After the end of the XBox 360 in 3 to 4 years time: Microsoft should solely focus on the PC gaming market and make that more appealing to the wider community. The cost of introducing a new console is an expensive business venture. Why not just focus on bringing games to PC? BTW games on PC have the advantage over consoles due to the free online, huge library of games and the best control- around with the good old mouse and keyboard.

also ms doesn't even seem to care about profit they just like giving cash to help people work and donate in their spare time to good causes.  Bill Gates and crew are some of the greatest philantropists ive ever heard of.  I heard they bought a million dollars worth of comps for my old school district and donate to help out in africa.  Funy even Halo 3 talks about africa.  My kenyan friend told me about the sea wall of fort jesus in mombasa.  Seems Jesus is hiden in messages all over the xbox.

Hm... With Bioware now at EA, and Bizzare Creations (PGR series) and Bungie (Halo series) no longer only developing for MS exclusively, MS is in serious problems to beat Sony this console generation.

Believe me, I don't think Sony winning and monopolizing the industry is a good thing either, but if MS fails twice, not many consumers will buy in a third time.

Prodigy, Rock on and cwbys. Go to the last page and read my post on "sunk costs" to understand why your argument's about the 360's past loses doesn't make sense.

Microsoft is already researching their next consoles, we heard reports they were looking into future console's chipsets over a year ago. These costs are included in their quarterly results, which have indicated profits on the last two occasions.

Lets break it down to you StarCraft. During the period between 2000 to 2008 Games division gross profits are as follows: Nintendo leads the way with a gross profit margin of nine billion dollars. Sony has a reasonable gross profit margin of just over 2 billion dollars. Microsoft has made a gross loss of 5 billion dollars - ouch!!! MS has only made a profit of one billion dollars in the past year, the loss was at a peak of 6 billion dollars. Still a long way to break-even.

From what i see on live more and more dads and sons are playing even a few daughters these people will continue to stick with ms' box because it has the best and bigest library.  They just need to get more sega games.  Oh and any one who thinks bungie would start helping sony is dreaming they would go back to the mac before ever helping evil sony out.

I know what Sunk Costs mean, but people pull out of businesses all the time. Sega's Dreamcast had a "sunk cost", and they decided to stop producing their console because they would never make money.

I don't really think you understand the impact of Sony winning out with blu-ray. This is going to be the format for the next 5 to 7 years, and if MS makes a new console, it wil HAVE to contain a blu-ray drive. Because that tech will be the only one which is cheap to produce (by then). But that puts them in a tight spot, because Sony will get money for every Xbox 720 they sell, and every game they sell.

Shareholders know this, and are NOT happy with the way things are going. Why the hell do you think MS gave Paramount 100 million USD to stick with HD-DVD?

Their only hope now is for Digital Distribution to catch on very fast, but frankly, most parts of the world are just starting to have high speed internet. And their 720p hd-ready movies, which you can play two times, and are then deleted, are no match against a BD-disk which you can store, lend out to friends, of watch later on.

I'm telling ya, if PS3 surpasses them in the USA, there's a 50% chance MS will pull out of the console war. Because if they can't win now, blu-ray and their bad reputation (RROD, the fast abandonment of Xbox 1 and probably Xbox 360) will prevent them from winning the next round.

Their plan was good, but they didn't see the RROD coming, and they didn't think Nintendo would rise from its grave. So right now, they have their hardest battle before them, and not much ammo in their rifle.

But thats just the thing Rock on, the 5 billion dollar loss your referring to is a "Sunk Cost."

In economic terms, this means it shoudn't be (and won't be) taken into account when Microsoft decides whether or not to continue in the console business.  What will be taken into account includes:

-current assets (manufacturing facilities, developer relationships)

-cash-flow (they are currently making a tonne of profit) 

-future growth potential (the games market is EXPANDING) 

The number of consoles sold is irrelevant, only people who care about console numbers are fanboys. Real gamers care more about games and the best possible gaming experience available. The fact that one console sells more than another is meaningless. Big deal a load of random people bought console X over console Y and Z.
If you sell a huge number of consoles and generate an overall loss that is stupid. You will soon go out of business unless you are a huge company like MS. Anyway the shareholder's patience with MS is wearing thin and combined with a gloomy world economy, MS can ill afford to make billion dollar losses in the future in its gaming division.