Xbox Losses Double, Xbox Shrinks

seldo writes "According to ITWorld, losses in the last quarter at Microsoft's Home and Entertainment segment have doubled. From the article: 'The segment, which also includes Microsoft's TV platform and PC games, posted a quarterly operating loss of US$348 million, compared with $180 million in the same period a year ago.'" An anonymous reader points to similar coverage at news.com, pointing out that the company also reports "profits for Office, and one small note about an undisclosed presumably Japanese company that Microsoft if propping up. So, the big question on my mind is, who is Microsoft secretly holding above water, and why? The fact that they are presumably Japanese, seems to point towards an XBox partner. Could this explain the sudden flood of Sega exclusive games?" Another anonymous reader writes "Microsoft will be showing a smaller sized Xbox at E3 this May. In addition to the smaller size of the hardware, the Xbox Lite will also be integrated with Media2Go allowing Xbox users to download digital content such as music and movies. Wonder what this means for all the current Xbox Mod Chips?"

Comments

I suspect it's Sega

[BrerBear]

It would have been much cheaper for Microsoft to bundle some of their own games, like Halo, with the Xbox. Instead they chose to bundle two games which Sega made exclusive to Xbox, and which didn't sell very well in their own right: Sega GT and Jet Set Radio Future.

My guess is that Microsoft did this to appease Sega and boost sales of their titles, in order to keep Sega making Xbox exclusives.

Rare

[NixterAg]

MS bought Rare in late Sept. for $375 million. I wonder how much of the $348 million reported as losses can be attributed to that acquisition.

Like them or not, MS is in the console business for the long haul whether they turn a profit within the next 3 years or not.

This isn't really news.

[siphoncolder]

We've all known for a LONG TIME that MS isn't going to make money on the XBox for YEARS. How is this news now that they've posted a loss this far into it? Didn't we already KNOW that?

MS has a history of going long-term with high-profile products, and it's paid off for them. This venture was no different, and losses were expected. Maybe if this story was posted say, 3-4 years down the road, it'd be newsworthy, since that's when MS is expected to BREAK-EVEN with the Xbox.

This sounds like editor & zealot bait - fanning the flames of hate. Woo-hoo, MS is losing money?

Woo-diddley-hoo, they knew it before we did. Get a grip.

Re:So is this good or bad?

[Autonymous Toaster]

Not necessarily-- could be spending more on R&D.

I hope not.

While I am not one to engage in schadenfreude for its own sake and I certainly support people's efforts in the area of embedded technology in certain parts of the home, I think these losses are good news on the whole. It's not that Mr. Gates's presence in the video game console market is itself really that important in real life - it's that Microsoft has repeatedly exhibited expansionist tendencies, and it's been pointed out that the very name "Xbox" is intended to mean "Anything Box" (ie. the "X" is a cheeky metasyntactic variable).

Not to be a conspiracist, but to me this implies that they have much more on their minds than video games. Imagine if their intention is to further expand beyond the digital media space they've so far occupied and on into real-world objects? Imagine if they make something that could be used to (mis)create toast? I find these prospects very alarming, and thus the news of the Xbox's impending failure can't help but be a little bit of a relief.