Is Microsoft profiting from X-box/X-box 360 at all?

[dschumm]

And for the record Microsoft does care. It is a publicly traded compnay who true boss is the owners of the stock. These investors like to see stock go up and to make it go up you need profit.

It is not as if they don' t care, it is that they understood that the way to get their foot in the door was to take losses up front. Hence XBox. Now the 360 is doing well but may break even at best so Microsoft may have to wait for the 3rd generation of XBox for real profit. Things are slower going than they would like but they have the cash to wait it out. There is a limit though until they move on to anoither project. I think the media center bonus of the 360 will keep them in even through another losing generation(Not that I think the next one will lose, I actually think it will be wildly profitable).

Last I heard they were still losing money on every console they sold. The die shrinkage was going to help that but they have added extra features(hdmi port) and dropped the price so any profit on hardware is probably very small at this point and will be for most of the generation. I think any saving they find in production will be used to lower the price and drive sales.

Microsoft also continues to dump huge money into aquiring software developers and bribing 3rd parties for exclusives. Good for Xbox gamers but bad for the bottom line.

As for Halo's impact, assume is does sell 6 million copies in the this fiscal year. Even if the average price is $70 a game and costs are only 60 million as said above that makes profit somewhere near 360 million. Losses were higher than that even in the Halo 2 release year.

So maybe a small profit this year but it will be another decade until the Xbox division will have been a profitable enterprise. 7 billion is a lot to recover.

People accuse Sony of blowing money on a game console to gamble for Blu-Ray. I would argue the Microsoft made a bigger longer term gamble to get their operating system under your TV.