Is Microsoft losing money???

Alright, now I know Microsoft is really rich and so is Bill Gates but would a money hungry company like MS make a system that they’re losing money on??? Like really, I've been surfing around these threads and I've come across lots of people that say Microsoft is losing 100 to 150 dollars American on every Xbox console they sell. I find this very hard to believe. Is it just me or does this not seem right, An intelligent company like Microsoft comes into the console war to lose money??? Or do they gain this back from selling games, DVD Kits and/or controllers??? I mean if this is true Sony has truly won this war.......They are selling their console as the same price as Microsoft’s and the Xbox probably takes a lot more money to make then the PoS2!!! I also came across some news yesterday that later in the year Microsoft and Sony are going to drop their console prices and compete on whose system is more affordable!!!! This would kill Microsoft even more!!! I’ve also heard that Bill Gates is running into some trouble with his money.......This COULD (I’m not positive on this one, I’m actually probably wrong!!!) be linked to the Xbox, and the way I see it, Xbox won’t have a long and healthy life if MS is losing money like this due to the Xbox.........But don’t I deserve a console that will have a long and healthy life!?!?!?!? After all I did pay $459 Canadian to get it!!!!

Well I hope I’m wrong and that this post was just a waste of everyone’s time. I hope Microsoft isn’t losing money and that the Xbox will have a strong and healthy life. When will everyone realize that the Xbox is truly the best system??? Anyways even if they don’t THINK Xbox is the best....We know it is, Because we belong to an Elite Group of gamers.........The Xboxers!!!!!!!!


Peace

Anyone know about this?!?!?!?!?

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Originally posted by Calve
Anyone know about this?!?!?!?!?

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Nice avatar you got there Calve! You stole it from fear_this! :rolleyes:

Maybe instead of stealing other peoples sig pics, you could create your own, or find one off of the internet...;)

Yes, Microsoft is losing over 100 dollars on every xbox. The idea is to sell xbox at an affordable price to maximize the user base. In time, profits from software sales will make up for the loss on the console. Eventually, the cost of producing an xbox will drop significantly and Microsoft can cut the price of a console and still make a profit. Microsoft is not actually expecting to make money from the xbox for about 5 years.

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Originally posted by Calve
Anyone know about this?!?!?!?!?

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I'm not sure about this situation Calve as most consoles lose money when they have been bought out, they get there money back from the games they sell with the machine, I'm also sure that MS must have know that they were going up against Sony and new it wasn't going to be easy ride as Sony still have a hold over the console market,

I see the XBOX is doing well in the US with a console as powerful as the XBOX, who would want sit down and play with a frightened console? In Japan PS2 and the Game Cube are at home I hope the guys in the US are doing the same with the XBOX making it feel comfortable in the US

The only problem over here in the UK is that the price is pretty high and now I here that the PS2 has gone down again in 4 months to £150 so in looking in that Sony is worrying over the XBOX to put the price down to £150 (it was £200)

It's gonna take some time to put a dent into the 25million PS2 out there but I'm sure it wont take that long it is still the underdog in the console market which has a bright future coming from the womb of MS

calve...
its tru...
m$ does lose money for every xbox sold...approx 100
but so does almost every system...cept for nintendo...
maybe the value is less...like 20 or something...
but thats why at launch most xboxs were sold as bundles...to make money ...
the system is not what makes the money...its what draws people in...the games are wat make the money

peace

Microsoft is indeed losing money on every console.

They don't care about making money with the XBOX. Their goal is to crush the competition, nothing else. Then, when the XBOX2 comes about, they will make bank.

Ok, they release Xbox now, lose a little money on console sales for a few years. Soon, as technology increases and the Xbox technology becomes significantly cheaper, they'll be able to pull in tons of money from console sales. But the most important things to remember are, Xbox 2, AND the very large amount of money they'll make on games, every Xbox ownser buys quite a few games for their Xbox so Micro$oft plans to make some money this way too.

All systems cost more than they sell. The GameCube costs Nintendo $350 to make. So they lose $150, and toy stores dont make much money off the systems they sell either. If im not mistaken the toy stores (or whatever) make only like $10 per system sold. The bulk of the money they get is from games and accessories.

Microsoft at launch was losing what experts in the industry estimated a $120-$150 per Xbox. (MS never gave the exact amount) This was at launch. Now it is believed that they are losing around $30-$50 per Xbox. The price of the parts aren't going up, they decrease daily.

So in reality they aren't losing much in the grand scheme of things.