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1st Course · Jan 26, 2015

Microsoft Corp. today announced revenue of $26.5 billion for the quarter ended December 31, 2014. Gross margin, operating income, and diluted earnings per share (“EPS&#8221 for the quarter were $16.3 billion, $7.8 billion, and $0.71 per share, respectively.

Xbox console sales totaled 6.6 million units, with strong holiday season performance

slides said:

Microsoft's 10k said:
Computing and Gaming Hardware revenue decreased $473 million or 11%, primarily due to lower revenue from Xbox Platform, offset in part by higher Surface revenue. Xbox Platform revenue decreased $703 million or 20%, driven by a 10% decline in total console volume, the transition from Xbox 360 to Xbox One with lower prices compared to the prior year, and lower revenue from second- and third-party video games and accessories. We sold 6.6 million Xbox consoles during the second quarter of fiscal year 2015 compared with 7.4 million consoles during the second quarter of fiscal year 2014. Surface revenue increased $211 million or 24%, primarily due to Surface Pro 3 units sold, offset in part by a decrease in revenue from other Surface devices sold. Surface Pro 3 was released in June 2014.

Computing and Gaming Hardware gross margin increased $49 million or 12%, due to a $522 million or 13% decrease in cost of revenue, offset in part by lower revenue. Gross margin benefited from the mix shift to Surface Pro 3. Xbox Platform cost of revenue decreased $492 million or 16%, mainly due to lower volumes and a lower cost per console sold, reflecting the transition from Xbox 360 to Xbox One.

Computing and Gaming Hardware revenue increased $571 million or 10%, primarily due to higher revenue from Surface, offset in part by lower revenue from Xbox Platform. Surface revenue increased $719 million or 56%, primarily due to Surface Pro 3 units sold, offset in part by a decrease in revenue from other Surface devices sold. Xbox Platform revenue decreased $165 million or 4%, mainly due to a decrease in second- and third-party video games revenue. We sold 9.1 million Xbox consoles during the first half of fiscal year 2015 compared with 8.6 million consoles during the first half of fiscal year 2014.

Computing and Gaming Hardware gross margin increased $323 million or 52%, due to higher revenue, offset in part by a $248 million or 5% increase in cost of revenue. Gross margin benefited from the mix shift to Surface Pro 3. Xbox Platform cost of revenue increased $131 million or 4%, mainly due to higher volumes of consoles sold. Surface cost of revenue increased $119 million or 7%, mainly due to a higher cost per device sold, driven by Surface Pro 3.

http://www.microsoft.com/investor/E...s/PressReleaseAndWebcast/FY15/Q2/default.aspx

Code:

(360 + XBO)  Hardware Unit Sales (Unit:Million)


  FY          Jl-Sp    Oc-Dc    Ja-Mr    Ap-Jn      FY      


2013/14        1.2      7.4      2.0      1.1       11.7      

2014/15        2.4      6.6        -        -        9.0

Code:

   Xbox One Hardware Unit Sales (Unit:Million)


  FY          Jl-Sp    Oc-Dc    Ja-Mr    Ap-Jn      FY      LTD

2013/14         -       3.9      1.2       ?         ?       ?

Code:

              Xbox 360  Hardware Unit Sales (Unit:Million)


  FY          Jl-Sp    Oc-Dc    Ja-Mr    Ap-Jn      FY       LTD

2005/06         -       1.5      1.7      1.8       5.0      5.0

2006/07        1.0      4.4      0.5      0.7       6.6      11.6
    
2007/08        1.8      4.3      1.3      1.3       8.7      20.3  
  
2008/09        2.2      6.0      1.7      1.2       11.2     31.5  
   
2009/10        2.1      5.2      1.5      1.5       10.3     41.8

2010/11        2.8      6.3      2.7      1.7       13.7     55.3 

2011/12        2.3      8.2      1.4      1.1       13.0     68.3

2012/13        1.7      5.9      1.3      1.0       9.9      78.2

---------------------------------------------------------------------

2013/14        1.2      3.5      0.8       ?         ?        ?


- Xbox 360 sales rise to 84 million (June 9, 2014)

Credit goes to Parmenides for the format

Jamix012 · Jan 26, 2015

With the Xbox 360 fading faster than most expected, that's actually down on last year.

Miles X · Jan 26, 2015

Awesome performance from 360 and XB1.

1970 Chevelle SS · Jan 26, 2015

Here we go

Freedom = $1.05 · Jan 26, 2015

I wanna know if whatever they call the division the Xbox family is in now took a loss. Those pricecuts and bundles might have cost them some black ink.

edit:

Devices and Consumer revenue grew 8% to $12.9 billion, with the following business highlights:

· Surface revenue of $1.1 billion, up 24%, driven by Surface Pro 3 and accessories

· Office 365 Home and Personal subscribers increased to over 9.2 million, up 30% sequentially over prior quarter

· Search advertising revenue grew 23%, with Bing U.S. market share at 19.7%, up 150 basis points over prior year

· Xbox console sales totaled 6.6 million units, with strong holiday season performance

· Phone Hardware revenue of $2.3 billion, with 10.5 million Lumia units sold driven by growth in affordable smartphones

· Windows OEM Pro revenue declined 13%; revenue was impacted by the business PC market and Pro mix returning to pre-Windows XP end of support levels and by new lower-priced licenses for devices sold to academic customers

· Windows OEM non-Pro revenue declined 13%, with license growth from opening price point devices

FZW · Jan 26, 2015

MS has really come a long way from the OG Xbox. Kudos to them.

Surface seem to be doing well too.

The Shogun · Jan 26, 2015

So mathematicians where we at on Xbones shipped?

Yes I know its hard to figure since they are combined.

ChanDangle · Jan 26, 2015

Why not separate the numbers, or do we just lump it all as One numbers?

SwiftDeath · Jan 26, 2015

Probably a good result by XB1 then as 360 seems to be fading fairly fast

Jburton · Jan 26, 2015

Shipped and combined numbers?

Seems low.

The Artisan · Jan 26, 2015

so, wat do we got for units sold

Faustek · Jan 26, 2015

Freedom = $1.05 said:
I wanna know if whatever they call the division the Xbox family is in now took a loss. Those pricecuts and bundles might have cost them some black ink.

Of course they did.
Doesn't really matter though. They'll offset that from the coming revenue those consoles will bring in. I hope. No one buys a console to use as a bookend.

ChanDangle said:
Why not separate the numbers, or do we just lump it all as One numbers?

When a great deal people are in the business of War it's better to give half answers with as high numbers as possible instead of being seen as weak.

Reclaimer. · Jan 26, 2015

Combined? Damn that low, I expected Q4 2014 alone to be those numbers.

Edit; wait it's fiscal year Q2, I though Fiscal year 2015 :$ yeah I'm dumb

Derpyduck · Jan 26, 2015

Miles X said:
Awesome performance from 360 and XB1.

Was it? All I see is the word "decline" and "decreased" next to the Xbox related items on that powerpoint presentation. Surface, however, is doing wonderfully. As it should. Best tablet on the market.

Chocolate & Vanilla · Jan 26, 2015

So what are we looking at here? Somewhere between 4-4.5m for xbone

Delusibeta · Jan 26, 2015

ChanDangle said:
Why not separate the numbers, or do we just lump it all as One numbers?

It's to hide the fact that the Xbone is getting thoroughly trashed by the PS4. With that said, the 360 has pretty much died a death, so that we can assume the vast majority of the 6.6M figure is Xbones.

Either way, it's not exactly a figure to break the champagne out for.

SwiftDeath · Jan 26, 2015

Xbox revenue down makes sense due to the promotions, wonder how big a hit they really took on all of that

Tal Shiar Agent · Jan 26, 2015

So, math majors. What does that make the gap of total sold to last report for PS4 a small Xbone?

Miles X · Jan 26, 2015

The Shogun said:
So mathematicians where we at on Xbones shipped?

Yes I know its hard to figure since they are combined.

Even assuming Xbox 360 was flat yoy (obviously wasn't) that's 3.1m XB1's shipped on top of the 7.5m~ guesstimates from last Q.

IMO I would say X360 dropped a similar amount this holiday to what it did the year before (5.9m to 3.5m) just under half. So around 2m for 360, 4.6m for XB1 which is on par with the early holidays 360 put up.

11 - 12m LTD shipped

Derpyduck said:
Was it? All I see is the word "decline" and "decreased" next to the Xbox related items on that powerpoint presentation. Surface, however, is doing wonderfully. As it should. Best tablet on the market.

Yes it is, 6.6m is a lot of consoles sold. (Especially for one that isn't a market leader, do not forget this).

onQ123 · Jan 26, 2015

Shocked to see it down from last year with the price cuts for Xbox One but then again last year had the launch of Xbox One & Xbox 360 was doing better I guess.

DieH@rd · Jan 26, 2015

What are Xbone NPD numbers for Oct+Nov+Dec?

SerTapTap · Jan 26, 2015

Not the headliner, but yay for Surface Pro 3 doing well.

Welfare · Jan 26, 2015

Well than, much better than I expected.

Xbox One might be as high as 11.8 million

Miles X · Jan 26, 2015

DieH@rd said:
What are Xbone NPD numbers for Oct+Nov+Dec?

2.65m

Carl · Jan 26, 2015

Pretty good numbers. Assuming the majority of that is Xbone

nelchaar · Jan 26, 2015

SwiftDeath said:
Xbox revenue down makes sense due to the promotions, wonder how big a hit they really took on all of that

Says Xbox revenue down by 20% in that slide in the OP. Ouch.

Miles Quaritch · Jan 26, 2015

Sir TapTap said:
Not the headliner, but yay for Surface Pro 3 doing well.

I was just thinking this.

Good to see it doing well. It's a fantastic piece of kit. Deserves every bit of success.

allan-bh · Jan 26, 2015

Sounds a good number considering the decline of 360.

TalonJH · Jan 26, 2015

Stop combining the numbers. Either way, good show.

airmangataosenai · Jan 26, 2015

So they're sitting either right at or a little over 12 million total shipped.

notbad.jpeg

The Shogun · Jan 26, 2015

Miles X said:
11 - 12m LTD shipped

Not bad at all.

vesvci · Jan 26, 2015

Combined numbers? That's funny. Wonder what the sell-through numbers are...shipped numbers are meh.

edit:

I guess the price-cut is for market penetration..long term goal.

Bessy67 · Jan 26, 2015

onQ123 said:
Shocked to see it down from last year with the price cuts for Xbox One but then again last year had the launch of Xbox One & Xbox 360 was doing better I guess.

It's not that shocking. There's no way they were selling another 3.5 million 360s this holiday season.

Miles Quaritch · Jan 26, 2015

SwiftDeath said:
Xbox revenue down makes sense due to the promotions, wonder how big a hit they really took on all of that

It says 20%...

That's a pretty damn big hit.

Spiegel · Jan 26, 2015

Considering the theoretical big 360 decline, Xbox One shipments seem high. Next quarter we'll see if there's a repeat of this

2006/07 1.0 4.4 0.5 0.7

JaggedSac · Jan 26, 2015

Freedom = $1.05 said:
I wanna know if whatever they call the division the Xbox family is in now took a loss. Those pricecuts and bundles might have cost them some black ink.

edit:

Gross margin was positive for that division.

1st party revenue up 79% driven by Minecraft, MCC, and FH2. Nice to see them mention FH2.

SwiftDeath · Jan 26, 2015

Miles Quaritch said:
It says 20%...

That's a pretty damn big hit.

Oh I saw that, I simply meant in actual numbers instead of relative changes, of course that's never happening lol

I am kind of curious if any investors care about the Xbox divisions performance at all as I imagine it was stated previously that the margins on XB1 were to be much better than they currently are. Although considering how insignificant the division is to the overall bottom line I doubt anyone cares too much.

StealthGoblin · Jan 26, 2015

vesvci said:
Combined numbers? That's funny. Wonder what the sell-through numbers are...shipped numbers are meh.

Sell through is probably high for the US and the UK. Not so good everywhere else.

Chobel · Jan 26, 2015

Miles X said:
2.65m

How much did 360 do in the same period?

1st Course · Jan 26, 2015

Azure/servers very strong

Commercial cloud revenue grew 114% driven by Office 365, Azure and Dynamic CRM Online, and is now on an annualized revenue run rate of $5.5 billion

know you know why Nadella was chosen CEO

Ape · Jan 26, 2015

Miles Quaritch said:
It says 20%...

That's a pretty damn big hit.

The American discount had its impact apparently.

ZhugeEX · Jan 26, 2015

So, taking my previous calculations which left us at 7.4m up to Q3 2014.

I'd say that Xbox 360 shipments this quarter could be as high as 2.5m but as low as 2.0m

So that would leave us with Xbox One with 4.1m-4.6m

So.... total shipped for X1 would be 11.5m-12.0m

I made a prediction in January 2014 that X1 shipments would reach 11.7m units by end of 2014 shipped.... what do I win?

hawk2025 · Jan 26, 2015

In what world did they achieve share (I assume they mean marketshare?) leadership in the US with Xbox One?

Kysen · Jan 26, 2015

Sell-through estimates?

Derpyduck · Jan 26, 2015

Miles X said:
Even assuming Xbox 360 was flat yoy (obviously wasn't) that's 3.1m XB1's shipped on top of the 7.5m~ guesstimates from last Q.

IMO I would say X360 dropped a similar amount this holiday to what it did the year before (5.9m to 3.5m) just under half. So around 2m for 360, 4.6m for XB1 which is on par with the early holidays 360 put up.

11 - 12m LTD shipped

Yes it is, 6.6m is a lot of consoles sold. (Especially for one that isn't a market leader, do not forget this).

Since I've never sold a million of anything it does seem impressive, but not combined with the news that revenue was down by such a large percentage. Seems to fly in the face of your "good numbers" comment was all I was saying. I'm going to assume that huge hit came when they packed in games and dropped the price of the hardware, so surely they have hopes/plans to make that up by selling software and services to these new customers.

BibiMaghoo · Jan 26, 2015

ZhugeEX said:
So.... total shipped for X1 would be 11.5m-12.0m

If that is correct...

Not good.

Raist · Jan 26, 2015

Quite significant YoY decrease for shipments so that isn't exactly brilliant, but I guess the worst bit is the -20% in revenues. These price cuts and bundles did seem to have cost them a lot.

airmangataosenai · Jan 26, 2015

Also the guy saying 11 million is the baseline is wrong. The floor for last quarter was set at over 7 million shipped, and XBO did 2.65 million in the US last month. Ignoring the idea that USA sold all units shipped that quarter which is insane, there's no way two-thirds of all sales came from the USA alone people, I know you hate Microsoft but don't be delusional. 12 million shipped is the absolute minimum, and it could be as high as 13 million.

SerTapTap · Jan 26, 2015

So since the price drop is permanent...are they now taking a loss on every Xbone in the US for the foreseeable future? Eventually they'll be cheaper to make but it seems like that's the current situation? They were bragging pre-launch about being profitable day one, a big change from prior gens.

TalonJH said:
Stop combining the numbers. Either way, good show.

They'll stop when they stop selling the 360. And they'll stop doing "shipped" when...well no, they'll probably never stop doing that. Once they start I don't think they'll stop.

BibiMaghoo said:
If that is correct...

Not good.

Isn't that roughly what was expected? "More than half of PS4" worldwide seems to be doing well enough all things considered.

Welfare · Jan 26, 2015

So continuing from this post:

Welfare said:
Now Q4 is going to be something. Now personally, I see the "Xbox family" shipping 6m units in Q4, with 2 million going to the 360, and 4 million going to the Xbox One. 360 continuing it's consistent 40% drop, and the Xbox One being only slight up from 2013. I don't think MS want the Xbox One to be down YOY in the holiday after launch, so that could explain the channel stuffing we've been hearing about.

So 360:
Q1: 800K
Q2: 600K*
Q3: 700k*
Q4: 2.0m*
Total 2014: 4.1m*
Total LTD: 87m*

And for the One:
Q1: 1.2m
Q2: 500k*
Q3: 1.7m*
Q4: 4.0m*
Total 2014: 7.4m*
Total LTD: 11.3m*

Seeing as they did 600k more than I expected, I think this is a good estimate.

360:
Q1: 800K
Q2: 600K*
Q3: 700k*
Q4: 2.1m*
Total 2014: 4.2m*
Total LTD: 87.1m*

One:
Q1: 1.2m
Q2: 500k*
Q3: 1.7m*
Q4: 4.5m*
Total 2014: 7.9m*
Total LTD: 11.8m

MS said they wanted to ship more Xbox One's in Q4 than in 2013, so they sure did accomplish that. The drop off next quarter though is probably going to be huge.

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Microsoft FY2015 Q2: 6.6M 360+XBO Shipped

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