Xbox Division Down $4 Billion

Forbes, in a long article about Microsoft's monetary situation, drops the news that the Xbox division is $4 Billion in the hole over the last four years. From commentary on C|Net: "That's a lot of money, even for Microsoft, which Forbes also says has a war chest of $40 billion in cash. Just before Thanksgiving, Microsoft will launch its next-generation console, the Xbox 360. The early word is that the 360 will also start its life as a loss leader, though Redmond insists the new box will soon be a moneymaker. Either way, it's got a long way to go to get back to even, and though Microsoft is a rich company, it surely doesn't want the Xbox 360 known as an albatross around its dividend-paying neck."

Comments

Re:Sell the Hardware at a Loss

[Dan Ost]

I am just speculating here, but I would be willing to bet that the XBox division would be a lot closer to being in the black if the XBox didn't tank in Japan.

There's a tautology for you: "If they had sold more of it,
they would have made more money selling it"

Seriously, they never expected to make serious money with
the original XBox. The whole idea was to lose as little
money as possible while getting the mindshare to allow the
XBox successor (which turns out to be the 360) to make
serious money. The real question here is whether a
4-billion loss is a reasonable loss for what they've
accomplished, and we won't know that until we see how
successful the 360 is.