2005: “When Microsoft got into the console game in 2001, much was made of the fact that it lost an estimated $125 per console on each Xbox. Four years later, that per-console-hit has tallied to $4 billion of red ink for the Redmond, Washington-based software colossus, whose current-fiscal-year forecast calls for $44.5 billion in revenue.” Microsoft is a past master at taking huge losses on consumer devices to gain market share.

2005: "When Microsoft got into the console game in 2001, much was made of the fact that it lost an estimated $125 per console on each Xbox. Four years later, that per-console-hit has tallied to $4 billion of red ink for the Redmond, Washington-based software colossus, whose current-fiscal-year forecast calls for $44.5 billion in revenue." Microsoft is a past master at taking huge losses on consumer devices to gain market share.

Asked by unbearablehamster

True, but again, Xbox was a new product in a new division that did not cannibalize other divisions. Surface will cannibalize the Windows division.

That’s a division that brought in $2.4 billion in profit last quarter and $11.5 billion for the year. BTW, the Entertainment and Devices Division (which is essentially all Xbox being offset by Windows Phone)? It still *lost* $263 million last quarter.