Xbox to be profitable by 2008

In case you’ve forgotten, Microsoft it still losing money on every Xbox 360 it sells. The company adopted a sell now, recoup later strategy with the original Xbox, and has continued to operate in the red ever since. Robbie Bach, president of the company’s Entertainment and Devices division, recently stated in an interview with eweek that the Xbox line is projected to finally turn a profit by sometime next year. Citing diminishing losses as evidence, Bach noted that The division lost only $315 million last quarter, compared to the $415 million loss during the same period one year ago. He goes on to explain that Xbox actually has a number of different revenue sources, with console sales only accounting for a relatively small percentage of overall gross revenue, with Xbox Live ad sales accounting for more sales than you might think. A profitable Xbox? Perhaps Sony should start taking a look at Microsoft’s strategy, as it would appear that they have a few things to learn about pushing next-gen consoles into an exceptionally competitive market.

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