Xbox lost Microsoft $4 billion over 4 years

Xbox lost Microsoft $4 billion over 4 years

Not surprising really. They knew they would be a loss leader on hardware and general operating costs in order to be able to grab market share. Bill isn't stupid after all and he was trying to unseat the (Sony) 800 lb gorilla. Even Sony loses money on the consoles and expects to recoup this in games (either their own or via developer licenses on other folks releases). Microsoft had to realize the nature of the market and that it would be unreasonable to be able to amortize the start up costs over the life of one console release. I am sure they fully expect to start getting into the black with the 360.