Microsoft's loss on the Xbox division is interesting. Most stems from huge marketing and selling the hardware at a loss.
Their obvious strategy is to crush the competition by just spending more, and then hopefully recoup the costs when they dominate the market. Personally I think it will fail.
They are offering games that only appeal to the existing market, yet given increasing costs, they need to widen the market or face lower profits or none at all.
Microsoft is a public company. Although they would like essentially buy a market, they have to justify the cost to their shareholders. How many more years will they continue to post billion dollar losses in the Xbox division and how long with shareholders put up with it?
What's really interesting in all this, is that despite the perception that they are losing the console war, Nintendo are actually doing very well. In the last fiscal year they made more money than Sony. That's ALL of Sony, not just the entertainment division responsible for the Playstation.
by Mr eel — Nov 03
Their obvious strategy is to crush the competition by just spending more, and then hopefully recoup the costs when they dominate the market. Personally I think it will fail.
They are offering games that only appeal to the existing market, yet given increasing costs, they need to widen the market or face lower profits or none at all.
Microsoft is a public company. Although they would like essentially buy a market, they have to justify the cost to their shareholders. How many more years will they continue to post billion dollar losses in the Xbox division and how long with shareholders put up with it?
What's really interesting in all this, is that despite the perception that they are losing the console war, Nintendo are actually doing very well. In the last fiscal year they made more money than Sony. That's ALL of Sony, not just the entertainment division responsible for the Playstation.