Microsoft's Xbox One Is Looking Like A Lost Cause

[thx1139]

BillyBong said:

thx1139 said:

Problem is that your argument is based on a falsehood. Xbox is not a non profitable product. It has been years since it has shown a loss.  MS now breaks up the hardware and software for the divisions Xbox is in. Both the software and hardware part of the business is profitable.  

Lol.. it doesn't take much to see that the X1 probably isn't profitable right now.  How much money do you think MS are losing currently with the x1 promos just to try and catch up sale wise?  the price cuts, the bundles, etc.. and now the sale through ratio... Just because MS as a whole is making money means jack to Xbox as a product.  how do you make profit if you're spending more than you're making off a product?  The game bundles, free games, giveaways, price cuts, kinect removal, etc.. that don't come cheap.. and it ultimately affects your bottom dollar especially if you have less product out there to help you recoup that money back... hence the urgency to try and sell as many units as they can with this fireslash going on.. is it great for the customer?  you bet.. but at what cost to MS? 

First off all the X1 sold from launch were sold at a profit.  Then the first price cut wasnt a price cut it was the introduction of a new SKU without a key component. So that new SKU will still sold at a profit.  We have seen the quarterly results from MS each qtr and the results have still resulted in a profit.  Now when you bundle in a game you dont pay the publisher the same amount that the publisher will get selling a retail disc.  This is because although every bundle may include the game, the publisher would not have sold that same game to a customer had the console been sold without the game.  You may sell 100 consoles with the game and only pay the publisher the equivalent of 50 customers.  

This generation started off diffrently as well. This generation started with MS making a profit on every console sold. This generation started off with far more opportunities for revenue to be made outside of games.  The vast majority of purchasers this first year also are people that will rent movies, purchase games online (for the same price as physical discs), etc.  So again as results have shown profitability will continue.  Lets not also act like the inclusion of games for the holiday season is anything new for MS. They did it previous generations as well and the X360 for the last like 7 years has been profitable even with holiday bundles.  The biggest issue MS had this generation was starting with hardware that made a profit out the door.  The $100 price difference between the PS4 and the X1 was a big mistake.  The talk of doom and gloom is just so stupid.  It didnt kills Sony and the PS3 when they dropped price $100 per year the 1st 3 years and literally dropped capabilities out of the box.  Kinect may have been removed from the packaging, but it continues to work.  MS will quickly make the money back on these promotions with additional software sales and online revenue.