[Sigia-l] WhatsWrongWithU

[Will Parker]

On Feb 6, 2007, at 12:24 PM, James Melzer wrote:

> I gotta say, I love my xbox, and the user experience on the thing is
> amazing. But their build quality is crap and everyone I know is on
> their first or second warranty-replaced unit. Microsoft has got to be
> bleeding money on this thing. I appreciate their sacrifice, but it
> does make my wonder about their sanity.

When the first version of the XBox shipped, it was a well-known fact  
inside Microsoft that the company _lost_ $200 per unit sold at the  
original price of US $299. While cost (and selling price) dropped  
over time, I seriously doubt that Microsoft ever made any money on  
XBox hardware sales, and it looks like MS is losing similar amounts  
of money on the 360 consoles.

Microsoft's default business strategy, ever since the OS deal with  
IBM, has been to think of a product not as an end in itself, but as a  
means to secure future revenue streams. In the case of the xBox, the  
revenue streams in question are XBox Live subscriptions, direct sales  
of XBox games, and licensing of technologies related to the XBox.

It's all about the subscriptions and licensing fees. Everything else  
is incidental.

- Will
Will Parker
wparker at ChannelingDesign.com

"The only people who value your specialist knowledge are the ones who  
already have it." - William Tozier