Is it true Microsoft did lost billions of $ with the original Xbox?

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STXSambodog

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#1 STXSambodog
Member since 2009 • 236 Posts

I have been reading on the internet that Microsoft lost billions and billions of dollars on the Xbox.These same articles say that the Xbox was never profitable for Microsoft.Here is a link:
http://www.joystiq.com/2005/09/26/forbes-xbox-lost-microsoft-4-billion-and-counting/

Is this true?Or are these articles inaccurrate?

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RossRichard

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#2 RossRichard
Member since 2007 • 3738 Posts

That might have been true in 2005 (when the article was written), but the XBox division has been in the black for quite some time now.

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xgraderx

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#3 xgraderx
Member since 2008 • 2395 Posts

Its true for the original but not the 360.Microsoft knew they would lose money on the original but it was the cost of entering the industry.

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bachilders

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#4 bachilders
Member since 2005 • 1430 Posts

I think it's pretty standard to lose money at first with consoles, but you hope that licensing fees, online subscriptions, dlc and such will bring profit eventually.

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bigM10231

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#5 bigM10231
Member since 2008 • 11240 Posts

i thought all they did was take old pc parts and put them together and resell them:?

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Jackopeng

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#6 Jackopeng
Member since 2005 • 1426 Posts
Why the hell have you made 2 topics about this OP? One in system wars and the exact same one here :S:S:S:S
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Rocky32189

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#7 Rocky32189
Member since 2007 • 8995 Posts
Yes, they lost lots of money on the original Xbox, but they had planned to. In fact, they still haven't regained all the money they lost on the original Xbox. Microsoft still hasn't made a dime since they entered the industry.
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Stinger78

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#8 Stinger78
Member since 2003 • 5846 Posts

The majority of game console makers lose money or break-even on the console itself. Where they make all the real money is on 1st party software and licensing to 3rd parties. At least that's how I understand it. Now, over time, the parts that make up the console guts either get cheaper to acquire, OR the company finds alternative compatible yet cheaper parts to create new systems with. At the same time they might pass those savings onto the consumer in the form of a price drop.

I think Nintendo might be the only company to actually make money on their consoles from the beginning.

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Flame_Blade88

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#9 Flame_Blade88
Member since 2005 • 39348 Posts
I know they lost a lot of money, the original Xbox was never profitable for MS.
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Trinitarian

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#10 Trinitarian
Member since 2007 • 1407 Posts
didnt you already make a topic like this in system wars???
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Byshop

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#11 Byshop  Moderator
Member since 2002 • 20503 Posts

So I just read this article from the mid 1400s talking about how the Earth is flat. Is that true?

-Byshop

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MarcusAntonius

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#12 MarcusAntonius
Member since 2004 • 15667 Posts

MS was awash in red ink with the first XBOX. IIRC it wasn't until its fourth year out that it turned a profit. That was the cost for MS to join the home console market.