US Army wanted Xbox 360, MS Refused

[stof]

gurglesletch said:

stof said:
If the console itself was being sold at a loss at the time then it makes a lot of sense, since they were almost certain to not recoup costs through game sales.

If the console was being sold at a profit, then it's not very smart business.

So the PS3 was sold at a profit then to the air force?

I didn't say anything about Sony. I'm just saying that if your business model is to sell your console for a loss, in the knowledge that you'll A) recoup costs in software sales and B) push a larger userbase and an increase in software support to keep console sales high when you can sell them at a profit, then selling a bunch of consoles at a loss that you know will never recieve more than one or two units of software might not be the best move.

 

Especially since the article mentions timing. They said it was early when the costs were high and they were worried about shortages. So this is probably during the first year or so, when Microsoft's strategy was to get the most out of their headstart on the Playstation. The army deal might have made them some money, but in the long term those would be consoles that gamers couldn't buy, couldn't buy games for, and couldn't choose to buy before there was a second console out with a much higher brand recognition.

It really does seem to make sense from a business perspective (though having made the army sale would have been an ok business decision too)