microsoft Has A Plan For The Xbox 360
In an interesting article from Fool.Com entitled "Why the Xbox
360 Is a Loser," author Seth Jayson points out that the Xbox 360
is costing Microsoft big money. The article discusses how the
Xbox 360 is part of a much larger plan that, if successful, will
eventually lead to profits.
It is no secret; Microsoft is losing money and lots of it on the
Xbox 360. Microsoft's home-and-entertainment division has
already lost $293 million on $1.57 billion in sales. And as
Jayson points out, the more popular the console becomes, the
greater the loss.
"Make no mistake: For now, and for the foreseeable future, the
Xbox 360 is going to cost Microsoft money. The consoles are sold
at a loss, and the costs of launching the new system will
continue to grow. The more popular the Xbox 360 becomes, the
bigger the losses will be." commented Seth Jayson in his article.
The reason being is two fold. Microsoft is in a "marathon, not a
sprint" to beat Sony (PS3) and more importantly, to be #1 in the
yet undefined home media PC market.
Down the road Microsoft will be able to build revenue from video
game sales, entertainment purchases, license fees, Internet
advertising, and revenue from developing products for your
living room
But for the time being, the loss has investors wondering if the
media giant is moving in the right direction.
Only time will tell whether-or-not the long term plan will pay
off. To be successful, Microsoft will have to depend on many
factors, with one of the most important being, plenty of 3rd
party support.