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HappySqurriel on 07 February 2012
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Squilliam said:
HappySqurriel said:
While I could see Microsoft switching from a business model of losing a lot of money on every system sold to a system where they sell their systems to users at a break even point or small profit and take a massive loss to get them bundled with TVs, I couldn't see Microsoft producing a TV (or a service that ran on a TV).

They don't seem to be losing money on their systems and they are more than adding to it with their various online services.


I was referring to systems at or near launch ...

While we can argue over the exact numbers, it was rumoured that Microsoft was losing over $100 for every XBox 360 sold to keep the price at $400. If Microsoft changed their strategy to launching a system that they could break even selling for $300 or $400, and then took the money they would be losing selling more exppensive hardware and directed it towards getting systems into homes in other ways they could "sell" more systems with the same losses on hardware.

The general approach would be to sell them the "XBox 720" to them for half price if they essentially gave it away for free in a bundle. Best Buy (for example) could offer 50 inch HDTV bundles with the "XBox 720" for a competitive rate and (possibly) move millions of units for Microsoft; or cable companies could convince people to switch to a cable, internet and TV bundle to get a free "XBox 720".

Personally, I think it is a very solid strategy because of how disruptive it would be in the market. Ideally, I think it would be best for Nintendo with the Wii U being that they could use it to get an unprecidented lead in the market in their first year (imagine a system that was in 25 Million homes before their competition launched), but it would also work for any of the console manufacturers.