As expected, "Halo 3," the third installment in Microsoft's (NASDAQ: MSFT) highly popular video game series is selling well. Barron's writes that first week sales of the game are over $300 million. Microsoft was very modest about the accomplishment saying "Halo 3" is "the fastest-selling video game ever and already one of the most successful entertainment properties in history." The part about entertainment properties is a bit over the top.
But the sales of the game are not the important news. More critical is what "Halo 3" is doing for Xbox 360 console sales. One source said volume had doubled. The game is also driving sales of Microsoft's online game platform, Xbox LIVE. According to CNN Money, more than 2.7 million gamers have played "Halo 3" on Xbox LIVE in the first week.
When Xbox first hit the market five years ago, it was given little chance of catching the Sony (NYSE: SNE) PlayStation console. But Microsoft was willing to make a huge investment in the project. Over the last three fiscal years, the devices division of the world's largest software company has lost $3.7 billion. While the $300 million sales of "Halo 3" will put a dent in that loss going forward, the deficit will not be overcome unless Xbox 360 unit sales tick up sharply.
Microsoft still has to face a potential price cut on the Sony PS3, which needs to goose sales, and the already successful Nintendo Wii. At least it has something that customers can finally get excited about. Just in time for the holidays.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
10-04-2007 @ 8:15PM
Daniel said...
Microsoft, is in the mud? Where is the PS3, if it is still selling less than that outdated Xbox 360 every week? Well, they are all behind the Wii, which has a poor attach rate (Average amount of games purchased with a Console) and the largest market share, yet so few games sold. All I can say is that I am happy I got the Wii360 combo and hopefully Microsoft wins, because they are a software company bringing usability in a broad encompassing entertainment device their Xbox 360. Yeah!!!
10-04-2007 @ 10:52PM
Littletad said...
Halo3 may be "pulling" Xbox out of the mud.
fixed :)
10-04-2007 @ 11:39PM
Cliff said...
I think the commentator before me is incomprehensible. Yes the 360 is doing better than people expected and is doing beter than the PS3 for now. The PS3 has just about twice the power and will be a platform long after the 360 is replaced.
My company is giving away a PS3, to enter join groups.myspace.com/ninjatickets and check the event ticket engine, ninjatickets.com , to see if you have won.
10-05-2007 @ 12:25AM
shmiggy said...
I think the commentator before ME is incrompehensible.
PS3, in no way, shape, or form has twice the power of the 360. If that were the case, we would not STILL be seeing games that are not equal on PS3 to their countepart (multiplat games)... If the system were twice as powerful, the excuse that it is hard to develop for or that 360 developers have had "more time", would not even be breathed then would it??
10-06-2007 @ 9:09AM
Natural Select0r said...
300.000.000 dollar in one week? Thats probably more than all the other lousy XBoX shooters thrown together!
10-07-2007 @ 3:33PM
Ed said...
Cliff are you smoking crack?! The PS3 TWICE as fast as the Xbox360?! Are you mad?! If that was the case then the PS3 would be good enough to be considered a whole generation ahead of everyone else. And we all know it is not. I have the 360, the PS3, AND the Wii. In my opinion the Wii wins this generation because it was the most innovative this time around. Its basically a toss up between the 360 and the PS3 but the 360 edges out the PS3 because its cheaper than the PS3 and the graphics and everything else are just as good or better in most cases. Yeah, yean, "blue-ray" this and "blue-ray" that. Blue ray doesnt look any better than HD-DVD and its still a toss up as to which one will win out. My prediction: The playstation franchise will come in third place when everything is said and done.