http://www.engadget.com/2011/01/27/microsoft-announces-q2-earnings-8-17b-profit-xbox-revenue-up/

I will check the lastest business report froom MS. But from the very beginning of the xbox 360 they made huge losses until 2009. This was the last business report i have seen. I will check the latest for you ^^.

I really wanted to like steam. I started using it once F:NV came out and really liked the idea of having one service to organize games. And steam sales are really great.
One weekend my wife was at work and i had some time to play but my router decided to die and steam displayed the same message as OP. Since then i decided not to buy anything from steam, even for a 1 euro.

Of course they did. Consoles are loss leaders. That's the actual nature of the business, not some sort of flaw in their strategy.

Though it was the 07/08 fiscal year they started making profits - http://kotaku.com/5026559/xbox-division-finally-reports-profitable-year - so I'm not sure where you're getting your figures from.

There aren't any, just as there aren't any that show how many people do replay video games; but, judging from the increasing market of second-hand sales of console games, the number of people who keep hold of their games so they can replay them seems small. This, correlated with the average gamers I know leads me to belive that the number of people who replay games is small.

Now, if you can bring proof to show me that I'm wrong I'm more than willing to accept it.


The consoles won't crash, that's exactly like saying that PC gaming is dying. There are more and more consoles sold each financial quarter, and console game sales are up as well.

Also, afaik, Microsoft already recovered the initial investment for the Xbox 360 (not sure on the original one) and are now actually making profits on it.

Yes sometimes MS generates some operating income as far as i have seen. But the margins are far too low for MS to be a sustainable business for MS. Is a personal opinion....

http://www.gamesindustry.biz/articles/2010-10-29-xbox-division-turns-USD382m-profit-for-microsoft

Really?

http://www.industrygamers.com/news/xbox-division-sees-86-profit-jump-as-microsoft-sells-63-million-360s-during-holidays/

Really?

Seriously, you're just utterly grasping at straws here. The Xbox division is profitable, growing, and is in absolutely no danger of crashing. It may be your opinion, but it's not justified by the actual facts.

I talk here about operating margins not absolute loss or profit.

So you can of course now tell me what those operating margins are, right?

Actually, don't worry about it, I found it myself. Margin is currently around 13%, predicted to rise to double that by 2017.

Lawyered!

Incidentally, the operating margin for Windows is actually expected to fall over the next half decade, partly due to the increase in competition from Linux and MacOS, partly due to the shortening of lifecycles - new operating systems are now expected every 2 years, instead of every 5.

Ironically, the reverse is true of the console lifespan - it's now expected that console lifespans are now 5-10 years, instead of 3-5. So it's actually never been a better time to have an established foothold in the market, like MS have.

all divisions together numbers of MS

2008-2010
in millions
Revenues:
2008: 60,420 2009: 58,437 2010: 62484
Operating income
2008: 22,271 2009: 20363 2010: 24098


Now the entertainment and devices devision

Revenues
2008: 8,495 2009: 8,035 2010: 8,058
Operating Income
2008: 445 2009: 108 2010: 679

These numbers are directly from the annual report 2010.

So you can clearly see that the marigns are way lower than the overall numbers from MS.

The margins being lower than other divisions don't mean anything - they're still good margins, and are still growing.

The Xbox Division's strategy is long term, and focuses on the next few decades ahead, not the next couple of years.

It's also fairly stupid to try to compare margins of pure software vs manufactured hardware.

Those games don't get in the stats AFAIK, except if they're developed and published by a MS studio.