360’s Sacrificial Plunge
We all know that the majority of game console manufacturers lose a significant amount of money when producing a system, and hope to make up the loss of profit with sales of software titles. Microsoft is a company that uses this method of marketing strategy. In a recent Entertainment and Devices Division report for this quarter, their losses show a drop in operating costs by $100 million.
This is actually due to less systems being made, as shipments have also decreased as demand for the system has decreased. Most potential buyers have already bought an Xbox 360, and those who are currently waiting for the Elite are going to have to grab some of the limited supply. This is also an effect of increased sales of portable devices of Microsoft, so it’s important not to only look at the gaming department. Profit loss is predicted to be even lower next quarter.
Read (arstechnica)
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