Microsoft Declare XBox Losses

Just as things seemed to be going XBox's way, new figures released by Microsoft reveal the real cost of chasing Sony's PS2.

A filing with the U.S. Securities and Exchange Commission made by Microsoft at the end of last week has revealed precisely the extent of that cost. The filing detailed sales and profitability by division. Home and Entertainment division, dominated by XBox, made a quarterly loss of USD 348 million on a sales total of USD 1.28 billion. That drop for the same quarter last year was only USD 180 million.

Those figures, roughly, means that in their effort to become Number 2 in the console war, Microsoft have lost almost twice as much money as they did last year. These new figures suggest that Microsoft are currently losing USD 100 for every XBox sold.

The bulk of the losses is almost certainly due to the price cuts and bundle deals which Microsoft recently introduced.
Considering the above mentioned numbers it is easy to assume that the increased losses mean that more units have been sold. Recent news however, released by Focus Enhancements, the producers of XBox's video encoder chips, claim that Microsoft have warned of reduced demand for their console for the first half of 2003. Such a warning of course, could be a result of the successful holiday season and the sales lull which usually follows such periods.

In any case Microsoft have managed to creep and crawl their way into the console market, establishing a basic user base which will, eventually, begin purchasing services and content for the console, the profitable side of the product.

The recent holiday season will mean that Microsoft will remain comitted to their console and will keep up the pressure on PS2. Losses or not Microsoft can definitely back their product, in fact the filing shows that their only other loss making division is the MSN Internet access division, which lost USD157 million during the same quarter. But with Windows alone making a profit of USD 1.97 billion and Office USD 1.88 billion, there is no fear that the MS money well will run dry.

You can find the full Microsoft filing by following the download tab.

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Microsoft Declare XBox Losses

the x-box is really an awsome system, I hope it does well in the future, if nothing, aren't the games themselves helping the profit margin of M.S. out? What about x-box live? M.S. will do fine, they just need to invest more wisely in their product in a highly competitive market, they are too used to being a monopoly where they can put out shitty products without gramifications.

Microsoft Declare XBox Losses

This is what M$ should have done in long time.1. SECURITY2. MAKE BETTER PRODUCT3. STOP GROWING4. STOP HOGGING THE MARKET5. STOP STEALING IDEAS6. STOP COPYING IDEAS7. STOP BUYING OTHER COMPANY8. DITCH XBOX9. DITCH WINDOWS10. ASSASINATE BILL GATE

Microsoft Declare XBox Losses

MS said that they won't be surprised if this Xbox doesn't churn any profits its whole lifespan. I think that means its purpose is to take down the PS2 and establish MS as the king of games, leaving the Xbox's successor to reap all the profits.

Microsoft Declare XBox Losses

anyway, xbox is crap...you want fun kept your pc update :Pxbox news game = pc old games !! I like the idea !xbox think hard !xbox can be good if they start creating new games original that no one have already make in the past or making.... or have never be done.. that can make some interesse in the xbox..

Microsoft Declare XBox Losses

For those who own PS2 are a traitor to Nintendo. Boycott Sony as well. M$ & Sony don't know how to make video games. They borrow the idea from the original videogame maker Nintendo & Sega. Boycott both Xbox & PS2. They are both thives.

Microsoft Declare XBox Losses

Xbox is by miles the best console ever to grace our planet. It absolutely wanks all over ps2 and especially gamecube. Unfortunately i did once own a PS2, but after changing to xbox i realised just how crap they are. Under powered and overpriced.Much like the MAzda MX-5 . The Xbox is a power hungry beast with top banana games and unlimited potential. Ive heard devolopers saying that the PS2 is infact being pushed 100% with most of its games and xbox uses just 17% power on Halo 16 player!!! Xbox 4eva

Microsoft Declare XBox Losses

Ugh,I've never seen such a bunch of trolling, flaming, raving, lunatics. I've said it before and I'll say it again folks, if you don't like the product '!DON'T BUY IT!'.Otherwise? Why don't you sit down, silence those 3 year old attuides and live with it.Don't like MS? Go forth, buy a PS2 or GC. While you're at it, uninstall Windows and use Linux. it's not THAT hard... if you really hate MS and don't do this, you're just lazy.The point of fact is MS has the $$ to spend to make the Xbox a success, good for them. I like my console and I'm glad to see it succeeding in the market.So please, all you flaming trolls, go back to your PS2's and GC's and leave us alone. If you don't like MS why are you spending all your time flaming about it? Just sit quietly in the corner and I dunnon play Final Fantasy or something.-T

Microsoft Declare XBox Losses

Well said Tagge, I own an xbox and have xbox live too, And to cap it all i sold my PS2 to buy an xbox and have never looked back since, It is the most powerful console, It is number 2 in the console market and the line up of games for 2003 looks excellent. I have nothing against the other consoles, I personally think that the game cube is aimed at younger players and the PS2, seems a bit dated. I think a lot of people that own the other consoles havent really looked at what the xbox can do, I was a bit unsure of what to expect before i bought an xbox, but it has surpassed my expectations, and xbox live is better than any online system i have used before.

Microsoft Declare XBox Losses

You are missing my point. Would you support Sega or M$? Xbox is basically Sega except with M$ on the logo. So basically the hardware is develope by Sega & M$ copy it. Would you buy a product that copy from another company? I wouldn't. It is basically stealing someone's work & put it together by a crook.

Microsoft Declare XBox Losses

And this all was bull shit! It was a f**king joke. And when i think of microsoft i hope you f**king choke!Sorry but had to borrow that reference from the sacarin movie wedding singer. It does fit though with how i feel about microshit right now. Have a nice day.

Microsoft Declare XBox Losses

SEGA?? The hardware is SEGA's? You must be kidding. The hardware is Intel's, who made the first X86 based platform. The Xbox is a PC underneath and has not derived a single piece of it from SEGA. Get your facts straight.Also, why do you whine about Microsoft? I bet my life on the fact that you are using Windows. Sheesh...

Microsoft Declare XBox Losses

Maybe soon Bill G will understand us Nintendo and Sony fans dont want xbox or M$ in our homes,i was alot happier when it was just Nintendo and Sony so i could afford both consoles and games and not have crappy other system always being advertised and having to hear little homos bragging about thier consoles power..

Microsoft Declare XBox Losses

Some of you people are morons. Your saying PS2 and Xbox stole the idea of video games? What about Nintendo? Nintendo "originated" from Atari. So you are saying that we should drop all the consoles and f**k microsoft and sony and play Pong on friday afternoons.....well ill be playing with something alright...your mom

Microsoft Declare XBox Losses

History of Sony....ElectronicsHistory of M$.....Software makingHistory of Sega....Arcade & game developingHistory of Nintendo....card game & video game developing.Nintendo & Sega both have history in game development. Both set standard for the video game console the way it is. Unlike Sony & M$, they aren't sufficent in creating their own game. When is the last time you saw PS trademark character? Same goes with Xbox. Halo as Xbox trademark character? Give me a break.....Halo is developed by company which M$ bought over. Why don't M$ add in their favorite paperclip to Xbox as their trademark character?

Microsoft Declare XBox Losses

I'll keep my eyes peeled for 2005, when round 2 of this console war continues. And nintendo lose out completely and go into the pacemaker industry where they turn over a faulty batch, get their asses sued, and only just survive cuz of jap sentiment as they start buying their grandparents nintendo produced pacemakers, even if they dont have a heart prob. The same goes for Sony, but much much later.

Microsoft Declare XBox Losses

If Sony is the only console in the market....then Sony will jack up the price to their console. Expect the price to be within $500-$1000. If M$ decided to ditch Xbox, there will be no one who will compete again Sony. Nintendo don't have the chance against Sony. I hate it when Japanese electronics maker are starting to act like M$ for Global domination.

Microsoft Declare XBox Losses

i think MS knows what they're doing. they are prepared to make losses when they introduced the bundles, its not like the bundles are a bunch of pirate merchandise they couldn't do anything about.Xbox will loose money for MS, but the number of increasing sales for Xbox will establish future MS consoles.

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