Tech Check
More Videos
MOST SHARED
- Amazon, Viacom Close to Web Video Deal
- Government Bailout Actually Hurt Housing Recovery: Zell
- What the New 401(k) Rules Mean for You
- Morici: Curb Trade Deficit, Rev Up Oil to Engineer More Growth and Jobs
- 6 Stocks Unworthy of Biotech Bull Market
- Goldman's van Praag to Retire End of March: Memo
- Stock Market's Three-Year Rally Has Fed to Thank
- 'Greece Should Default Instantly', Economics Professor Says
- Time Warner Earnings Beat Estimates; Shares Rise
- Stocks on the Move Now: Caesars Entertainment Soars
- Stocks on the Move Now: Caesars Entertainment Soars
- 6 Stocks Unworthy of Biotech Bull Market
- Morici: Curb Trade Deficit, Rev Up Oil to Engineer More Growth and Jobs
- Disney’s Earnings Beat; CEO Bob Iger Talks Piracy, Parks
- Three Phases of the Rally to Watch Out For: Strategist
- Morgan Stanley Bulls Look for More
- Guest Blog: Tax Doesn't Have to Be Taxing
- Top 4 Staffing Stocks for an Improving Economy
- Coke Is a ‘Recession-Proof’ Stock: Analyst
- What Would Happen If the Fed Were Actually Abolished
- Government Bailout Actually Hurt Housing Recovery: Zell
- What the New 401(k) Rules Mean for Your Savings
- Santorum's Three Victories Revive White House Hopes
- Front-Runner Mitt Romney Struggles to Seal the Deal
- New York Housing Market Could Still Collapse: Analyst
- Frustrations Soar as Greeks Seek Elusive Bailout
- 'Greece Should Default Instantly': Economics Professor
- 12 Unique Dating Sites
RSS FEED
Microsoft CFO Liddell Talks To Me About Jaw Dropping Earnings
Text Size 
Silicon Valley Bureau Chief
 |
CNBC.com |
] was poised for a strong quarter, but it was the breadth of its success, and optimistic guidance that took me, and so many investors, by surprise. I had the chance to speak with the company's CFO Chris Liddell on the air earlier this morning. Needless to say, he had lots to say and for a normally conservative guy at a normally conservative company, he had lots of optimism to share. His words, and Microsoft's numbers, are going a long way toward lifting a lot of listing tech boats on the Street today. (Read my second post with Liddell here.)
In this post, I want to focus on Microsoft's entertainment and device division, a beleaguered division at the company that lost billions as it tried to gain traction in the marketplace, first against no less a competitor than Sony [SNE
Loading...
()
] . But then later, Nintendo [NTDOY
Loading...
()
] .
So in the midst of all that stiff competition, $3.06 billion in revenue and more importantly $357 million in profits. That bottom line performance more than doubled the division's performance in the previous quarter. Seems like both Xbox and Zune are more than merely "other" Microsoft initiatives; they're actually now real contributors to the bottom-line.
I asked Liddell about that. He told me when it comes to the gaming sector, it's all about the "attach rate," the number of games and accessories consumers buy along with the console itself:
"We're now at a stage where we sell about 7 games per console and that's a record certainly for any console and relative to history. So people are now actually spending more on the games and accessories than they are on the underlying console, so that business model that we put in place the last couple of years is certainly starting to fire."
And because of that, entertainment and devices is hardly a one-hit wonder: this hardware could become the gift that keeps on giving for Microsoft's bottom line.
(In my next post: Microsoft's surprising success in its online business. Watch out Google?)
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes
