Microsoft Taking Heavy Losses on Xbox

According to Red Herring Magazine, “Microsoft expects to lose $750 million in the current fiscal year ending June 30 and another $1.1 billion in the next fiscal year,” largely due to costs associated with the Xbox. Production cost alone on each Xbox console is $350, so, including advertising, distribution and other related costs, Microsoft is loosing over $150 on every console sold. However, even including the $750 million loss on the Xbox, Microsoft is still expected to report a $10 billion profit for the entire company this fiscal year.

Microsoft has also confirmed that they are currently developing an upgraded version of the Xbox compatible with Microsoft’s UltimateTV technology which allows for digital video recording.

Source: GameSpot