Why Microsoft is Still in the Gaming Business.

[MJA]

http://gamesfirst.com/?id=1514


"Back in April of 2006, Roger Ehrenberg over at Yahoo Finance wrote an interesting article on Microsoft's continuing losses in the gaming industry, and still champions some interesting points. After $5.4 billion lost on their Home and Entertainment division between 2001 and 2006, Ehrenberg asks, why is Microsoft still in the gaming business? No matter how you look at it, even if the H&E division saw a tremendous increase in profitability in 2007, meaning they reverse their billion dollar a year loss, it'd still take several years to recoup what they've already spent. Several years just to bring them back to where they were before the original Xbox released."

$5.4 billion lost.lol man thats a budget of country in Africa

[yoda313]

They are on a crusade against SONY.... that's the only reason I can see

(but they also want the xbox to become a second pc that everyone has to have )

[Faustus]

Are we talking consoles or PC games here? If consoles its about dominating at all cost. They will lose money to establish themselves as leader and their bank roll is big enough to not care.

[yoda313]

Well the highlighted part of the article mentions the xbox so it must mean consoles...

[ps2daddy]

They hope to gain market share and beat Sony in they console war this time and they have been doing pretty good on that end

Esp. since they dont sell the $500 PS3 anymore one the $600 on. You can get 2 xbox360's for 1 $600 ps3 most of the really popular games are from 3rd party vendors

I wont get a PS3 until they figure out how to mod it but I love my xbox360 for now

The Wii seems to be kicking the most butt since it came out so far though (but I am not touching anybodys Wii though)

[yoda313]

but I am not touching anybodys Wii though

Then get your own - you won't be disappointed

[ps2daddy]

ya got me!
That was funny

[thecoalman]

Are we talking consoles or PC games here? If consoles its about dominating at all cost. They will lose money to establish themselves as leader and their bank roll is big enough to not care.

Ditto, 6 billion is drop in the bucket to them especially when considering the possible long term gains. Being in business I can tell you when I go into a new area where my company is not known I have to drop my profits to establish myself. I don't lose money but I'm certinly not making what I want too. Once established I can raise my rates to what I want.