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View Full Version : Microsoft reveals how much money X-box is losing.


IoriYagami n8
11-15-2002, 05:08 PM
http://newsvote.bbc.co.uk/1/hi/technology/2480001.stm

For the first time Microsoft is revealing how much money it is losing on its Xbox game console.
Documents filed with the US financial watchdog show that Microsoft's Home and Entertainment division, which includes the Xbox, lost $177m (?112m) in the three months to 30 September.

Since the Xbox was launched Microsoft has been forced to cut its price twice to boost sales.

The documents also reveal that five of the seven divisions of the company are operating at a loss.You will go on to read that while Microsoft is losing a heafty bit in the funding of X-box, as well as losing money in other divisions. The money they make with software makes up for any lose. X-box has lost a good chunk of money for Microsoft and it is expected to lose more in the coming months with servicing X-box Live. With all the features they backed into the X-box (most not needed in my opinion) it's no wonder they take such a lose. Nintendo I believe had a good strategy with Gamecube, while it doesn't do everything else, it plays games, and it brings in more money. It took Sony themselves quite a while before the PS2 started to bring anything in from software sells. It makes me wonder how much money Sony actually lost on their first year with the PS2 before the mainstream titles started to hit.

As of today I believe the X-box has been on the market here in the U.S. for one year. Happy Birthday X-box. Go out and buy your X-box something nice (like a Sega game).

DBJAY
11-15-2002, 05:23 PM
It took Sony two years to turn profitable on the PS2. They invested massive amounts of money into R&D, production, built new plants, advertising and all associated costs with launching the hardare, software developement and procurement...if I remember correctly, the tab was extremely high, in the 2 billion plus range. Honestly, I would be surprised if Xbox hardware truly isn't profitable until 2004.

8 bit Orgy
11-15-2002, 06:42 PM
Microsoft is doing OK. They only lost 177m in several months. That's a lot better than what happened at first. 177m isn't even a dent to Microsoft. I'm surprised they're doing this well.

Twelve
11-17-2002, 04:57 AM
Even if Microsoft is losing 1 BILLION in reality, it wouldn't be a dent to Microsoft. I tell ya, I don't care how bad they do, these boys are in it for the long run. You don't get to where Microsoft is now by giving up. Microsoft has got the money, Nintendo has got the pride....until their respective money and pride break down, Sony will always have these boys to compete with.

12

Overlord
11-17-2002, 05:51 AM
Nicole's Sky:
Even if Microsoft is losing 1 BILLION in reality, it wouldn't be a dent to Microsoft. I tell ya, I don't care how bad they do, these boys are in it for the long run. You don't get to where Microsoft is now by giving up.

Thats true. Also, it doesn't matter to Microsoft on how much they lose. Because they're trying to get as many Xboxes out there as possible. Hence, all the bundles at low prices. It might not help them build a huge profit this generation, but they'll have more developers lined up for the next one. They already have there 10 year plan planned out. They'll be here for a long time.

Monkey-King
11-18-2002, 03:42 PM
As people here have said Microsoft can stand to lose that money and can even stand to lose twice as much MORE in the long run. What will really begin to annoy investors and such is if the money is spent and there is nothing to show. At this point they lost money, but they gained a "world wide" acceptance of their system in the industry. The Xbox has gone from ZERO market share to whatever the heck their world wide share is now. And, from the look of things over the next few years they will steal market share from Nintendo and Sony. It will be slow and it will only be a few %, but it will be gains.

To be honest everything Xbox does from now on is going to be hard won from just being more aggressive and faster. When MS sees and opening they will take it, when someone shows their weak side they will hit it, when they can shake something up they will. Changing heads at the Japanese division was done for three reasons. One it?s the very act is a "Japanese" business practice...you don't perform you get replaced. People expect that it?s the way it?s done there. Doing that was the OBVIOUS move. Two ANYTHING that looks like something positive for the Japanese division can be trumpeted as the effect of the new management. The third put name back in people heads.

Microsoft will probably never make it big in Japan. But, will that matter? I think there is a huge computer revolution in the works that will make consoles, handhelds, PDAs, laptops, desktops, and 90% of AV equipment all change. In the end the companies the survive will be those that have a plan about convergence of devices and the companies they know what won?t be combined. And, you won?t need to be a Sony to do it right. But, what you will need to know is what to make? At this point anyone not thinking about the next machine in a RADICALLY new way will bet swept away. It will still have to be an appliance, but all the things that appliance will need to do will be very different.