions about the benefits of the group's costly efforts at diversification.

The client division, which markets Windows, generated operating profits last quarter of $2.48bn on revenues of $2.89bn, implying margins of 85 per cent.

Among Microsoft's other businesses, the home and entertainment division, which includes the Xbox games console, lost $177m in the quarter on revenues of $505m. Salomon Smith Barney estimates it loses about $120 on each console it sells.

MSN, the internet service provider and portal, lost $97m, down from losses of $199m in the same quarter last year, on revenues up from $431m to $531m.

The business solutions group, which provides software for small and medium-sized businesses and includes recent acquisitions Great Plains of the US and Navision of Denmark, lost $68m on revenues of $107m.

And the CE/Mobility division, which includes mobile telephone software and the Windows CE operating system for handheld computers, lost $33m on revenues of $17m.

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Who says there is no money in hi-tech anymore? Lets go for 100% margin!

Peter :D

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1035873352050&p=1012571727088

edesignuk
Nov 17, 2002, 04:36 PM
That is just friggin insane! How dare they!?! :mad:

Wes
Nov 17, 2002, 05:00 PM
Originally posted by peter2002


Among Microsoft's other businesses, the home and entertainment division, which includes the Xbox games console, lost $177m in the quarter on revenues of $505m. Salomon Smith Barney estimates it loses about $120 on each console it sells

How much money do they make per game? I wonder how many games a person has to buy to make up for the subsidy of the lower price of the console.

Nipsy
Nov 17, 2002, 05:31 PM
Originally posted by W-_-W


How much money do they make per game? I wonder how many games a person has to buy to make up for the subsidy of the lower price of the console.

I believe it is 4-5 M$ owned game titles.

XBoxLive should also account for some revenue moving forward.

MrMacMan
Nov 17, 2002, 06:04 PM
Well M$ is pritty greedy, heck almost as greedy as apple. ;)
But really, apple is greedy with prices, they don't make next-gen hardware and sell it for next gen prices.
Whatever Microsoft is gonna keep making those huge prices intill they make software just to make profits and put together a huge bug filled OS, such as Windows 2000. :rolleyes:

Computer_Phreak
Nov 17, 2002, 07:00 PM
Originally posted by Nipsy


I believe it is 4-5 M$ owned game titles.

XBoxLive should also account for some revenue moving forward.


thats not the point... M$ doesnt care about making profits on the xbox right now. All they care about is trying to gain market share where they had none. When the xbox becomes the stardard for gaming (like the playstation is and like windows is the standard for Operating Systems) then they charge ridiculous prices and have yet another monopolie product.

M$ is also doing the same thing in the PDA market. M$ based PDAs are quickly gaining ground to Palm OS based PDAs.

G4scott
Nov 17, 2002, 07:15 PM
I don't find this at all surprising... We all know that the only true cost of microsoft R&D is $129 for Jaguar, and the cost of hiring people to copy it and market it, and put it on CD's and sell it to the world...

Thirteenva
Nov 18, 2002, 11:54 AM
Thats probably 85% profit on the boxed version of windows, but a small number of people buy the box full version or even upgrades of windows compared to the total amount of people that use windows. In my experience, the average user will stick with the version that is factory pre installed on there computer. I still have win98 first edition on my pc at home.

In fact i've only met a couple of people who've "upgraded" there version of windows. And of that small percentage, more than half upgraded with *cough*borrowed*cough* software.....

bousozoku
Nov 20, 2002, 08:16 PM
Salomon Smith Barney is being kind compared to the other financial houses. Most have estimates of $200 loss on each XBox. Perhaps, they have a stake in Microsoft.

As far as making money on Windows, Chimpanzees work far more cheaply than talented, human software developers. :)