MSFT never gets enough credit for what they've done with the Xbox. They've got the #1 machine (by games sold, the metric that counts) in their second at-bat in an industry that has historically dashed consumer electronics companies to bits. They somehow charge 23 million users for the same thing Nintendo and Sony give away for free. They've been at the forefront as far as connectivity and media consumption since the original Xbox. Despite the fact that everyone I know is already on their third or fourth unit due to Red Rings of Death, they all love it.
That's not such a magic number in this case. In most cases, console manufacturers make a loss on the console, and profit on the titles. Nintendo makes money on the console too, so it's not such an important figure.
IIRC, the PS3 slim is profitable. The PS2 has also been profitable and has been a consistently good seller (with some decrease in late 2009 and early 2010 (but that's expected - the PS2 is old). Console death rate is also a problem: even if it's not replaced under warranty, it's still a loss for the 360.
I also have a Wii ... it's just lying there. I just don't like it ... once you get passed the initial "wow" when trying out that controller, the games are pretty shallow and it is not capable enough to at least dazzle me with beautiful graphics.
Microsoft has not actually made a profit on the whole xbox debacle, something Sony managed in the first generation. Microsoft does not know how to not waste money, because they haven't had to for so long. They do it with everything, sometimes it pays off, sometimes it doesn't.
If Microsoft had just invested all that money in the bank, they would be a far richer company than they are now.
Of course, the xbox may start returning benefits now, or it may disapper in the next generation.
XBox has cost MS an enormous amount of money and they haven't recouped much of it as yet.
By late 2006, MS had already lost $4 billion to the XBox project 2 years later this was out to $7 billion. I think recently they've been turning a profit of about $200 million+/quarter
When you look at XBox as a business, it still have quite a long way to go. The amount of money sunk into the business is just astronomical. It may be profitable now on a Q by Q basis, but it will take years to pay the bill and there is no guarantee they can stay profitable as they invest in the next generation.
As for XBox Live, it is an impressive service, but the numbers may not tell the whole story. The article cites 23M XBox subscribers, but doesn't say whether these are paying (gold) or free members. I wonder what that mix is.
I'm not sure that's true anymore. I can't find a total figure but they turned the corner and became profitable in 2008, meaning they've now been running at a profit for 2 years. They now even make money on consoles.
Even if they're still in the red, the amount they've invested in it is trivial to MSFT. Whatever they spent, it was well worth it to get a web-connected, media-centric device connected to 40 million TVs.
Also there are ovre 40 million consoles sold, so that 23 million must be paying users. I can't imagine anyone having an Xbox without the free service (I'm not even sure you can).
And I'm looking forward to being able to watch ESPN 3 on the xbox. Another reason to never, ever consider getting cable again (could Live be the future of cable tv?)
Not likely - I found out that in order to receive ESPN on your Xbox360, your cable operator has to pay ESPN a monthly fee. So, your chances of getting it without also paying for the ESPN cable channel are practically nil.
Yet another example of ESPN being one of the worst content cartels of them all.
Well said. I'm almost as die-hard anti MSFT as they come (example: http://news.ycombinator.com/item?id=1462403 ), but I love my XBox360 (and the first XBox before that). They've done a great job with it, even through the hardware issues early on. I've been through three, but I was only without the machine for about two weeks total, and I didn't pay a dime to get them fixed.
