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XBox + UltimateTV for $500

Posted by ryuzaki0 on from the integration-time-come-on dept.

Daetrin writes "Red Herring reports in this article that Microsoft is planing on combining the XBox with their UltimateTV Recorder with a projected final cost of about $500. The article also talks in some detail about the massive (though partially expected) losses that the XBox is costing Microsoft. There's also another article on Yahoo that sums up what Red Herring said."

2 of 297 comments (clear)

  1. XBox: How long can it defy the laws of economics? by bryanbrunton · · Score: 5, Interesting


    The XBox really really is amazing. Here we have a product that defies the laws of economics. At this point its just a matter of how much money Gates and Ballmer can stand to lose. Its an ego thing. Every other company on the face of the planet would drop a money losing project like the XBox as fast as possible. The world is filled with companies that are not named Microsoft which have stock holders and corporate boards that actually have influence over the decisions of executive management. Not so with Microsoft.

    We all know that XBox is finished in Japan. If Microsoft is lucky they will manage to sell their original shipment of 250,000 Japanese XBoxes before the end of this year.

    http://www.the-magicbox.com

    The XBox is in the process of dying in Europe. Just look at the European software charts. The XBox has just one exclusive game in the top 20:

    http://www.elspa.com

    And now one of MS game developer partners has pressured MS into allowing it to publish title for the Nintendo GameBoy:

    http://biz.yahoo.com/rf/020625/tech_thq_microsof t_ 1.html

    Is there anyone out there who will force Gates and Ballmer to come to their senses? Or would dropping the XBox at this point be such a face losing position for Microsoft that they have no choice but to keep throwing money at it?

  2. Lotsa Money by fm6 · · Score: 5, Interesting
    Jeez, look at those figures. MS has $40 Billion in cash and $30 billion in annual revenue -- one-third of which is profit! At that rate, they can sustain the losses of the X-Box division forever.

    And in fact they sort of need to spend money. It might sound nice to have so much cash lying around, but for a big corporation it can be a nightmare. In the current money market, that $40 Bil will not stay $40 Bil for long. And since they follow the "recycle the profits" model (MS stock does not pay dividends), it's only going to get worse. Better to throw the money at a Blue Sky project and tell the stockholders they're generating long-term growth. Which might even be true.

    But damnit, it's time to drop all the Reagan-era cliches and face facts. That much economic clout in the hands of one company is bad for the whole software industry. Including Microsoft. This is not a free market. Pretending otherwise is like saying Al Capone was just another illicit beer vendor.