Update: Information in this article may be outdated and incorrect. You can find an updated article here.
Microsoft, who spent $2.1 billion producing and marketing their new gaming platform, the Xbox One, have reported a loss of $400 million since launching the console in November last year. This news comes from their Microsoft’s annual earnings report for 2014, and shows the loss is directly from the increased costs of production and advertising surrounding the launch costs of the Xbox One.
Accoring to the report, the company stated they had sold 11.7 million consoles in the 2014 fiscal year, compared to just 9.8 million the previous fiscal year which led to the company’s revenue increasing to $1.7 billion. Unfortunately, this was set against the costs which racked up to a cool $2.1 billion, thus the $400 million discrepancy.
From the report –
“Xbox Platform revenue increased $1.7 billion, or 34 percent, due mainly to sales of Xbox One, which was released in November 2013, offset in part by a decrease in sales of Xbox 360.”
“Xbox Platform cost of revenue increased $2.1 billion, or 72%, due mainly to higher volumes of consoles sold and higher costs associated with Xbox One.”
Sony President and CEO Kazuo Hirai is on record happily reporting the Playstation 4 has already been profitable on a hardware basis, back in May this year.
The question for Microsoft and the entire Xbox team now is how to gain ground, fighting as the underdog – something they are not used to doing.