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Profit vs. Revenue
Posted By: Narcogen <narcogen@rampancy.net>Date: 5/22/02 1:52 a.m.

In Response To: Re: Gross vs. Profit (Miguel Chavez)

: In no way am I tackling all your claims, but I do want to interject on one
: issue... I too realize that MS's profits aren't linearly tied to the
: expense of the hardware itself, that there's the money invested in the
: developers, the marketing, etc... However, I think this is not quite as
: un-accounted for as you may think. Personally I believe all such
: expenditures occupy a different section of the accounting books of *any*
: legitimate (dicey choice of words when discussing MS, no?) software
: business like MS. In other words, the salaries of those within Bungie, the
: costs of office supplies, the cost of property/rent to house these
: developers, fuel for the shuttle buses, equipment for Marty, etc., these
: are not line items that make an appreciable dent on the Xbox hardware
: division's P&L sheet.

Perhaps so. But it doesn't matter. Nobody's trying to make a point of whether or not the Xbox "hardware division" makes a profit or not, since such a thing is an artificial division (if it exists at all). The Xbox is a hybrid project, requires hardware and software, and is a major product in the MS Games Division. Even if those costs aren't allocated to the Xbox on a departmental level, they ARE allocated on a project level, otherwise executives can't make decisions.

If costs were allocated the way you describe, someone might logically suggest terminating the entire hardware division and just focus on making Xbox software.

I'm sure you can see the logical flaw there. :)

: Let me be clear, I'm not suggesting that those kinds of things aren't
: important in some regard, I just think *all* the big players conveniently
: don't include them in their charts on tracking profits accrued from
: console sales... so if the other players aren't counting it, why force MS
: to?

I can assure you they do-- because otherwise they aren't profit charts, they are revenue charts, and would be referred to as such. The SEC would be all over them otherwise, especially for a publicly traded company like MS.

Whenever you see quotes for fantastic $ figures in articles, it's almost always revenue, not profit. Companies issue quarterly profit reports, but not on a departmental or project basis-- at least not for public consumption, unless they choose to. And prior to such announcements they're usually required to go into a "quiet period" and not say anything at all.

rampancy


Message Index



Replies:

Death of the Xbox?FunkDaddy 5/20/02 4:34 p.m.
     Re: Death of the Xbox?PCDestroyer 5/20/02 4:46 p.m.
           Re: Death of the Xbox?Surrepticius 5/20/02 4:58 p.m.
                 Death of the Xbox??...My @$$Mutti 5/20/02 6:48 p.m.
                       Re: Death of the Xbox??...My @$$Mr. Bobo 5/20/02 8:07 p.m.
     Re: Death of the Xbox?ferrex 5/20/02 6:03 p.m.
           Hurrah!Kellen Squire 5/20/02 11:00 p.m.
           Re: Death of the Xbox?Kanen Faud'r 5/21/02 3:12 a.m.
                 Re: Death of the Xbox?ferrex 5/21/02 1:24 p.m.
                       Re: Death of the Xbox?Kanen Faud'r 5/21/02 2:12 p.m.
                             What about the profits from...Ulf 5/21/02 3:08 p.m.
                       Gross vs. ProfitNarcogen 5/21/02 10:39 p.m.
                             Re: Hard DriveNthDegree256 5/21/02 11:12 p.m.
                                   Re: Hard DriveNthDegree256 5/21/02 11:13 p.m.
                                   hard drive vs. memory cardNarcogen 5/22/02 1:38 a.m.
                                         Re: hard drive vs. memory cardMark Levin 5/22/02 1:46 a.m.
                                               nice feature, just not essentialNarcogen 5/22/02 4:39 a.m.
                                         Re: hard drive vs. memory cardMiguel Chavez 5/22/02 1:51 a.m.
                                               Re: hard drive vs. memory cardpoena.dare #CP# 5/22/02 2:23 a.m.
                                                     Re: hard drive vs. memory cardMark Levin 5/22/02 3:21 a.m.
                                                           DVD Consortium ChargesNarcogen 5/22/02 4:48 a.m.
                                                                 Re: DVD Consortium ChargesLouis Wu 5/22/02 8:30 a.m.
                                                                       Re: DVD Consortium ChargesNarcogen 5/23/02 1:33 a.m.
                                                                             Re: DVD Consortium ChargesMark Levin 5/23/02 2:15 a.m.
                                                                                   Re: DVD Consortium ChargesNarcogen 5/23/02 3:05 a.m.
                                                                                         Re: DVD Consortium ChargesMark Levin 5/23/02 3:09 a.m.
                                                                                               Re: DVD Consortium ChargesNarcogen 5/24/02 4:14 a.m.
                                                     xbox as music playerNarcogen 5/22/02 4:45 a.m.
                                               The Console CaveNarcogen 5/22/02 4:42 a.m.
                                         Re: hard drive vs. memory cardSpudBoy 5/22/02 1:52 a.m.
                                               PGR ghosts and Myth FilmzNarcogen 5/22/02 5:04 a.m.
                             Re: Gross vs. Profitvector40 5/21/02 11:28 p.m.
                                   Grosse Profit PointeNarcogen 5/22/02 1:44 a.m.
                             Re: Gross vs. ProfitMiguel Chavez 5/22/02 1:22 a.m.
                                   Profit vs. RevenueNarcogen 5/22/02 1:52 a.m.
           Doomsayers vs MS Kool-AidNarcogen 5/21/02 9:38 p.m.
                 Re: Doomsayers vs MS Kool-AidKellen Squire 5/21/02 10:57 p.m.
                       Kool Aid vs FUDNarcogen 5/22/02 4:18 a.m.
                             *blink*Kellen Squire 5/22/02 6:29 p.m.
                                   Well, uh banshee "challenge" *NM*Black_Jackal 5/22/02 6:47 p.m.
                                         WHAT THE !@#$!Black_Jackal 5/22/02 6:51 p.m.
                                               Re: WHAT THE !@#$!Narcogen 5/23/02 2:40 a.m.
                                   SUPERFUD! :)Narcogen 5/23/02 2:38 a.m.
                                         Dratness!Kellen Squire 5/23/02 8:30 a.m.
                                         Re: SUPERFUD! :)Kellen Squire 5/23/02 9:43 a.m.
                                               Good Grief, this is great. *NM*vector40 5/23/02 9:25 p.m.
                                               Re: SUPERFUD! :)Narcogen 5/24/02 4:09 a.m.
                                         Re: SUPERFUD IS FINALLY REPLIED TOKellen Squire 5/24/02 12:23 a.m.
                                               Jesus.Zapf Dingbats 5/24/02 12:58 a.m.
                                                     Re: Jesus.Kellen Squire 5/24/02 8:24 a.m.
                 Re: Doomsayers vs MS Kool-AidMiguel Chavez 5/22/02 1:33 a.m.
                       Re: Doomsayers vs MS Kool-AidNarcogen 5/22/02 4:54 a.m.
     Re: Death of the Xbox?Cunbelin The Longwinded 5/23/02 5:40 a.m.



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