[QUOTE="Aparthide"]Why did Microsoft even enter the console business? It seems to me that all they're doing is throwing away money. By the time they start making profit they need to spend billions for their next generation console. And in total the profit is only a fraction of the expenses.
shawn30
Their gaming division has been making a profit the last 3 or 4 years. The Xbox 360 is profitable and in the black despite RROD and everything else. Count yourself educated.
2013 article "Microsoft Xbox division has lost $3 billion in 10 years". So on the whole, XBOX is still not profitable since it's inception.
http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years
Sure, It's been profitable for a few years now with it's biggest year apparantly being 2011, but new console almost always means it will lose money it's first year or two. So the hole for the XBOX will just get deeper.
I can tell you, signing huge frivelous NFL deal, massive Halo TV deal, and Billions more on advertising seem more like "throwing the kitchen sink" at a problem than running an efficient, profitable business. Steve Balmer needs to reign these madmen (at the Xbox division) in before they destroy the company.
Their deal with AMD alone on the hardware side is reported at another $3 Billion. The overall hardware costs must be double that or more when you factor in R&D and manufacturing facilities (just talking fixed costs, not variable costs of production).
http://www.vg247.com/2013/05/27/amd-microsoft-deal-for-xbox-one-cost-over-3-billion/
Again, do the math for how many consoles they will need to sell even assuming a generous $100 profit margin (which will *NEVER* happen at launch). At this pace of spending they are virtually gauranteeing that XBone will not be profitable. But what's worse, they are putting more money at risk so that if it's not successful you won't just have your normal "console launch" losses, but you could have multi-billion write-downs on top of them. Which is basically the same thing that happened to Sony last gen.
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