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WilliamWatts on 07 July 2010
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DirtyP2002 said:
WilliamWatts said:

It makes sense. Which makes me wonder how aggressively they might price the Xbox 360 given the fact that Live is so incredibly profitable for the Xbox 360. Live alone will probably pay back every dollar they lost thus far on the Xbox 360 within the next 5 years.


Just by the pure numbers, the Xbox 360 is in the red about 2 billion USD I think. But as we all know, the EDD carries the Zune, Windows Mobile, Kin, Surface and other not profitable businesses. So the real number might be even lower.

That means that 1 year of XBL would be enough to cover the money spent on the Xbox 360.

I seriously can't wait to see how the EDD will perform in the next 2 years. I really hope that Windows Mobile 7 will be a success as well. With Kinect, Xbox 360 slim, great software lineup, XBL fees and sales and Windows Mobile 7, I think it might do 1 billion USD profit per year. Plus the one billion USD they made in the past 12 months.


I don't think that Microsoft considers the Xbox 360 alone when considering the strategy of the EDD. I suspect they look at it from the perspective of increasing long and short term overall EDD profits and revenue. However this financial year does present an opportunity for them as may finally have a chance to bring Windows Mobile back into the black with Win Mobile 7 which alongside Kinect and Halo: Reach as well as swelling Xbox Live revenue and the Xbox 360 revision does give them an excellent platform for growth of both their short term profits and their long term potential profitability by expanding the reach of their console and Live as a network platform.

They may be much more aggressive with their Xbox 360 platform pricing than they have been in the past few years. Kinect changes the ball game because it pushes the boundary of when the next generation consoles may expect to arrive which means they can justify lower margins on the short term to ensure much larger margins in the longer term since the term of the Xbox 360 on the market has likely been extended by at least a few years. Its hard to say what the precise pricing of the Xbox 360 will be, but I don't think $299 and $399 for Kinect equiped Xbox 360s nor the $149 Kinect price are even remotely accurate.