Microsoft Quarterly Results

Microsoft had their quarterly financial report conference call yesterday after the Stock Market closed.

Microsoft's Entertainment and Devices division (of which the Xbox and Xbox360 are part of) reported 70% growth across all of it's offerings in this division. The Xbox360 and the Interactive Gaming portion of that business more than doubled it's growth.

Microsoft remains committed to world domination with it's Xbox360. As of the end of September, the Xbox360 is available in 36 countries and has an installation base of 6 million so far. The breakdown of that is 3.6 million in North America. 1.7 million in Europe and 700,000 for the rest of the world.

They are still saying that with the holidays sales coming on in this quarter, their still confident in reaching the 10 million Xbox360 install world wide by the end of the this quarter. Also by the end of this quarter, the Xbox360 catalog of games will be at 160 high definition for gamers to choose from.

Accessory and software attachment rates for the Xbox360 remain high and are the biggest money makers for Microsoft. In the first 10 months, the Xbox360 attachment rate is 2.9 accessories and 5.1 games. This is very high, certainly higher than the Xbox and probably higher than any other console's first year numbers. Microsoft will have new accessories available this quarter, the wireless Headset, HD-DVD drive and wireless Racing Wheel so attachment rates for accessories is projected to remain strong for the next two quarters.

Xbox Live continues it's success as the premier console online gaming network. To date there are 4 million subscribers world wide and the projections are for 6 million by June of 2007. Marketplace is a breakout hit among Xbox360 owners with 70 million downloads, 12 million of those being Xbox Live Arcade games. To date more than 2 billion Microsoft Points have been spent in the Marketplace which (if my math is right) is $25,000,000 in real US money.

This quarter is going to be a very interesting one to watch. Sony will most likely be a non-issue due to extremely short supply. But Nintendo will have 9-11 million units available over the course of the holiday shopping season. Wii is $50 cheaper than Xbox360 Core and is wireless at that price point. The games are $10 cheaper than Xbox360 as well. So when shoppers can't find Playstation 3 which are they going to choose? Microsoft needs to count on them picking Xbox360 to make that 10 million mark.

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