DazV

Good job Microsoft have got deep pockets...

Microsoft are projected to lose £525 million on Xbox this year, according to internal estimates from the company. The figure relates to the current financial year, which ends this month, with next year's losses expected to reach £720 million.

Alarming as these figures sound, worry not Xbox owners - Microsoft have the deepest pockets of any games company in the world and expect to lose money on Xbox for years before beginning to see a return on their investment.

At the moment, Microsoft are estimated to lose around £100 on every Xbox sold in the US, with per-unit losses even higher in Japan due to its reduced price there. In Europe, though, the loss per machine is around the more reasonable mark of £33 a pop.

While Nintendo and Sony are projecting the cost of hardware manufacture to decrease over the coming years (for example, by integrating components), Microsoft’s use of off-the-shelf components will prevent them from taking advantage of such a strategy.

Still, Microsoft are very much in for the long haul and will be able to absorb such losses for years in order to attain their ultimate goal of dominating the games market. It's just that, the way things are looking at the moment, they might have to wait until Xbox 3 or 4 to do so...

mark_h

I thought consoles were traditionally sold as a loss-leader, with the real money coming from a cut from every game sold.

RB5-Black

At £199 the X-box is cheaper in the Uk than it is in the US of A.


That makes a change

RB5-Black

since when did you see the price of a 733 mhz processor or a HDD stay the same. These components will degrade in price just the same as anything that sony or nintendo has in their console. IMHO the off the shelf components will be cheaper than that of the parts that sony and nintendo have to Design/Manufacture
yes I know ATI do the graphics for gamecube before the flames start.

I own all three latest gen machines and they all have good and bad points.

Black.