Microsoft lost a lot of money on the XBox. About 4 billion by some estimates. That’s a lot of money. Even for Microsoft.
So did they learn their lesson this time around? Apparently not. According to an independent study done by businessweek.com on the XBox 360, each unit sold is losing Microsoft $126.
They plan on selling 2 million units this year. That’s over a 200 million dollar loss. Chump change I guess.
But come on, first and foremost, Microsoft is a business. A very profitable business. So what’s their financial plan behind the black hole of cash?
A Microsoft spokeswoman said that the company’s plan calls for a “gross margin neutral” strategy through 2006, meaning that between the sales of consoles, game software, and accessories, it expects to essentially break even. Profits should follow in 2007.
Last round of consoles the only company that made money was Nintendo. The guy in third place. We’ll just have to see who’s profitable this round.