Next Gen Console Commentary

Today has seen a bit of commentary on each of the three next-gen consoles, all relatively positive. The PlayStation 3 has seen users for the PSN community crack the 1.3 million mark, according to Next Generation. If you enjoy the Wii's Virtual Console feature, Chris Kohler has you set up today with a rundown on every VC title rumored or released to date. Nintendo's consoles are selling pretty well, too. Microsoft has had something of a mixed day. On the one hand gamers can look forward to Beautiful Katamri coming to XBLA in the states. On the other, an investment adviser has called Microsoft's entire gaming business a 'disastrous endeavor'.

Re:Losing Money != A Bad Thing

[Maxwell]

Microsoft making game hardware is like Ford making refrigerators. Branching out is one thing, straying so far from your core competencies (i.e. what you are good at) in an industry plagued with losses is not smart for shareholders, yourself included. Microsoft is sitting on piles of your money, and they keep throwing it away on game consoles with no end in site. Sony lost $1B so far on the PS3. Microsoft loses that every year, year after year (approaching six years now)! I don't own any shares, but if I did I would want my share of Microsoft's profits in a dividend, not thrown away on a lost cause like Xbox. The cries to bail out will only get stronger as PS3 creeps up on Xbox360 in global sales...

JON

Re:Losing Money != A Bad Thing

[Anonymous Coward]

Actually, during their last quarter, the Xbox 360 by itself was profitable. The problem is that the 360's numbers are mixed in with their other "entertainment" projects like the Zune and whatever tablet internet appliance thingy they are putting on the market any particular year. Had the Zune not launched- and launching a whole new product line usually cost at least $500 million in advertising and startup costs- their entertainment division would have shown a profit. As it was, they showed a much smaller loss than previous quarters (despite the Zune flopping). The simple facts are 1) They sell each 360 consle at a profit (~$75) and peripherals and games are pure profit. 2) They don't have to lower their console prices anytime soon because Sony just eliminated their lower cost model (so the least expensive 360 is HALF the price of the ONLY PS3) and Sony is losing ~$200 per console (and Blu-ray is a total flop) 3) Microsoft has just launched several hit IPs like Gears of War and Crackdown and have many more in the wings like Too Human and Mass Effect. 4) XBox Live Marketplace and surprisingly Video Marketplace have taken off beyond anyone's wildest expectations so that's more pure profit 5) Halo 3- nuff said. The 360 project is already making more money than it burns and Microsoft will probably make back their investment easily within two years. They've also stopped Sony dead in their tracks and are eating into their market position as the PS2 dies off (360 had four of the top 10 sellers last month while the PS2 only had two). So it's making money and it is expanding them into a new market. I don't see how you could call that anything but a success.