Speaking to San Jose Mercury News journalist Dean Takahashi, Microsoft COO Kevin Turner stated that the losses incurred by the Xbox division are considered investments for the future, and necessary for making Microsoft a viable presense in the console wars.
“People forget. Steve [Ballmer, Microsoft CEO] reminds me it took seven, eight, or nine years before Windows was profitable. People forget that. We’re in it for the long term. This is a company committed to invest for the long term. We would like to make money quickly. But that’s not what changes the world. That’s not what innovation allows you to do. Regardless of what you look at, it takes a lot of years. This is a company that is committed to sticking to things that we believe in. Certainly, this is a space we believe in.â€
The original Xbox cost Microsoft over 4 billion dollars over the course of its life-span, a fact which many point to as the primary motivation for launching the Xbox 360 (which makes more money of peripherals such as the hard-drive). As of June 2006, the Xbox 360 can cost Microsoft an additional 1.26 billion dollars.
Microsoft is hoping that the games division will begin turning a profit in 2008.
