| Shane said: Microsoft just has not been aggressive enough, but they have built a solid foundation that should serve them well at some point. I disagree Microsoft absolutely needs Japan, even if they could certainly use it. I also disagree they should just make toys. Selling hardware at a loss has worked just fine for previous console losers, and with big enough penetration, it will continue to do so. The only companies it hasn't worked out for are those who moved less than 10 million units. The number's higher now, but none of the three should have a problem achieving profitability. |
The XBox lost $4 Billion after selling 25 Million systems so I would say that worked out pretty awful for them ...
The fact is that the loss leader strategy has never been pushed to the level that Microsoft and Sony have. In most cases it has been assumed that the console lost very little on actual manufacturing costs and most of the up-front losses were associated to research and development costs. It was rumored that the PS2 was taking a record loss of $75 to $100 per system and then the XBox was rumored to lose $150 at launch; these numbers were assumed to have similar accuracy to the $300+ losses that are rumored for the PS3.
