You're talking about a company that has been sued for billions of dollars over the last 20 years and has just shrugged and kept on going.

I think both the company and the brand are fine.

And others are overestimating the cost of 360 production.  When the 360 launched the Arcade (then called the core) launched at $299 and the Premium at $399.  Call them the HDDless and HDD SKUs. Little has changed with components that would add costs to the console. HDD drives in the consoles have remained just about constant cost wise while capacity has increased.  So heading into the 360s 5th holiday the costs of production certainly has dropped. iSuppli estimated the HDD SKU cost $470 when MS launched and $323 1 year later. So here we are 4 years later certainly both the HDD and the HDDless are profitable.

All evidence leads to the fact that the losses in the Entertainment Division at MS have nothing to do with losses on 360 console sales.

I googled him (Eric) and he seems to have been doing this tech writing stuff for a while.

I am not here to say what he is saying is the gospel but...

I love to go through many of your previous posts and it is amazing (but not suprising) that fanboys (you know you are) are quick to believe when anything negative is said about the competition but also quick to discredit any negative statements about their beloved console\company.

They are many other analysts including those in the WSJ that stated MS has been losing money on each console before and after the first price cut and was only making a tiny profit just before that same price cut, about the time MS stated they weren't recurring any loses on the x360.

Google and crucify them all.

NB: Some of you might have better credentials (which I doubt) than the author but if you do and can find time to post on this forum....LOl

@thx1139:
I'm still not persuaded about the Arcade, but I agree with you on the rest. The big burden on MS Entertainment and Devices Division is by no means XBox, that is doing a lot better than MS first efforts (and it's now profiting, we can disagree on the single parts, but not on the whole brand, it's profiting more than decently now), while MS still struggles trying to expand in the mobile devices world, losing tons of money on Win Mobile/CE and seeing its market share shrink to Symbian, Linux, iPhone, Blackberry and now Android too benefit despite increased investments. About Zune, the first was a horrible flop, but the new one still could eventually profit, provided that Ballmer keeps real and forgets his paranoid dreams about dethronizing iPod. iPod is the king, but it didn't kill the competition, MS too can profit if it accepts not being the leader.

Obviously he's wrong, and we're right. We know more from our experiences playing videogames and eating cheese doodles

oh look, he was permabanned, what a surprise.

I remember there was an article that the Arcade was the one loosing money while the SKUs with the hard drives was making money since the HD Microsoft puts together was cheap off the shelf parts.

The analyst is probably correct. If MS loses a little bit, even 5% on each console sold, it won't matter b/c they will make up for it with software and XBL fees.

Also, I'm sure that the PS3 sliim's success has lowered MS's revenue and profit expectations. MS is going to want to be upfront about this to investors if anything, b/c they dont want to give investors bad surprises once the earnings reports come out.

So, while the console may be selling at a loss, it is probably immaterial as MS is still making $$$ even while seeing stronger competition from Sony.

not really konwiki, the articles on the net are cherry picking, b/c MS will be selling less software in the long run b/c less hardware is being sold. MS is already having to deal with developers giving Sony more attention, and this will get more prevalent as time goes on given the slim's better sales.

Incidentally, it's an old formula to lose a little bit of $$ on the main product and to make it on the add-ons.  Gas stations do this by making very little on gas but having a much bigger margin on the food inside the store, razors and razor blades do this as well and the idea can work just fine. 

Yet in the PS3 thread about loss on hw sales.. you said "that's without marketing, shipping etc..." making it sound like it was bulletproof estimates. I agree that the PS3 one does deliver more back up to their claim, but funny how on one side its way off, and on the other its not including shipping and marketing bla bla...