120°

Former Xbox head says original Xbox lost 'between $5 billion and $7 billion'

The original Xbox ushered in a new era of gaming for millions of people, and it introduced us to some of the most famed franchises and memorable characters, some of which we still enjoy to this very day. While it was a revelation for developers, gamers and global culture, the system ended up costing Microsoft quite a bit.

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examiner.com
RuleNumber53149d ago

They did initially with the original, but the Xbox 360 more than made up for it. The Xbox division has been a very successful investment for Microsoft.

3149d ago
yewles13149d ago

"but the Xbox 360 more than made up for it."

http://www.neowin.net/news/...

Death3148d ago

@Thrust,

Sony shareholders have said the same for PlayStation. The more concervative shareholders think the money invested should be allocated to higher profit divisions. As for Microsoft losing money "except a couple years", they have been consistently making money with Xbox since 2008. that is 7 straight years of profits within the division. You can check their financials online to verify this if you like.

A small portion of the money they are making was used to fund the $100 million used on the controller.

freshslicepizza3148d ago (Edited 3148d ago )

from this same article,

"Mathematically, certainly, if you look at the original Xbox, it’s just true. The original Xbox lost, depending on who is doing the accounting, somewhere between $5 billion and $7 billion. I think of that as an investment, and everybody ultimately can think of that as an investment, because we know the end of this story. The end of this story is that the successor product made billions of dollars, even with the write-off, and has built an asset for Microsoft that’s worth billions of dollars by itself," Bach told

the xbox 360 made billions of dollars, even with the write off for the rrod.

@Thrustmaestro
"Why do you think some of the major shareholders wanted to ditch it at one point?"

good luck thinking that will happen anytime soon.

http://www.gamespot.com/art...

nedalla is the main guy at microsoft. 'HE' makes the decisions not any shareholder and it was only 2 shareholders to begin with.

read what he said, nothing even hints at xbox being a secondary thought. so stop worrying about how much they make or lose on the xbox and look at the product itself and make your own opinions on it.

BeefCurtains3148d ago

This will be a 1000 degree topic soon. You heard it here first.

Whether or not it made money is irrelevant to today, the X1 has given me a ridiculous amount of great entertainment. That's all I need to know.

Bigpappy3148d ago

@Thrustmaestro: That like adds nothing to support your assertion. 360 made money most to the years it has been on the market. RRD did hurt early on, but 360 did very well financially. Stop trolling with nothing to support what you are saying.

scientificreasoning3148d ago

No it did not, 360 never came close to recuperating loses, stop spreading fud.

badboyz093148d ago

The Xbox Division has never made any real Profit. Point being Microsoft isn't in it for the money.

3148d ago
Charybdis3148d ago

"The end of this story is that the successor product made billions of dollars, even with the write-off, and has built an asset for Microsoft that’s worth billions of dollars by itself," Bach told GeekWire."

christocolus3148d ago (Edited 3148d ago )

@Moldybread

Well said.

you beat me to it.I was about to post Nadellas comments from that gamespot article. The guy has been very straightforward about his plans for xbox even calling it a key part of the companys future, he was at E3 this year and he met with xbox fans after the show. The quote from this article is quite clear but its funny how most here will intentionally skip it and act like it was never stated. Lmao. XD.

Griever3148d ago (Edited 3148d ago )

Microsoft has never made any money on the Xbox. Maybe a little bit during one or two quarters once in a while but overall it has been nothing but losses. The problem is they spend far too much on buying exclusives, buying timed-exclusives, buying DLC, serving warranty claims (Xbox 360), and marketing ($500 million on just promoting Kinect). Just search the internet and one can find several articles and reports. Here are just few of them.

http://www.destructoid.com/...

http://www.dualshockers.com...

http://www.neowin.net/news/...

http://www.gamespot.com/art...

http://www.destructoid.com/...

Microsoft never cared about making a profit with Xbox. Their actual goal was to reach the living rooms and then take over them as an entertainment hub for movies, music and television. Xbox and gaming were just a trojan horse. They tried to fulfill their plans with Xbox One but failed and are now stuck with a games console they never wanted. Some industry experts even say that MS is now distancing itself from console gaming by integrating Xbox One with Windows 10 and will eventually leave traditional console gaming. Just read on the internet.

KwietStorm_BLM3148d ago

@crock

Popularity does not equal profitability.

uptownsoul3148d ago

@badboyz09

"Point being Microsoft isn't in it for the money." -- What??? If you truly believe any of these companies aren't in it for the money you are severely misguided

freshslicepizza3148d ago (Edited 3148d ago )

@Griever,
"Some industry experts even say that MS is now distancing itself from console gaming by integrating Xbox One with Windows 10 and will eventually leave traditional console gaming. Just read on the internet."

just read the internet? so it must be true then, give it a rest will you.

2016 looks very bright for the xbox one with a bunch of games coming and all new ip's. is this a sign of microsoft leaving the console industry any time soon? who knows about next generation, we are still in the beginning of this one. sony may end up just having playstation now as a service, valve might team up with nintendo. anything is possible but the focus is on reality and reality is showing there are no signs at all microsoft letting up on xbox one suppport. in fact they are investing more into the xbox division than at any time in the xbox history and you guys are acting like you're upset about it.

they also have new leadership not only at microsoft but also the xbox division. it is a positive atmosphere at microsoft not seen for many years because of steve ballmer. yet you guys want to keep up the negative shenanigans.

deadpoolio3163148d ago

Your joking right they NEVER made a penny on the 360 and it cost them billions releasing a known defective product with a 54% failure rate(and YES they have admitted it was 54%)...Then spent more millions/billions on the Xbox One....

The Xbox division is in no way, shape or form profitable for Microsoft ALL of their money comes from Windows and Office products

jttwister093148d ago

whats funny is that in the same article sony fanboys are complaining about the xbox losing money 3 billion over its first 10 years playstation lost 5 billion over that same ten years lol
http://www.neowin.net/news/...

Griever3148d ago (Edited 3148d ago )

@moldybread

And if it becomes true in a few years? What will you say then? I have seen Xbox fans proven wrong more times than any other fanbase. We are still waiting for Milo and Kate, still waiting for Kinect to revolutionize gaming, still waiting for illumiroom, still waiting for cloud power to make the console 3 times powerful than PS4, still waiting for discovery of secret sauce, still waiting for DX12 games, still waiting for HoloLens and still waiting for all those stage tech demos to become reality.

I never said it is a fact or written in stone. Predictions and analysis are estimated and educated guesses backed by subtle evidences. That is how business world works; predicting and forecasting future turn of events and taking action preemptively. There is no concrete proof for them and things can go either way. However, the signs are there and experts see them. You did not object over the rest of my comment because you couldn't. So you just took that one part and wrote a raging rant over it.

MS is not a gaming company and gaming is not their bread and butter. They have never made any money on it and they have never won a generation. They were even unable to conquer the living room. What is the purpose of them remaining in this industry if they are not achieving anything? Just to keep their fans happy? Be realistic please.

I wonder what you loyal Xbox fans owned before the console even existed 15 years ago because you cant even imagine your life without it. On second thought, most of the Xbox fanbase is too young like their console of choice so they probably did not own a gaming system before it. Playstation and Nintendo are the real gaming brands that existed long before Xbox. Xbox is just a me-too product that entered the industry after Playstation and ruined it with shooters, online patches and DLCs.

Gwiz3148d ago

You obviously missed the RRoD debacle which costed them pretty much as well.What success?lol

freshslicepizza3148d ago

@Griever,
"And if it becomes true in a few years? What will you say then?"

i can't comment on that now and why would i when we both have no idea what exactly that means. all we know is the now and right now there are no signs the xbox one is going away anytime soon. so tell me why do you care about what ifs? it has nothing to do with you purchasing an xbox one today.

"I have seen Xbox fans proven wrong more times than any other fanbase. We are still waiting for Milo and Kate,"

who is we and why are you pushing your goal posts way beyond reach? what is this, some diary of all the things you were excited about that never materialized? they removed kinect, it's what people asked. so why are you harping about something that occurred on the xbox 360?

"still waiting for Kinect to revolutionize gaming,"

keep waiting because it looks like it won't happen on the xbox one. is this what's holding you back from getting an xbox one or just more garbage to complain about?

"still waiting for illumiroom,"

it's called hololens, that's what they have confirmed that is coming. not illumiroom. and we still don't know when that is coming. why not talk about what is now and what the system offers today instead of getting ahead of yourself?

"still waiting for cloud power to make the console 3 times powerful than PS4, still waiting for discovery of secret sauce, still waiting for DX12 games, still waiting for HoloLens and still waiting for all those stage tech demos to become reality."

and then what, you will move the goal post again as to why you don't think much of the xbox one? you're not even here to debate properly, just whine about things that really have no bearing on whether you will buy an xbox one.

"I never said it is a fact or written in stone. Predictions and analysis are estimated and educated guesses backed by subtle evidences."

here's an educated guess, milo is not real nor is it coming. crackdown 3 is. hololens is.

"That is how business world works; predicting and forecasting future turn of events and taking action preemptively. There is no concrete proof for them and things can go either way."

off-topic nonsense and just hyperbole on your part.

"However, the signs are there and experts see them. You did not object over the rest of my comment because you couldn't. So you just took that one part and wrote a raging rant over it."

you are no expert and by my calculations microsoft is worth a lot of money. they can get by without some armchair critic who has 10 years of baggage he brings to the forums.

"MS is not a gaming company and gaming is not their bread and butter."

that's funny. why don't we talk about the games then? forza 6 looks good does it not? halo 5 looks good too. are they not games? ori and the blind forest is not a game?

freshslicepizza3148d ago

con't,

"They have never made any money on it and they have never won a generation. They were even unable to conquer the living room. What is the purpose of them remaining in this industry if they are not achieving anything? Just to keep their fans happy? Be realistic please."

yet you're so far from reality it isn't even funny. you talk about the xbox one not being made by a game company yet neglect it has games to play. too funny. you seem more concerned about microsoft's well being than your own. that's awfully nice of ya. perhaps you should play games instead of playing games here on the forums with your agendas.

"I wonder what you loyal Xbox fans owned before the console even existed 15 years ago because you cant even imagine your life without it.

Ahh here we go, the old let's attack because we are from a weak stance talking about hypotheticals. i don't even own an xbox one. surprise surprise. i have owned the original xbox and the xbox 360. i have also owned all playstation consoles besides the ps4. does that fit your little label you want to cast on me? why are you even here?

"On second thought, most of the Xbox fanbase is too young like their console of choice so they probably did not own a gaming system before it. Playstation and Nintendo are the real gaming brands that existed long before Xbox. Xbox is just a me-too product that entered the industry after Playstation and ruined it with shooters, online patches and DLCs."

feel better now getting that off your chest?

dcbronco3147d ago

It's not a surprise Sony fans refuse to believe Xbox makes money, they have their own agenda. But to deny it and then see gamers get so upset when the rest of society looks at us as children or stupid is unbelievable. The kind of ignorance that goes into choosing a side and then blindly sticking to it no matter what is the same stupidity at its core as what leads to racism, sexism, terrorism and any other destructive ism you can think of.

Xbox is in a division with many other products. That division also has a huge R&D budget. For those that don't know what that is it means research and development. The Devices division, the one that includes Xbox, spend sometimes up to a billion dollars a year in R&D. If you look at their financial statements you will see some of the other things in that division. Zune, iptv, Surface. None of which had much to do with gaming, none of which made any money for Microsoft. Surface being the exception last year maybe. And given what Surface Pro is the R&D on that is huge. Kinect was also a huge R&D cost.

Microsoft has not sold a console at a loss, with the exception of the first few months of the Xbox One price drop, since 2007-08. You would have to understand how parts pricing works to understand why, which I have explained several times but there is that agenda feeding on the gullible. Because of their designs the PS4 and Xbox One launched breaking even or making slight profits. The time when consoles are launched at a loss is long gone. Unless someone launches an uber console.

The fact that any person can come to the conclusion that Xbox loses money based solely on the division losing money makes it clear from the start that they have no clue what they are talking about. That person also thinks because they got $500 on their check and bought one game for $50 it means they have $450 to spend on games even though they also spent $250 on rent and $60 on food. Or that person is still being taken care of and sees money as magic. Or at least mommy and daddy seem to be.

Don't get upset when people look down on gamers if you don't get upset when gamers believe in stupid things because they refuse to try to understand anything but games. Winston Churchill said the greatest argument against democracy was spending five minutes with the average voter. The argument against looking at gamers as mature people is spending five minutes reading the comments on gaming sites. There is no doubt there are extremely smart gamers. But don't worry about anyone spying on you when they can determine everything they need to know by reading your post online. Anonymous or not, it makes a general statement about the whole by the volume of poor comments.

+ Show (20) more repliesLast reply 3147d ago
Bigpappy3148d ago (Edited 3148d ago )

It was well worth it. Just goes to show how much it meant to Bill Gates. I like what they brought to the industry. They have made it about more than just hardware and exclusives. They have came in at a time when they were needed, and defined how we now identify and play with each other on the internet.

They are talking about Billions of dollars, and you come with a like about $100 controller R&D. They will easily make that back and as a gamer, you should be happy that a company is putting that much investment back into making the controller as great as it can be. Xbox's controllers are one of the major benefits of owning the system. It is the most universally praised controller on the market.

scientificreasoning3148d ago

Not for MS it hasn't at all. x1 is not going to change that lol.

3-4-53148d ago

Worth it though to build the brand. You have to spend money to make money.

A lot of that was they invested in a ton of new ip's that were fun to play.

They forgot to follow that up with the 360 though and are starting to get back to that.

The more new ip's that are exclusive to the XB1 or Xbox brand, the more money they can make in the long term.

* Just look at how much money Mario,LoZ&Pokemon games still make Nintendo, and those were created decades ago.

Microsoft will see more returns on their investment if they continue to give the gamers what they want.

But as expensive as it was, losing that much money was worth it in the long run.

These 3 companies are pushing each other forward and keeping each other honest by there being competition and the risk of falling behind the others.

Even Sony is better off for having Microsoft as competition.

Magicite3148d ago

If u consider all loses, xbox is still unprofitable.

+ Show (2) more repliesLast reply 3147d ago
Sonyslave33148d ago

Majority of that lost come from that stupid Nivida deal they had at that time .

ape0073148d ago

original xbox was awesome though

that generation ps2/GC/XboX was legendary

3148d ago
Aloy-Boyfriend3148d ago

Dreamcast was better than all three. Too bad it flopped

3148d ago
343_Guilty_Spark3148d ago

Xbox was basically the Dreamcast 2.

3148d ago
snoopgg3148d ago

I liked the dreamcast, but ps2 destroyed it and had better controllers to boot. That dreamcast controller sucked in my opionion.

Major_Glitch3148d ago

I loved playing Jet Set Radio on my Dreamcast. Having said that, there's a darn good reason the PS 2 dominated that gen.
http://www.dorkly.com/post/...
Hint: It's was, and always is, the games.

+ Show (2) more repliesLast reply 3148d ago
marioJP873148d ago

No "Download DLC to complete the game" BS in that era.

Black0ut3148d ago

That's exactly what I was thinking. Everything was fine tuned and a FINISHED PRODUCT at release. They made sure there was no slacking because the finish date was IT.

I do miss those days even though I was pretty young, I do remember great times on my brothers Original Xbox and PS2. They were great times.

Artemidorus3148d ago

That's in today's money NOT the end towards 2005.

Fro_xoxo3148d ago

Xbox is still around so i'm not fussed..

SpaceRanger3148d ago

If a similar outcome were to happen late this gen and next gen though, then expect the Xbox brand to become majorly focused in software (like the windows Xbox app, major franchises under their publishing) after an exit out of hardware.

Software has always been the core of MS. So that'll never go away.

Black0ut3148d ago

Hmm and would you like it if this happened?

I know literally dozens of people on this site that would wish Xbox to fail and for MS to exit out, yet if this theoretically did happen, the aftermath would be ridiculous and all of those people would eat crow.

Without competition things would only get worse.

Oh and just an FYI, Satya Nadella has mentioned on countless occasions that Xbox is a core part of the Windows ecosystem and it is not going anywhere any time soon. He runs the show, not 1 or 2 noisy shareholders. I'll just leave it at that.

SpaceRanger3148d ago

Never said that? What I said is that if they are to lose just as much money again sometime either during this gen if next... It will more than likely happen.

Way to take my comment out of context. Money speaks more than anything in any industry.

Show all comments (83)
260°

Game Pass seems to have missed its sales target for the third year running

Xbox growth continues to disappoint, and interfere with its exec's pay bonuses, as Microsoft's CEO stops counting Game Pass entirely.

-Foxtrot184d ago

Puts things into perspective when Spiderman 2 managed to sell 2.5 million copies in 24 hours only on the PS5, a single platform.

Gamingsince1981184d ago

Gamepass will never hit the growth they want, its just not a thing the majority of gamers have interest in, it goes to show a console with good games will sell well, that's all you need.

Christopher184d ago

I would honestly be careful saying 'never' when Microsoft just spent $80b more on top of their billions from before to make this happen. They'll spend over $100b more if they can control the gaming market and turn it to all digital and relying on their hardware for others to even compete.

bobtheimpaler184d ago

@Christopher they can't just burn money. Investors have been wanting them to ditch their Xbox division for years for poor performance.

It's the division destroying destroying shareholder value.

neutralgamer1992184d ago

Chris

MS have Better odds of winning the powerball than go buy another big publisher. This boat has sailed and they will buy smaller independent studios but that’s it for them publishers wise

They will literally do the complete opposite of what they were telling the regulators before the acquisition

On topic:

Gamepass isn’t sustainable no matter what the cult of Xbox fanboys will say. It will never reach 100 million and by 2030 MS will be a 3rd party publisher in gaming. They have put their eggs in the wrong basket just like when they backed HD DVD

Ms investors have been wanting them to sell Xbox brand for a while and if spending almost 100 billion won’t resolve anything than this is IT for Xbox. It is kind of funny and sad that the so called savior of Xbox Phil himself would have saved the Xbox brand (according to Xbox fans) and killed it after spending 100 billion

blitz0623184d ago

It sounds like MS set unrealistic expectations which lines up with how out of touch they are with gaming. I wonder what their targets will now be after the Activision acquisition

Godmars290184d ago (Edited 184d ago )

@neutralgamer1992:
"This boat has sailed and they will buy smaller independent studios but that’s it for them publishers wise"

MS doesn't do that. They tend to buy troubled studios with well known IPs, which should be the biggest red flag that their approach is all wrong.

For instance, their involvement with HD-DVD was more about preventing BR from continuing the dominance of physical media, to allow streaming to take over, and yet for such destructive and disruptive effort, they gained little to nothing of direct value or investment.

Well, aside from licensing fees from menu formats for BR. But again that's nothing "direct".

@blitz0623:
"It sounds like MS set unrealistic expectations which lines up with how out of touch they are with gaming."

They seem to be out of touch with reality in general.

MrBaskerville183d ago

I do think there's interest. But 100 million subscribers is a very optimistic target.

+ Show (3) more repliesLast reply 183d ago
Ninver184d ago

Without review manipulation tactics either.

The3faces183d ago

That 2.5 million copies includes early pre orders and console bundles. Out of 45 million PS5 users 2.5 really isn't impressive. As you said just putting things in perspective.

mkis007183d ago (Edited 183d ago )

While games dont sell their whole load on day 1. It would be remarkable for any game to get a 50% or more attach rate. Heck a 30 percent attach rate is crazy. Its potential is high regardless, the spiderman series on playstation alone sold 33 million before the windows release.

Chevalier183d ago (Edited 183d ago )

Which Xbox 1st party in the last 15 years has matched Playstations records sales?! Oh right NONE. if it's so easy than how come Xbox can't even pull it off in the last 15 years or so?

Plus the first game started slower and has sold over 30 million copies. Again NO Xbox game has even come close to those numbers

MrDead184d ago

...so does this mean MS will punish gamers even more now by taking away even more multiplatform publishers to try and make this turd a viable service model? They have proven over the last two and a half generations to be totally creatively bankrupt to bring anything new to gaming and all they do now is take.

Rude-ro184d ago

Microsoft will flood gamepass with the ips from their acquisitions to see if there is growth due to their investment first.
They will also want to see how foolish said players will be with seasons and micro transactions in games inside said subscription service.
This will take a solid year to incorporate and digest the info.

darthv72184d ago

Missed the goal but still showed growth.
Dom: It dont matter if you grow by a point or a percent... growing is growing.

Jin_Sakai184d ago

Except revenue was down from last year.

gold_drake183d ago (Edited 183d ago )

so by your analogy, less loss, is a plus lol

Hofstaderman184d ago

Imagine theres still miniscule growth after call of duty is on gamepass? That would be hilarious.

184d ago Replies(3)
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280°

Former Sony executive joins Xbox to lead Japanese partnership operations

Mena Sato Kato was previously the Vice President of Mobile Business for Sony.

Read Full Story >>
windowscentral.com
darthv72240d ago (Edited 240d ago )

"VP of Mobile Business"... could be beneficial once the ABK deal closes.

blackblades240d ago (Edited 240d ago )

She's not there for mobile shes there to lead JP partnerships its in the title

darthv72240d ago

I get that, but it also doesnt hurt that she has experience in mobile seeing as MS are about to take on a pretty big mobile acquisition.

glennhkboy239d ago

Actually outside of US, mobile game is a much bigger deal. In Japan, a lot of games (anime IPs, especially) are being developed exclusively for mobile. So MS focusing on that sector is a much better strategy than focusing on traditional console games.

blackblades240d ago

5% possible but I 100% doubt it

GhostScholar240d ago ShowReplies(2)
StarkR3ality240d ago

Good Xbox's new approach to Japan has been refreshing, and I'm hoping that this means more JRPG's come to PC through Xbox!

nommers239d ago

It says she was a part a mobile division though so don’t get your hopes up.

glennhkboy239d ago

No.... in Japan & Asia, mobile game is a much bigger deal than PC or even console gaming now. A lot of those small to mid size developers, ones that traditionally developed Japan-centric games, are now developing exclusively for mobile.

TheCaptainKuchiki240d ago

lmao she goes from one flop venture to another

phoenixwing239d ago (Edited 239d ago )

if she was the reason genshin impact came to ps5, that alone netted Sony enough for her to be worthwhile

Edit: While i know most gamers don't care for gacha games from mobile they make huge numbers and i don't mind playing the good ones.

TheCaptainKuchiki239d ago

She only had the VP of mobile role for a year. Trust me, she didn't do anything.

Christopher239d ago

Hope this means more games going to Xbox out of Japan.

phoenixwing239d ago (Edited 239d ago )

that's actually been the main reason i never felt compelled to buy xbox all these gens except for 360

the good part now is even if they do get a bunch of exclusive jrpg's i like i can use game pass to play them on my pc

jznrpg239d ago

Exclusive Japanese games I doubt unless they pay for full development or pretty damn close to it. There just isn’t enough money to be made for Japanese games on Xbox in general especially as an exclusive. Xbox gamers barely buy western games now

glennhkboy239d ago (Edited 239d ago )

@jznrpg A single month of global income from Gamepass subscription can almost fully fund the development of Starfield. So I think there will be no issue if MS pay for a full price for any Japanese mobile game in development now. It only takes the developer to ask MS. I think this is the job for Ms.Kato to contact any interested developer.

blackblades239d ago (Edited 239d ago )

Why her a former mobile leader to lead up a Japanese partnership. What experience can a mobile leader have to help with Japanese games going to Xbox.

glennhkboy239d ago

Xbox, or even PC may not be the focus of MS. The great prize IS the mobile gaming market! In Asia-Pacific & Japan, mobile gaming is much bigger than console & PC.

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200°

Play with Pride: Xbox Game Studios Publishing Announces Ongoing Partnership with GLAAD and More

Here's how Xbox is supporting LGBTQIA+ communities this year - including a partnership between Xbox Game Studios Publishing and GLAAD.

Read Full Story >>
news.xbox.com
shinoff2183329d ago

This will upset a certain crowd.

Hypertension140329d ago

The Xbox YouTube account has nothing but negative comments about this.

Eonjay328d ago

Really sad to be honest. I support any company reaching out to other groups because it equals more money. I don't see anything relevant beyond this fact. I keep saying this but people don't realize that the reason you want to be more inclusive is because you want to invite as many people as possible to spend money with you. It is just good business.

329d ago Replies(3)
329d ago
kfk328d ago

They click downvote to show just how NOT upset they are, haha. Conservative hypocrites want to cancel crusade against Bud Lite and Target, but when PlayStation, Xbox and Nintendo all publicly support LGBT, they make a few triggered comments but continue supporting those companies. Put your money where your mouth is and boycott videogames, or are your 'values' only worth something when it doesn't inconvenience your hobbies?

+ Show (1) more replyLast reply 328d ago
329d ago
329d ago Replies(3)
anast329d ago

This is cool. There is going to be hyper-correction of past idiocies and then things will level out.

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