01-23-2009, 11:40 PM
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Contributing Editor Emeritus
Join Date: Sep 2006
Posts: 1,053
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Zune Revenue Plummets
“Microsoft's newly-announced layoffs and declining profits aren't the only bad news in Redmond -- according to the company's quarterly statements, Zune platform revenue decreased $100 million, or 54 percent compared to the same quarter last year, due to falling device sales. Mega-ouch. Not all is doom and gloom for the Entertainment and Devices Division, which continues to be profitable with a $151m haul: Xbox 360 and PC platform revenue increased six percent to $135 million. Meanwhile, Apple saw a three percent increase in iPod sales over the same period, so we're anxious to see what Microsoft has planned for reviving the social.” (via Engadget) Can anyone say ‘ouch’? Year over year decline in revenue of over half is terrible news. Now I realize we’re the midst of a recession but that still doesn’t soften a blow like that to a division that needs to show some progress. I’m fairly confident the Zune won’t be going anywhere anytime soon at least. I believe its too important to Microsoft’s entertainment strategy in the long term. It does need to be relevant, however. It may be time that Microsoft looks at its Zune strategy and decide if it’s time to change anything. I think that if Microsoft could get some very tight integration with Zune and its Windows Mobile 7 platform they could have a real winner. But it has to be great. Windows Mobile is in so many hands right now that tying the Zune to that platform would be a powerful selling point for both WinMo and Zune. I’ve recently moved to Android but if WinMo 7 were to be Zune-capable then they could very well get me back.
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01-24-2009, 12:41 AM
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Intellectual
Join Date: Aug 2006
Posts: 251
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Not sure if tying the Zune with Windows Mobile is the answer here. With RIM, Apple, & Palm all making significant strides I think Windows Mobile is the big loser. All 3 of those phone makers have introduced devices that have had large WOW factors while WM hasn't really released a "gotta have it, right now" type of device.
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2.4 20" aluminum iMac - August 2007
2.2 15" MacBook Pro - January 2008
8GB 1G iPhone - January 2008
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01-24-2009, 02:30 AM
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Pupil
Join Date: May 2007
Posts: 18
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Man, I'm not liking all this negative Zune news recently. Coupled with the rumours of big layoffs at the Entertainment division (Cesar's departure could be a part of that, I'd guess), I don't like how things are going. I don't think Zune is going to be killed off, but I'm concerned about it's future nonetheless.
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01-24-2009, 02:44 AM
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Mystic
Join Date: Sep 2006
Posts: 1,608
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MS has deep pockets and has demonstrated in the past (Pocket PC's) they will absorb losses to get a platform going. But in the case of PPC's you could see the gradual momentum . . . I don't see any momentum with Zunes. How long will they be willing to lose money on them ? Jason indicated awhile back he was going to share his thoughts on the topic. Either he hasn't done it yet or I've missed it.
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iPhone 4S (16GB), AppleTV 2.0
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01-29-2009, 05:22 PM
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Banned
Join Date: Dec 2007
Posts: 372
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Quote:
Originally Posted by Espiox
Man, I'm not liking all this negative Zune news recently. Coupled with the rumours of big layoffs at the Entertainment division (Cesar's departure could be a part of that, I'd guess), I don't like how things are going. I don't think Zune is going to be killed off, but I'm concerned about it's future nonetheless.
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Caesar is gone? Wow great Microsoft you are making cuts in the right places! Now just show Major Nelson and Trixie the door and I'll be a happy camper.
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01-24-2009, 03:58 AM
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Ponderer
Join Date: Nov 2006
Posts: 94
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Quote:
Originally Posted by David Tucker
I think that if Microsoft could get some very tight integration with Zune and its Windows Mobile 7 platform they could have a real winner.
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I agree with this but they don't have time waiting for WM 7. They need to release this along with WM 6.5 later this year.
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Windows 7 - Gateway Laptop, Windows 7- Gateway Desktop - Dual 22" LCD
Windows 7 Media Center - HTPC homebrew, Dual Tuner
XBox 360, Zune 120 and Windows Home Server - HP MediaSmart (3 TB)
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01-24-2009, 04:41 AM
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Intellectual
Join Date: Nov 2007
Posts: 212
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What Cesar is gone?!!! OMG
After all this should I be selling my Zune120?!  Seriously, they need to do something about promoting the Zune. I'm wondering if the recent limited updates to the hardware was a sign.
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01-24-2009, 09:16 AM
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Developer & Designer, News Editor Emeritus
Join Date: Aug 2006
Posts: 12,959
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Quote:
Originally Posted by David Tucker
I think that if Microsoft could get some very tight integration with Zune and its Windows Mobile 7 platform they could have a real winner. But it has to be great. Windows Mobile is in so many hands right now that tying the Zune to that platform would be a powerful selling point for both WinMo and Zune.
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Integration with the Xbox is also worth pursuing. There's so much that the Zune and the Xbox 360/Live platforms have in common that it'd be a shame if they were kept separate for years to come. And, of course, they need to start selling the Zune worldwide - but I've said that so many times that I'm probably just beating a dead horse now.
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01-24-2009, 07:20 PM
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Intellectual
Join Date: Nov 2007
Posts: 212
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I agree, Microsoft needs to sell their hardware globally. I'm still wondering why they didn't upgrade the hardware, it's a sign I believe. They knew they were losing money and couldn't afford to upgrade the hardware last year. I feel this year will not be good for the Zune. I think they will keep trying to move their zune os into windows mobile devices but they should look into other gadgets too. I don't know anyone who is happy with their win mobile devices.
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01-24-2009, 07:46 PM
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Ponderer
Join Date: Nov 2006
Posts: 94
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Quote:
Originally Posted by Darius Wey
Integration with the Xbox is also worth pursuing.
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Good point. They really need to find ways to make Zune an essential companion to XBox. Here are a few ideas...
- Expand Zune Pass to include XBox Gold access.
and/or
- Expand Zune Pass to include a number of TV show downloads per month (perhaps 10/mo).
- Merge XBox and Zune marketplaces and allow XBox to stream music from marketplace.
- Create a hyper social environment combining both XBox and Zune worlds.
I think every XBox Gold subscriber would find value in bumping up to Zune Pass.
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Windows 7 - Gateway Laptop, Windows 7- Gateway Desktop - Dual 22" LCD
Windows 7 Media Center - HTPC homebrew, Dual Tuner
XBox 360, Zune 120 and Windows Home Server - HP MediaSmart (3 TB)
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Hybrid Mode
