Sean Malstron insane. I don't know what you call him - fanboy, random blogger, or what.
Did he bother taking a look at Microsoft profits from the Xbox division?
No, appearently not.
No matter how you spin Microsoft spending $500m on Kinect, the proof is in their balance sheets. Their balance sheets say they are making a killing, regardless of what was spent. That tells me two things:
1) Microsoft did the right thing with the $500m ad spend, which has been justified with massive profits in Q4 2010
2) Microsoft didn't spend $500m at once, and is instead allocating it to a slower burn.
Either way, Microsoft did the right thing. They are making more money than ever, in a market facing a horrible brick & motar downturn.
Its not just about the hardware sales. Its about the Kinect sales. You know, the overpriced piece of hardware they spent the supposed $500m on. Microsoft outsold demand by very favorable margins. They sold nearly 8 million devices in its first two months on market. That is very, very impressive. Apple didn't do that with the iPhone or iPad. Nintendo didn't do it with the Wii. Thats not to say its better than either, but as far as we can tell, they certainly are selling the device at a significant profit. At a $50 profit per device, which is likely low, Microsoft made $400 million USD in two months on the thing. I'd say thats very, VERY effective marketing of an arguably overpriced device.
Only a fool like Malstrom could look at one metric and say "Ha! Microsoft is failing!"