Microsoft Posts Huge Xbox Losses

~$250M per quarter in 1H2002 (when costs are nearly at their highest in the console's life, selling the consoles for $199 when production costs were essentially unchanged from launch) is actually less than I was expecting...

and it's certainly not "huge" to a company like MS, which posts ~$2700M in net income per quarter, including these losses...

Edit: Or maybe the price was still $299 for these numbers? It's 3:30am here and I'm not sure what I'm talking about. :LOL:
 
Glonk:

> is actually less than I was expecting...

The you must have expected them to sell a lot more Xbox'es than they did.

> and it's certainly not "huge" to a company like MS

You have to look at it isolated from M$' profitable businesses. Noone's arguing that M$ can't afford to keep Xbox alive.
 
It doesn't matter if it's in a seperate division, to MS the Xbox exists to counter a threat by Sony to invade the living room (but still hopefully turn a profit eventually) and it's still part of the same company.

"Huge" is relative to the company supporting it, regardless of divisions and where profit comes from.

And was expecting a larger loss because of marketing and aggressive hardware costs, I thought they'd be losing more money on this than they did.

Does anyone have how many consoles they sold worldwide in the 1H of fiscal 2002 by chance?
 
Crusher said:
Half a billion dollars isn't pocket change to anyone.
Click to expand...
When that half a billion dollar loss occurs at the same time as over 5 billion dollars in pure profit (including that loss), it's relegated to the trivial pocket change category in my books...

Especially for a company with a market cap of $254B and $42B in the bank in cash... ;)
 
When that half a billion dollar loss occurs at the same time as over 5 billion dollars in pure profit (including that loss), it's relegated to the trivial pocket change category in my books...
Click to expand...
If you just earned a million dollars, whould you throw away 100K in the garbage, because heck, it's a pocket change! ;)
 
marconelly! said:
When that half a billion dollar loss occurs at the same time as over 5 billion dollars in pure profit (including that loss), it's relegated to the trivial pocket change category in my books...
Click to expand...
If you had a million dollars, whould you throw away 100K in the garbage, because heck, it's a pocket change! ;)
Click to expand...
No, but if I was using it to fend off a possible attack from a competitor, I wouldn't be worried about it.

And that example is unfair. It'd be more like: If you had $42B and still made $10B a year, would you care if you lost $1B to a mugger if it meant you'd be okay? ;)
 
Call me stupid, but I didn't view Sony as a competitor to Microsoft until MS decided to do the X-Box. Seems to me like they're only getting mugged because they chose to go down the dark alley in the bad neighborhood instead of sticking to the sidewalk.
 
How am I short sighted? All I said was that half a billion dollars wasn't pocket change, which it isn't, and there's no relative way of looking at it that makes it seem otherwise. People are treating it as if it were half a million instead.

I don't care what the justifications for losing it are, it's a significant ammount of money, and it's money they wouldn't have lost if they hadn't chosen to do the X-Box. Over the long run it might pay off and make them more money a few years in the future, but I don't see how that has anything to do with the fact that half a billion dollars is still half a billion dollars, and it's not pocket change to any company on earth.
 
zidane1strife said:
It's a lot of money, but to MS, better lose 1/2 a billion now than lose an entire market later.
Click to expand...

I think both will take place...
Click to expand...

Is that the way to look at it? "We can't win so let's not fight at all?" MS is doing everything they can so they have a 'chance' to win. And they aren't doing too bad at it either.
 
Pea-nuts. 8) Sowing the seeds for greater things to come. 8)
Kind of scary how much money MS can throw at a product. It is hard not to be successful with such backing! :oops: :oops: :oops:
 
chap said:
Pea-nuts. 8) Sowing the seeds for greater things to come. 8)
Kind of scary how much money MS can throw at a product. It is hard not to be successful with such backing! :oops: :oops: :oops:
Click to expand...

being successful would imply earning money and not throwing it.
 
Sowing the seeds for greater things to come. 8)
Sowing the seeds for greater things to come. 8)
Sowing the seeds for greater things to come. 8)
Sowing the seeds for greater things to come. 8)
 
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