Yeah, PCs. Until Mac makes a gaming console. the Xbox war is one I am not fighting.
Now, that said, we can talk about X box. The hardware that they have NEVER made a profit on yet.
Now, before anyone goes off into left field, THINK about what I just said. NEVER. And PROFIT.
That is, I know they lost over 6 billion the first 4 years on it, and I know they actually DID earn more than they spent for the first time in 3rd Quarter 2008, and have from time to time posted quarterly gains in profit loss statements.
But that is NOT a profit. A profit is if you spend 100 total and make 101 or more back.
Spending 100 a quarter and having most quarters return 50 and a few return 101, does NOT make for ANY actual profit.
So, fine by me if anyone wants to play the Microsoft does make hardware look at Xbox HA HA HA.
Sure.... LUV to look at it. It’s the perfect example of my whole text book case for why they should NOT BOTHER.
I do not know why they got into the game wars... it has burnt capital and is a bigger albatross than their OS woes.
But, I do know this much.... Apple has 5 toes in the water with all the games on the App store and Sony and Nintendo and Microsoft TREMBLE and say their prayers every night before bed about the Apple boogyman. Because someday, it’s gonna come and everyone knows it. The profits on Xbox and Sony are only a short span away from being loss leaders to outright leaders, and they all fear the iPhoning of the console.
And they should. Apple isn’t a PC company anymore. They changed the name a few back and they meant it. Apple WILL do a gaming console, when they have it perfected. And it will change EVERYTHING, just the way the mouse did, the GUI did, the USB port did, the iPhone did, etc etc etc etc.
And I can hardly wait. Half the reason I have Windows on this is for my Fallout 3!
Spending 100 a quarter and having most quarters return 50 and a few return 101, does NOT make for ANY actual profit.
Microsoft is now making about $180 million per quarter net profit on Xbox; if you think short term, yeah, they've lost. However, think long term (like Microsoft tends to do): they'll make their investment back around 2013, and then start adding $800 million a year in additional profit.
Short term, it might look like a bad deal, but Microsoft doesn't look at the next 4 quarters or 4 years. When they go after a market (like the gaming console market), they are in it for the long run and will not quit until they win. And when they win, they make profit - lots and lots of profit. And they ultimately make it all back, and a lot more.
Don't overlook Microsoft's Entertainment and Devices group (which includes the mice, keyboards, webcams, headsets, Xboxes, and a host of other PC accessories). It accounts for about 15% of their corporate NET profit, it is a very profitable group inside Microsoft.
Say what you will about them, but they make a LOT more revenue and a LOT more profit - and a higher return on revenue (profit margin) - than Apple. They KNOW how to make money.