Yup even if the xbox one sells the same in the end as the xbox 360 maybe even less it will still most likely make more money. There is no RROD which was what a Billion dollar write off ? The console wasn't sold at a loss from the start of the generation and they have a bunch more first party titles that sell millions of copies.
This is true. But Microsoft had a far grander plan for Xbox One when they designed it. The whole plan, how it was 'sold' to internal management before it was greenlit, was based on a bunch of factors that didn't pan out.
Revenue streams that didn't pan out. If they were willing to invest $400m in their five year NFL deal, the anticipated return must have been considerably larger. But this seems to have fallen by the wayside. On side of revenue/profit Microsoft never planned to sell an Xbox One without Kinect. Probably because the perceived value of Kinect is $100-125 whereas the BOM was estimated at around $75 at launch - with a few people in this forum believed that was high, making the profitability of the Kinect 2 hardware sale (even as part of the console package) massively high. It was $25-50 clear profit, possibly more.
A single console sale doesn't usually equate to profit (on a per customer basis) until the customer has bought x number of full prices games (or equivalent spending on PSN/Live, movie rentals etc). The attach rate of games and services. Microsoft's great deal of selling Xbox One cheap with several cool games has likely deferred the real profit turnaround on many of those particular sales to some point far in the future. Not all but those were great games and not everybody buys lots of games - I reckon I average 20 full priced games per year.
Businesses don't look things like you and I do. They look at the original plan, the revenue predictions and the reality. We have no idea how much pressure Phil Spencer is under. We have no idea how he managed to fund his two-month US sale of the decade. Has he just blown a significant amount of his budget for some good PR?
The goal isn't about maximum console sell-through, it's about the bottom line. Revenue and profit. Part of that equation is growing the customer base but it's not everything. Look at Apple, who have about 25% of the global smartphone market share but have over 70% of the profits because their customer spend, spend, spend.
When Sony say they are happy with PlayStation 4 it's easy to believe because they're delivering on their vision (apart from the fucking sleep mode - still MIA!) and selling more than they expected to.
