Tag Archives | Microsoft

Microsoft Revenues Fall, but Beat the Street

Posted by David Worthington on October 23, 2009 at 1:43 pm

Microsoft managed to beat the street by clamping down on costs, but its first quarter earnings still fell 18 percent from this time last year. Office and Windows licensing sales declined, and Microsoft’s Entertainment and Devices division’s revenues fell flat.

The company’s financial reports, released today, showed revenue of $12.92 billion with a net income of $3.57 billion. Its earnings per share were $0.40, which beat estimates. Earnings were reduced by the deferral of $1.47 of revenue from Windows 7 pre-sales.

Microsoft’s revenue would have fallen a more modest 4 percent from last year had Microsoft delivered Windows 7 to customers and recognized the pre-sale revenue this past quarter, according to the company. Windows 7 shipped yesterday; Microsoft’s quarter ended Sept. 30.

“We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows,” said Chris Liddell, chief financial officer at Microsoft. “We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions.”

There was a 6 percent decline in sales of Windows to OEMs, including revenue and units associated with Windows 7. Fewer customers purchased premium editions of Windows, which the company attributed to increased demand for netbook PCs. Netbook sales have been a persistent drain on Windows licensing revenues over the past several quarters.

Sales of Office 2007 fell 4 percent, due to reduced demand among business customers, and a shift to lower-priced products among consumers, according to Microsoft.

Office 2010 is due to ship in the first half of next year. It remains to be seen whether there will be a strong business case for customers to upgrade. Office 2010 focuses on delivering new online services.

Lastly, Microsoft’s Xbox 360 gaming platform offset a 14% decrease in the sale of PC hardware products, Zune devices and services, and embedded device platforms. The division is responsible for producing PC peripherals, Zunes, and Windows Mobile sales.

I’m interested to see how Windows 7 sales will compare to Windows XP’s first quarter. There is pent up demand among customers to upgrade, and many organizations bypassed Windows Vista altogether. Needless to say, Windows 7 is an extremely important product for Microsoft.

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Blu-ray as an Xbox 360 Accessory, Says Ballmer. Wait, What?

Posted by Jared Newman on October 22, 2009 at 1:04 pm

xbox_hd_dvd_bigIs Microsoft planning a standalone Blu-ray player to go with the Xbox 360? It would appear that way from a quote Gizmodo dug out from its interview with Microsoft chief executive Steve Ballmer.

Asked whether Microsoft will add a Blu-ray player to the Xbox 360, Ballmer said “Well I don’t know if we need to put Blu-ray in there—you’ll be able to get Blu-ray drives as accessories.”

On follow-up with Microsoft PR, Gizmodo got the same line that we’ve already heard from Microsoft, that its current plan is to support streaming video and on-demand movies from the Zune Marketplace. “As far as our future plans are concerned, we’re not ready to comment,” the handlers said.

A couple things to consider: First, if you watch the interview, Ballmer’s remarks aren’t as clear as they appear in quotes. It seems as if he’s throwing out the Blu-ray comment off-hand, not announcing a new product, and Ballmer is pretty guarded in the rest of the interview. Second, Ballmer has slipped up before. In June, he spoke of a new Xbox 360 model in 2010, leading to speculation that the Project Natal motion sensor would launch with a redesigned Xbox 360, and forcing a flurry of carefully-worded denials from Microsoft that any new console was on the way.

I would guess that Ballmer was merely talking about owning any old Blu-ray player on the side, but the wording of Microsoft PR is intriguing, because it’s not a firm denial. Maybe the company’s keeping its options open.

That said, I don’t think the Xbox 360 needs a Blu-ray player, especially an external one. Sure, it could allow you to launch movies from the console dashboard and sign into Xbox Live while watching a film, but those benefits seem negligible to me. Besides, Microsoft already bet on HD-DVD with an external player (pictured above), and it failed. If the Xbox 360 is supposed to live until 2015, as executives assert, Microsoft should stick with online video instead of saddling consumers with another technology that will ultimately be overshadowed.

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Windows 7 Ads With Grownups in Them

Posted by Harry McCracken on October 22, 2009 at 4:28 am

Maybe Kylie won’t be doing all the heavy lifting of marketing Windows 7 after all. With Windows 7’s official rollout, Microsoft has segued into a new twist on its “I’m a PC” tagline: “I’m a PC, and Windows 7 was my idea.”  As Microsoft ads go, I like this one–it’s less patronizing than most. On the other hand, it sure follows in the tradition of other Microsoft ad campaigns whose basic message was this: “Remember that product we told you was amazing a few years ago? It’s junk–upgrade now!”

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Windows 7 Device Stage: Ready, Set, No Go!

Posted by Harry McCracken on October 22, 2009 at 3:18 am

Empty StageSo help me, I like Windows 7. Its emphasis on staying out of users faces whenever possible is a huge sea change that makes it the most pleasant version of the OS in eons. I’ve been running various pre-release iterations for a year now, and look forward to booting into the thing–a radical improvement over Vista, which usually had me gritting my teeth as I pressed the power button. Here’s a long and favorable review which I wrote for PC World.

But as Windows-reviewing pundits go, I’m relatively cautious. Windows 7 may be launching today, but there are things we won’t know about it until millions of people try to install it on millions of PCs, each of them unique. And there are other aspects of the OS whose success is contingent on work yet to be done by parties other than Microsoft. Like, for instance, Device Stage, the new feature which lets makers of cameras, printers, and other gadgets create customized user experiences within Windows 7.

When I wrote that PC World story a few weeks ago, I tried to review Device Stage and gave up: None of the gizmos I plugged in gave me the results that Microsoft was touting for Device Stage. The company told me that manufacturers were still readying their Device Stage support in preparation for Windows 7’s launch day. Well, that day is here–so I’ve been revisiting Device Stage on a couple of Windows 7 PCs. My experimentation is limited and unscientific. But so far, it’s left me completely disappointed with the feature.

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Twenty-Three Years of Windows Launch Oddities

Posted by Harry McCracken on October 22, 2009 at 1:30 am

predictaLater today in New York City, Microsoft will be hosting its Windows 7 launch event. I won’t be there, but I have a good excuse: I decided to stay home in San Francisco and go to the last day of the Web 2.0 Summit to see Tim Berners-Lee speak. I hope everyone who makes the trek has a good time, but I’m also keeping my fingers crossed that nothing transpires that leaves me kicking myself for not attending. (Microsoft plans to stream the event live starting at 11am EDT, so those of us who aren’t there can check in on the festivities.)

In lieu of being at the 7 launch, I’ve been revisiting old clips relating to Windows launches past. Join me, won’t you?
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The Games Industry’s Redeemer: Halo

Posted by Jared Newman on October 20, 2009 at 9:09 am

ODST-frontVideo games sales bounced back modestly last month, snapping a six-month streak of declines from 2008, according to the NPD Group’s monthly sales figures.

Overall, North American game sales were one percent stronger last month than they were in September 2008. But software revenues were stronger than hardware, climbing 5 percent compared to the same month last year.

The reason, of course, is Halo 3: ODST, proving that Microsoft’s cash cow hasn’t dried up. ODST sold 1.52 million units last month, making it far and away the leader in software sales. Wii Sports Resort, a sequel to the pack-in classic Wii Sports that includes an accuracy-boosting MotionPlus peripheral, trailed in second with a mere 442,900 sales.

What’s interesting is that, despite past months of doom and gloom for the industry, gaming had its second-strongest September on record. The only September to top it was in 2007, led by — you guessed it — Halo 3. That month, the franchise’s Xbox 360 debut sold 3 million copies, while the next best-selling game, Wii Play, sold just 282,200 copies. To put it another way, the Master Chief basically carried the games industry on his back, and did so again last month without even starring in ODST.

It’s safe to say that the Halo craze is nowhere near over. ODST, which was originally conceived as an expansion pack, was criticized for being short and showing the series’ age, but it still received favorable reviews and sold phenomenally well. When the next full game, Halo: Reach, arrives next year, I’m guessing that even the people who avoided ODST (myself included) will want to take a look. Clearing the 1.5 million mark should be a breeze, and the games industry will look mighty once again.

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1999 Microsoft Store vs. 2009 Microsoft Store

Posted by Harry McCracken on October 20, 2009 at 2:45 am

It’s official: the first Microsoft Store will be opening on this Thursday at 10am in Scottsdale, Arizona–logically timed to coincide with the launch of Windows 7. Nearly all articles about the company’s foray into retailing (a) point out that it’s a delayed reaction to the mammoth success of the Apple Stores; and (b) mention the fact that Microsoft’s first mall store was MicrosoftSF, which opened at San Francisco’s Metreon in 1999 and lasted only a little over two years before folding. (It was apparently an early victim of the Metreon curse which has since claimed nearly all of the mall’s merchants except for its movie theater, a bookstore, and some of the restaurants.)

Nobody accused Micorosft of aping Apple with MicrosoftSF–because that first Redmondian storefront opened almost two years before the first Apple Store did, and closed a few months after the Apple Stores got rolling. I visited the store several times, but don’t remember it very well, which might be part of the problem; it didn’t have a lot of personality. (If anything, it was in the mode of Sony’s Sony Style stores–in fact, it was actually operated by Sony, not Microsoft.) We’ll see if the new effort takes off–I’m still trying to figure out whether the world really needs a store devoted to the disparate stuff that Microsoft sells.

Here’s a quick comparison of the Microsoft store of 1999 versus this decade’s version, based on resources such as Microsoft’s original press release and a largely favorable piece Salon published at the time. Microsoft seems to be trying hard to keep what’s inside the Scottsdale store a surprise until Thursday, but I’ve pieced together some information and speculation based on sources such as Gizmodo’s leaked concept presentation for the chain.

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Office 2010 Goes Public Next Month

Posted by Harry McCracken on October 19, 2009 at 11:22 am

office2010logoMicrosoft is planning to release a public test version of Office 2010 next month, reports Cnet’s Ina Fried. The company’s technical betas of the suite and its Web-based version have been open to only a relatively small pool of testers, so the upcoming release will be the first time that anyone with an interest in what’s next for Office will be able to get some hands-on experience.

I’ve spent time with Office 2010 in its software and service incarnations, and while there’s some good stuff in both, I’m still reserving judgement until Microsoft releases more fully-baked versions–the Web suite and other collaborative features in the previews I tried were simultaneously the most (theoretically) interesting new features and the furthest from completion. (Large chunks were still simply missing in action.) Let’s hope the November preview is feature-complete, or close to it…

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An Xbox Live Price Hike? Pachter Says Yes!

Posted by Jared Newman on October 19, 2009 at 11:03 am

xboxlivecardI should know better than to springboard off the thoughts of video game industry analyst Michael Pachter, but sometimes it’s irresistable. The guy’s got a knack for being provocative.

His latest theory? Microsoft will, over time, double the Xbox Live subscription cost from $50 to $100 per year. Speaking on Game Trailers’ Bonus Round broadcast, Pachter said Microsoft “wants to hook every gamer who has a 360 to play everything multiplayer, and pay 50 bucks a year; and then in a couple of years it’s 100 bucks,” adding that “it’s a profit deal” for the company.

If Microsoft so much as touches the cost of an Xbox Live Gold subscription, it’ll be huge news. Since the online gaming service debuted for the original Xbox in 2002, the price has held firm at $50 per year. And earlier this year, there was a downward trend, with many third-party retailers selling discounted annual subscription cards. The fact that Xbox Live costs anything at all has also proven great fodder for Sony loyalists, who get their Playstation 3 online gaming gratis.

I’ve always felt that Xbox Live is worth the cost of admission, which is less than you’d spend on one game per year. It’s better integrated into the console’s DNA than Sony’s network, and cross-game voice chat makes communicating with friends nearly effortless. Is it worth an extra $50? Tough call.

See, Microsoft is adding new features, such as Twitter and Facebook integration, the 1 vs. 100 quiz show and the ability to watch movies with online buddies, so you can’t say that a price hike isn’t at all justified. But the core service of online play hasn’t evolved much over the years, or at least not since Halo 2 pioneered an automatic matchmaking system for finding other players. Online play remains a hotbed for foul-mouthed sore losers and spoiled winners, and bigger picture ideas such as tournaments and clans are largely missing.

The extra services aren’t worth an added cost. If Microsoft were to inch up the subscription price, I’d probably think hard about what I’d miss with the Playstation Network alone, an then set a limit on what I’d pay for Xbox Live ($60 seems reasonable). If you’re not blessed with both consoles, just hope that Pachter is wrong this time.

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