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Anyone have a clue what $ MS made on FS2002???

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My son and I were talking about this because he mentioned that a game he plays sold over 1 million copies in two weeks. I heard MS sold a million copies. Is there someone with a financial background in software production that would have a rough estimate ?TksBobG

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BobI hope that wasnt my reference :-) I was purely saying that when people refer to the sim as only being a $70 sim so what do you expect, $70 by a million copies is a lot of money.Maybe its 2 million :-) I would like to know tooPeter

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OK, it costs $70 (depends on where you buy it, whether you buy Pro or Std, etc) on average.Now, from each copy, $10 goes to the retailer. $10 goes to shipping, $10 to packaging, manufacture and shipping.Leaves Microsoft $40 a copy.With sales of 1 million (which I think is overrated) that's income for MS of $40 million.From that, they need to pay the development team who spent 2 years creating it and the support team supporting it. That's about $20 million.Leaves $20 million. Subtract marketting, taxes, royalty payments, etc. and you're happy when you are left with $7.5 million on a product that sells 1 million copies at $70 each. that's just over a 10% margin, quite in line with return on investment in most businesses but low for the software industry.

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JW,You can normally arrive at a pretty accurate figure by dividing (approx) the $70 by 50% all the way down. I think, your being generous at $10 shipping. Manufacture, packaging (on bulk) is a conservative $3.00. Dont forget MS has it's plants doing a lot of this stuff in house. With a big place over in Ireland supplying Europe and beyond.The retailers are on 100% mark up. Distibutors I'm not sure of the margins. Any accountants here ?George

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GeorgeWe are all guessing. Does anyone know how many copies Microsoft sell (approx)?

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Wait one second we're making a lot of assumptions here. Back up the facts. Where does it say MS FS2002 (all versions) sold over a million copies?????I'm not interested in whatever you guys can pull out of rumors. Does anyone have access to PC Data sales figures??? Erichttp://www.flycpva.org/images/msgbanner4.jpghttp://www.flycpav.orghttp://www.flysva.orghttp://Thai.virtualATP.orghttp://JAL.virtualATP.org

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Your cost estimates are a bit inflated.20 million is way too much for development costs. Even a from scratch simulator would only cost somewhere between 2 to 4 million to develop. And this product is definitely not from scratch.Shipping is way too much as well, $10 ??, no way. It doesn't cost MS anymore to ship a product than it would a product costing half as much. $10 a unit for packaging is also inflated (you have shipping there twice BTW).One would have to be insane to continue to spend more than $63 million in product development sales, etc, and only come out with a profit of approx 7.5 million. Ernie.

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In the end, it's a Corporation anyway. Profits from MSFS will subsidize other software development if nessesary. If it's not profitable, it will be dropped. That's why saying MS owes us a $70 million dollar simulator, or anything close to it is rediculous.L.Adamson

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They probably make a lot less than some of the, so called, "artists" who record and sell all that "rap crap" and call it music.:-)Actually, who cares how much money they make? The only thing I care about is that they produce the best simulator I can buy, and keep it affordable. In my humble opinion FS2002, fits that category very nicely! I am, certainly, not going to lose any sleep wondering if my purchase helped Gates, or anyone else, become a little richer.http://members.cox.net/pstepanoff/images/OK_c2.gifPete S

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According to "Guinness World Records 2001", Microsoft's Flight Simulator had sold a total of 21 million copies of MSFS by June of 1999.MSFS is THE best selling game title for Microsoft.MSFS is the #10 top selling game title of ALL TIME!MSFS AVERAGES about 2.3 million copies per MSFS release however, one can extrapolate that software sales rampups have occured as the PC has become more prevalent ie. circa MSFS 4.0 and above. Being that we are at version 11 (if you count MSFS 5.0 and MSFS 5.1 as seperate releases) you can estimate sales of approximately3 to 4 million for FS2002.Microsoft averages 29 cents on the dollar net income or about 29% of the retail cost of each software title (after taxes, development, shipping, marketing, etc.). Microsoft's actual average gross profit ratio is $0.86 on the dollar, which is quite amazing!!!Therefore one can estimate the following.MSFS 2002 Estimated sales = 2.0 million (conservative figure)Average retail cost of MSFS 2002 PRO = $70 USDMicrosoft's average profit margin per title = $23.33Estimated profit for FSFS ALONE = $40,600,000 (if everyone bought the pro version) but actually the fiture would be somewhere around $35,000,000 when you factor in the regular version too. STILL a tidy profit(Profit margin source: Doreen Chand - Microsoft Financial Analysis Aug 10 2002)With these kinds of figures anyone hoping to enter the market against worlds #10 best selling game title of which it is a monopoly, one will have to:1) Do EVERYTHING MSFS does2) Do it 100% better3) Have more features4) Be more realistic5) Still appeal to the millions of "average" Joes who don't care about the accurate depiction of the trailing gear linkage on a B757.6) Bring something new to the table.While we'll all like to see a "real" competitor to the MSFS dynasty the fact remains that no one has been able to accomplish all 6 of things on my list above and when I think back, SubLOGIC's ATP was the only competitor for MSFS (I never touched MSFS again until FS5 came out!) and it sold over 1 million copies!Mike T.

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MikeI was actually looking for the readers digest version :-). Im not complaining, actually I am really impressed. I certainly did not expect such a well rounded summary. Your response, if you hadnt noticed was the last response :-) After reading this response twice I certainly have no other questions. Mike, thank you very much!!!BobG

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And that $35KK is what makes the world go around. Not the features, not the details of aircraft, not the flight dynamics, not the ATC. .... Be thankful they can generate that level of margin on a prodcut with a cl of only $70. I am sure happy I don't pay the big bucks for FS like you have to do for Word, Excel or PowerPoint. The FS is more "talent rich" then just about any other program. You may not recall, but in times past, if you wanted to see if an IBM clone would run most all of the software you expected to use on it, you tested it with a FS program.The FS business unit manager and his team should be taking home some nice incentive checks this year. They have did it without a patch and with a relatively "open" system by providing all of the SDKs. Sure wish I was the bu manager, I would have a new yacht in my future! Bob8/10/02http://home.columbus.rr.com/beaverca/images/sequence.gif

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Mike thats it then forget this what do you expect for a $70 sim thing.FS2004 Brand new flight engine (no arguements) state of the art panel displays, full dynamic weather engine..........oh and at those sort of profits "full motion :-) Peter

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Importantly...Microsoft has positioned itself, and this "game" (used loosely), for large quantities of new business over time.The handwriting is clearly on the wall that Microsoft FS Products will someday be the major aviation industry training standard, very much akin to what Autocad did to the "high priced" world of drafting. Commercial, Corporate, and Govermental business alone will be staggering.Third partie developers will, at the very least, be equally responsible for this phenomenon.This MS Business Unit is a cash cow that's going to do very well for a long time. That's why we have the wonderful sim that we have.God, I only wish I had of thought of AVSIM..................First !!!Bob (Lecanto, Fl)AMD, Athlon XP, 2200+XP, Home Edition Sound Blaster, Audigy MP3+CH Prod, VPP Yoke - Sound CardCH Prod, Pedals - Sound Card

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Peter:Don't forget beautiful flight attendants, your choices of 'cheeken' or 'beef' and the smell of the lavatories on a full flight after 6 hours wafting though the air (I guess they will have to include scratch n' sniff tabs)! :-lol I want it all packed in the next version of FS2004 or else I am going to start a revolt! :-rollMike T.

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Interesting stuff about M$ on front page of:http://www.gamersdepot.com/Seems the MS R&D budget for next year will grow to $5.2 Billion, they are hiring 5,000 new employees next year, sales of WinXP is 46 million copies the first 9 months since release, and despite the recession XP sales rate is 160% stronger than the first 9 months of Win98.Or maybe they just hired funky accountants that stretch the truth :)I wonder what their total budget will be, not just R&D? And how many total copies Windows XP will eventually sell? Or for that matter all versions of Windows? Then there's Office, and the various "Business Solutions"? Bottom line: FS is maybe small potatoes to M$ ? :-eek== WHK ==

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As the Senator from Illinois said many many years ago, "a million here, a million there, a ......., pretty soon we are talking about some real money."A lot of small potatoes are one of the key ingredients to making a big potatoes soup that will make it through the thick an thin years. Sure don't want to have all the potatoes of the same hybrid, heaven help if a potatoe blight should happen.Great margins and excellent ROI keeps FS in the MS family.Bob

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Your numbers are way off dude. :) Americas army had a budget of 7 Million and most developers Cried because it blows thiers away and its a free game. :)MS makes money off FS2002. If it didnt they wouldnt do it. So you can bet your Five Bucks they make a profit.

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