NEWS - Tuesday, March 2, 2004
Xbox Not To Make Profit Until 2007
JOHN CONNORS: We do expect home and entertainment to improve a bit in the next years, and there’s really three different businesses in home and entertainment. There’s the TV business, there’s the Xbox and its related games, and then our PC software for consumers and hardware. The PC software and hardware business makes the money. TV does not. Xbox does not. The real issue in that business is Xbox, and what happens at end of cycle, you do get improvement in cost of goods sold, but the real factor will be what is pricing of the console at that retail. If there was aggressive discounting by both us and Sony, the improvement would be relatively modest in that total business, and that’s kind of the way I would look at it. We would expect to see a bit turn in the ’06 timeframe, within ’07 showing the largest impact of moving from a significant negative position to not a significant negative position or positive. And given the scale of the negative position today, that move is a big delve in the company’s total profitability.Source: http://www.microsoft.com/
