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Microsoft: We Lost as Much Money as We Wanted on Xbox

Sprong writes:
Outgoing president of Microsoft's Entertainment & Devices Division, Robbie Bach has been talking about his times at Microsoft and has shot one of the huge elephants in the meeting room: Microsoft was comfortable losing money on Xbox and Xbox 360.

He then justifies it, "It just turns out Microsoft is one of those unique places that will... forget whether we can afford it or not... that will... is willing to take those kind of bets. And I think sometimes people give us... because we're a bigger company and we... all those kinds of things, people say, well, you know, they don't bet big, they don't... they're not old, they're not innovative. I just kind of look around and I go, oh come on, I mean, Xbox to me, you know, in some mathematical way was a gigantic investment. And yet look, asset value paid off, earnings potential paid off, upside for the future pays off. Id' do that again in a heartbeat."

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piroh2756d ago (Edited 2756d ago )

so that is why they charge online play, wi-fi etc. they need to compensate their loss

xaviertooth2756d ago

microsoft lost money and still the gamble did not paid off well. it only paid off in 2006 and at some extent part of 2008 and that was with a perfect price cut timing when the price of ps3 is double of 360.

in 2009 when sony released consistently the exclusive games and eventually the price cut and slim, the kamikaze attitude of microsoft backfired against them as they cannot sustain releasing games that gamers will want to justify a 360 purchase.

now, they are only pinning their hopes on natal, however i feel that their solution will not warrant mass purchase of 360. sure some will be intrigued by it abd with the help of big budget on marketing, there will be a lot of people to own it but in the end, it will not have the mass appeal for sustainability in the market.

as with the ps3, sony knows that in the long run, its the games that will attract people flock to the system. sony's strategy at first is bells and whistle since at the beginning of the ps3 life, the games were not yet there. in its first years, sony did market ps3's abilities such as blu-ray, wifi, native harddisks, etc until eventually, when games keep on coming on a consistent rate, they now can convince people that ps3 has games and all the bells and whistles of a next gen console.

i think in this type of business, you can see how well-experience sony is as compared to microsoft where as of right now, you will feel confused on what xbox people are doing and trying to do next.