Everyone and their aunt knows that launching a next-gen console costs an arm and a leg, and no one knows about financial loss more than Microsoft (or Microsoft’s Aunt). PC Advisor reported that President of Microsoft,s Entertainment and Devices Division, in the company,s annual Financial Analyst Meeting, said that the Xbox business will lose money for the second year in a row in fiscal 2007, beginning July 1; however, the loss will be smaller than it was in 2006–the transitional year for the Xbox 360. According to Bach, the Xbox will finally see profit in fiscal year 2008.
Microsoft has put about $3 billion into the console so far, and Wall Street analysts are becoming concerned about when they will start seeing a return on their investments in entertainment and online services.
“This is something that will take time,” said Bach. “This is not a six-month initiative. This is a three, four, five-year investment.”
