That is true... but only if you have a very naive view of what Microsoft's intentions are for the 360. They didn't start fighting the console/gaming war for short-term profit! They did spend a lot of money on the Xbox and Xbox 360 (although the other divisions in the company more than make up for it), but that's always going to happen if a company wants to compete directly with Sony.

In my (and many other people's) opinion, from now on Microsoft will hardly lose money again on the Xbox 360. This last quarter they made profit already, and they stand to make much more from now on with great software sales. They had plenty of time to bring hardware costs down, and once you get into the profitability train, it's hard to start losing money on hardware unless you're forced to do significant price cuts.

Any price cuts they may do from now on will probably be small, so I see them breaking even or making money on hardware. In terms of software, it also looks like they're gearing up for massive revenue and profit, due to the healthy install base (especially in North America, but also in Europe and other PAL territories).

Look out for the end of the year, when Microsoft posts their next financial report for the ongoing quarter. If they post profit again, it's quite likely that they'll keep raking it in from now on. They stand to recover at least part of the money they lost so far in the console war, while at the same time fending off Sony and their attempts to take over the living room with their PS3 media center features.

Historically, Microsoft has shown time and again that they're perfectly willing to lose money when they want to break into a market. That's exactly what we're seeing now, and they're likely to start reaping the benefits in the upcoming months and years.

Paying loads of money for the rights to make ET, setting it up as the big holiday seller then giving your programming team just 6 weeks to make it.

CD-i games. Just all of them.

Not making an outcast 2

The huge amount of failed MMORPG's that are out there....it's like a dot com burst.


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A few counter claims.
800XL was a great computer by Atari, I owed one and loved it to death.

Rare lost alot of it's talented people when it was sold to Microsoft. The Rare that nintendo sold (49%) isn't the same as the one Microsoft bought. If Nintendo had bought rare, it might of been a very different company to what it is now, but thats something we will never know.

Really?  According to Wikipedia CD-I had a 16-bit 68070 CISC Chipof 15.5 MHz.  Pippin had 66MHz PowerPC 603 RISC microprocessor.  To be honest, I don't know as I have never seen a Pippen.  It is the only console aside from a  Amiga CD32  that I haven't seen in real life. 

 Speaking of the Amiga CD32.  Commodore built those in the Philipines to sell in the US, but weren't allowed to import anything, so they went bankrupt.   Another bad move.  In fact the video game hardware business has more bad moves than good moves. 

 And whoever knocked the Colecovision... that had some decent games for it.  I had an ADAM computer with Coleco games.  The controller sucked, but it was much better than the Atari 5200 and Jaguar controllers. 

How does their thinking at the time matter when we're looking at these decisions in hindsight?  I mean I'm sure most of the decisions people are pointing here probably looked like good ones to the people making them at the time otherwise they wouldn't have made them.

The current console generation

I'm not sure about the N-Gage. Nokia might get it right this time, or the next. But sure, it was an expensive lesson.

And I prefer the Gamecube's look to the "monster truck" Xbox.

I don't get all the Neo Geo complaints. The system well around for well over a decade. It was an arcade unit with swappable games. Most arcade machines costs thousands of dollars and only had the ability to play one game. The Neo Geo was $649 home version of the MVS arcade system. That part of the reason the system lasted so long. Arcade operators loved them. Instead of forking over thousands for a new cabinet for each game, the Neo Geo allowed them to pay a fraction of that for just the game. Not only that, the arcade iteration allowed several titles to be housed in one machine, increasing the chance of the Arcade Operator profiting off their investment.

If Sega released a home version of the Model 2 board it would have cost way more than $649 dollars and the games would have been more than the $200 Neo Geo titles cost. The Neo Geo was never intended to be a mainstream product. It was a niche system and any sales garnered from the home version of the system were just a bonus.

Now the Neo Geo CD was the system intended to make head way in the mainstream market. It did fail but that is another topic all together.

Nintendo - not using a CDROM for the N64 / Virtual Boy
Sony - $600 / Blu Ray
Microsoft - RRoD (although it doesn't seem to have hurt them as far as moving units)
Atari - ET / 5200 / Jaguar
Sega - Everything Saturn related
3DFX - VooDoo 4 & 5 / Never releasing Sage & Rage

This isn't the dumbest video game, business decision, but I hate it how Sony took the vibration out of the Playstation 3 controller!

Some of these don't belong.

1. At the time Nintendo was absolutely right in sticking with cartridges. Only a few game developers did anything useful with CDs. There was an embarrassing amount of shovelware and loading up games with FMV was the standard procedure. Like somebody said, if FF7 had been on N64 this wouldn't come up.

2. Was the Neo-Geo ever intended to be mass market? Regardless it lasted a long time.

3. Nintendo got money for Rare just at the right time. Even before the sale it was becoming obvious that the current Rare had no talent.

4. There were actually some pretty good games for Virtual Boy (Wario).

I am going to award the title to CD-i, mostly because it had the most hilariously dumb ads in the history of gaming.

I read an interview with the developer of the first 2 CD-i Zelda games, and the people running the division at Philips were insane. The system was released after the SNES, but it was less powerful than an NES. It was $700!