Except it will next year.

You dont know the underlying facts. Xbox1 was never profitable because it cost too much to make because MS didn't own the IP, Intel and Nvidia did. With Xbox 360, MS does own the IP. That's going to have huge ramifications for costs in time. 360 hardware will not be a money sink like Xbox1 was.

All that is different with 360, and there's virtually no way they wont start making a profit soon. Hell, the amount of stuff they sell, games, downloads, accessories, it's hard for me to imagine they aren't profitable now. People buy Xbox like crazy. How much you think those $10 Gears maps packs just sold? A shitload. How many wireless controllers sell? A crapload. I saw they sold 800,000 of those wireless controllers last December I think when NPD released the accessory figures that month.

I dont think the 360 is doing as well as most seem. Its actual install base is probly around the 6-7 million mark due to bricked systems and returns. granted 6-7 million isnt too bad, its pretty low when compared to the Wii, and even the PS3 at this point. I think taking these number for the 360 today and wait for the Wii and the PS3 to catch up in terms of time on market, we will see that its not selling that well even with a lower price. So M$ may not start making money on the consoles soon. They need to cut there manufacturing costs a lot.

Do you HONESTLY think that 2-3 MILLION 360s bricked? No. Friggin. Way. Maybe 400-500k which can be disputed if it's counted in sales or not. Either way, MS shipped 500k systems last quarter, and I'd assume anywhere from 500k to 1.5m (absolute max) are in the supply chain. Remember, if MS shipped 10.9m, thats new units, not refurbs or anything like that as far as I know. The 360 will easily make money once the 65nm chip is introduced. Expect huge profits in Oct-Dec with Halo 3 and GTAIV selling 3m copies each, and very good hardware sales that will actually be profitable. One quick note: Maybe the reason MS lost a bit of cash was because they DIDNT make systems? I mean, they are profitable now (we assume), so if they don't sell the units, they fail to make a profit on them. Also, I assume that Crackdown sold only mediocre, and they coulda lost a bit on marketing that game. Theres absolutely no way to figure out exactly where MS needs to go to get them in the black. However, it's a lie that MS ever said they'd be profitable in 2006. MS's goal has been to get in the black, and stay there in 2008. A feat which is certainly do-able with H3 on the way. Remember, H2 made MS gain $56m in a year where the Xboxes were probably still losing them cash per unit sold. When H3 ships and sells tons of units, we can expect profits to be made, not lost, globally. Add in Lost Odyssey in Japan selling quite a few units, and we have a winner globally in Holiday 2007. Not that the 360 will magically become the best w/w selling system, but it will atleast get in the black - a position MS needs to be in.

The thread title is misleading. Bach is referring to the entire ENTERTAINMENT DIVISION, not just the 360. People keep thinking it's the 360, because they forget what else that division controls, such as the Zune, which did lost the division a lot of money. The 360 is actually about breaking even, since its manufacturing costs went down.

I don't know the facts, good one  (I'd use a laughing smiley if they had one but they don't).  People buy the Xbox like crazy?  I think before you start throwing accusations of "not knowing facts" around you should research that core fact.  At any rate, we have little idea of what MS' profits are on anything individually.  What we do know, to a greater if still imperfect extent, is what the 360's total losses are.  MS has yet to show any improvement in their basic business model.  Maybe they will next year, it is possible that micro-transacting the hell out of gamers wallets will make them profitable, but it's also possible that something happens that depresses profits (like continuing poor sales despite the big guns, or a Sony price cut, or greater than planned warranty costs on their shoddy product, etc.).  However, until we can see the profits in quarterly earnings reports, MS execs bragging yet again about the eventual profitabilty of the 360 means nothing.

The entertainment division is around 70% 360.  Most of the rest is the reasonably profitable windows games group.  There is very little chance that the 360 is making money with the total division losing as much as it is.

Reading the eWeek article, I'm confused as to where he said they're still losing money on the console. The original Xbox was ridiculously aggressive. This time they had the luxury of sitting back and not really worrying too much. With Sony off to a slow start, they still don't have much to worry about just yet. I'd be surprised if they could keep the business profitable, but it will probably get to the point like Sony where it's profitable more years than not.

1. If their hardware 'profit' is eaten up by the distribution and marketing costs then it doesn't really count as profit does it? Not in the eyes of shareholders that's for sure.
2. 9.6M is not that large of a user base.
3. Huge profits on game sales? They will make money on Halo 3 but one swallow does not make a summer - see Nintendo for 'huge profits on game sales'.
4. A windfall? That's some level of optimism. They still have to keep the PS3 at bay so don't hold your breath for MS making any significant profit on harware for a long time to come.

 1. Where did you get that number?

 2. If it's true, is that income, manpower focus, or money focus? Those are different, and would mean that the 360 may not be bringing in more money than other things are losing. And in this case, I mean a difference from the 360 system itself, and the marketing of it, which is a money drain. They need some help outside North America. 

They should not have made the Zune is all I'm gonna say....