Microsoft's XBox 360 Division in the red...1.26 Billion?

[Lord Helmet]

http://www.next-gen.biz/index.php?option=c...88&Itemid=2

 

Of course, you have to take into account launch expenses, but sheesh...thats quite a deficit.

[Hyper_Eye]

There is nothing surprising here. MS is going to stick it out as long as it takes. The profit potential is to great for them to call it a loss.

[Jess Ragan]

Especially now that Sony is at its most vulnerable. There's a strong chance that Microsoft will gain control of the industry during this generation. The original Xbox sold pretty strongly and Microsoft has a lot of advantages in this console cycle. It will take at least a year for the Playstation 3 and Wii to catch up to its hardware sales... if they ever will!

 

JR

[ninjarabbit]

Combining the $4 billion they lost with the original X Box that's over $5 billion they've lost so far on video games not to mention their marketshare in Japan is about 1%. I don't care if they are Microsoft or not, they cannot abosrb these losses forever.

[moycon]

I'm confused. Is the 360 end-of-life now?

[dalton4life]

From what I've read I felt MS looked as Xbox and now Xbox 360 as stepping stones in securing a strangled hold on the video game market so they could be #1 (at least outside of Japan) when the next generation comes around it 6-7 years or so. It's a long term plan for world domination with them.

Edited October 13, 2006 by dalton4life

[moycon]

From what I've read I felt MS looked as Xbox and now Xbox 360 as stepping stones in securing a strangled hold on the video game market so they could be #1 (at least outside of Japan) when the next generation comes around it 6-7 years or so. It's a long term plan for world domination with them.

 

Actually MS pretty much said in an article a good while back they are less interested in the video games and more interested in having a box in peoples living rooms that can become their media hub. Movies, music, games, telephone all via IP and all through you game console. Most of the circuits in our network are being upgraded to OC-192 as we speak in anticipation for this. MS will have a heads up on everyone once speeds satisfy customers, they will already have a unit next to millions of TVs. Personally I'm not positive this will happen during the 360 lifetime, lord knows MS is trying to get people used to the idea. You already can download episodes of TV shows, trailer, game demo's etc... Thing is it still takes too long if you ask me. Regardless, once the kinks are worked out, the potiential for profit is enormous. and a lot of companies will be trying to do what MS is already doing. Getting their hardware in your house. Don't think Sony isn't doing the same thing. That's not to say they don't care about the video games, it's just not their only priority.

[SteveW]

I think Microsoft should just cut their losses in the Japanese market and pull out. Japan will never accept an American console. They consider non-Japanese games and consoles to be inferior. Microsoft should put that money into a region that actually wants them there.

[sega saturn x]

Microsoft should put that money into a region that actually has some taste.

Fixed

[JB]

Microsoft should put that money into my bank account.

Fixed.

[madhatter667]

Pwn!

[+swlovinist]

I know that Microsoft is in it for the long haul, but I dont see them making money with the 360. Each system looses money, just like the Xbox did. I also dont think that this holiday they are going to be doing great as well. The "buzz" is for the the two other systems, which will be bought and resold alot. This leaves the 360 out of the media and spotlight. While I think that that Microsoft is doing okay with their game system, I think they could do better. Only time will tell how seriously long they are willing to gush money on the game industry.

[Gabriel]

On the other hand, Black Friday is coming up and the only game systems on store shelves will be 360s and PS2s. (I haven't even seen a GameCube in a store for a while.) Chances are, those will be the only systems available throughout the Christmas shopping season.

 

The 360 library has grown a bit and improved. It's still sports, FPS, and racing heavy, just like the original XBox was. But, there's at least a little more variety with one or two titles of different genres. It's still nowhere near where it needs to be, but it's showing more improvement than the original XBox library did at this point.

[MCHufnagel]

I went to my local Sam's Club yesterday and only saw one Xbox 360 there. There were plenty of PS2's and Gamecube's sitting around though. So, I think that the PS3 and Wii shortages are already helping MS out.

I also read that MS is making a small proifit on each 360 sold. If that is true, then they will be able to cut prices before their competition. To the ordinary gamer a $250 (for example) X360 core is more appealing than a $250 Wii.

[moycon]

I've read after one year MS is making like $75 off every console as opposed to losing money (Something like $260-$300 off every console Sony is selling) . Keep in mind where the $$$ is at is in software sales, not hardware sales so this information probably is sitting very well with the MS powers that be. I know you don't see them making money swlovinist, but rest assured they are making money. It's something that will take time but like you say, MS seems in it for the long haul.