Could the 360 actually turn a profit?
It’s no secret that the Xbox 360 doesn’t make a profit for Microsoft. In fact, it loses hundreds of millions of dollars for the company every year. This is also nothing new for Sony, who has the same problem with the PS3, and did with the PS2 for a long, long time. This, to put it simply, is because the consoles cost more to produce and market than what the sales price is.
But could the Xbox 360 be poised to actually start making a profit? According to Robert Bach, President of Microsoft’s Entertainment and Devices Division, says it can. And soon. In a recent interview with eWeek, Back laid out the groundwork for how the 360 is poised to start making Microsoft some real money, and to sum it up to you all: Xbox Live Marketplace, and Peripherals.
You know, this is a healthy way to look at console profit. You’re almost never going to make any money off the machine itself, unless you’re Nintendo. I don’t know how they do it, but they always seem to make profits off their console hardware… makes me think they use slave labor, or something. But for Sony and Microsoft, the key to the green is in the accessories. Xbox Live’s Marketplace (along with the video marketplace) may not have anything overly expensive, but the sheer number of purchases for items and classic games over the Arcade will add up. Not to mention that every 360 owner I know has bought a billion different accessories for their 360, from wireless controllers (and batteries for), to the wireless router, etc.
So, what do you all think? Could Microsoft actually start making some money off of this thing before too long?
[eWeek]
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May 4th, 2007 at 9:27 pm
You write “You’re almost never going to make any money off the machine itself, unless you’re Nintendo. I don’t know how they do it, but they always seem to make profits off their console hardware… makes me think they use slave labor, or something.”
I maintain that the answer is simple (especially with the current gen of consoles); they are 1 full generation back. The Wii is little more than a GameCube with a motion sensing controller. There is nothing new with the hardware that wasn’t around 5 years ago. That is how they can turn a profit.