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The Xbox is sold at a loss but overall is a profitable division for Microsoft. There is room in the market for loss-leaders, it's just a question of where to bu
by tghw 15y ago
The Xbox is sold at a loss but overall is a profitable division for Microsoft. There is room in the market for loss-leaders, it's just a question of where to build a revenue model from.
Unlike Android, HP could have run an end-to-end product, controlling the hardware, software, and app ecosystem, but could have tried doing it at a lower price. There's no guarantee the market would have supported it, but seeing how eagerly people snatched up the fire-sale tablets, it's kind of disappointing not to even see them try.
- tptacek 15y agoThe Xbox is only useful in tandem with its consumable $30 games. It's a prime candidate for a razor/blades strategy. In comparison: (a) Tablets are useful without buying a single app. (b) The price point on apps is far lower than on Xbox games. (c) Apps are on the whole less consumable than games, most of which lose much of their value after just a week or two of use. (d) The sole use case of the Xbox is to facilitate games, which means that everyone who owns an Xbox buys them. The key value propositions of a table are "watch video, browse web, read books", and in each of these three categories the apps to facilitate them are either built in or free. I share your disappointment, but don't believe my disappointment rebuts economic reality.
- swilliams 15y agoDon't forget the vast quantities of accessories for consoles. Extra controllers, Xbox Live, downloadable content, are huge profit centers for the Xbox division.