Because they have tremendous R&D costs to make up for, employees to pay, server farms to power, development costs to eat, vastly lower than anticipated hardware sales which is important because they have a loss leading strategy, software is not selling like they had hoped (this is the big key to loss leading, you need massive software sales to make up for the losses on each console) they've had to make nunerous price cuts repeatedly to try and spur sales which didn't work, but definitely ate into the bottom line, uhm... I know I'm missing quite a bit more. The mere fact that they started hiding Xbox numbers this gen and only this gen should be a big red flag.
Did you know that they thought this gen had the potential to sell over 1 billion consoles? Did you know that they spent over 100 million in R&D for the controller alone? Did you know that they thought they would break even on MineCraft the same year they purchased the rights and studio (sold for 2.5 billion btw)
The point is they are extremely out of touch with their consumers and blinded by greed. They have no business in the gaming space and quite frankly with the amount of money they've invested, they're just bad at it.
I ignored two earlier comments in this thread which were frankly quite ignorant and shallow in thought with opinions taken from headlines elsewhere it seemed and bizarre to say the least
This one I cant ignore as it is even more ignorant of reality and just plain wrong.
First of all "they" didnt say they could sell 1 billion consoles. One guy said it in an interview, it wasnt a corporate mesage and it wasnt an official statement. But anyway, he wasnt referring to Microsoft, he was referring to the tradtional console industry as a whole and beyond. If you arent able to grasp what he meant, and journalists couldnt either, then that isnt his fault. He is just a bigger thinker than you.
Secondly, they arent blinded by greed any more than Sony are or any other company, this statement just comes off as anti MS and it has no place in a serious conversation on business.
Next... the $100m quote for a controller was actually the original xbox one controller. In the context of the overall cost of a new console development... so what?
Next... They didnt say they would break even on Minecraft, they said they would break even on a GAAP basis. I'll try to explain this to you. MSFT sits on tens of billions of dollars in cash. That cash generates an income. If they move some of that cash somewhere else i.e. to buy Minecraft, and it generates the same or more income then they are breaking even at worst. They dont care that the cash is in a different place if it generates more income. People who dont understand accounts and how they work couldnt begin to understand this from the press release. Not their fault for misunderstanding... but that doesnt give free reign to talk bollocks about it.
In short. You whole post is made up on the basis of zero knowledge, heresay, incorrect assumptions, inaccuracies and an agenda.