So please, produce the article! Or maybe they meant a trillion yen!
I think they probably did mean a trillion Yen its a lot more believable.
Gotta love the rational discourse here.
But, yes, Microsoft DOES work at that scale. Microsoft has made itself 'essential and irreplaceable' in many aspects of the western economy. It's not that Microsoft has that much buying power, but that that much money flows through them. If you buy a car, for instance, chances are some of the computer hardware as well as the OS of your onboard diagnostic computer is from Microsoft.
But you're not paying attention to what I said - because the number seems, on the surface, insane. The thing is, the 'games and entertainment' aspect of Microsoft encompasses far more than both the X360 and XBox. You have to include things like WinG, XNA, DirectX, HD-DVD, Live, and a whole schlew of other products, as well as (perhaps more importantly) a number of commercial buyouts and services all in the name of 'entertainment'.
When you throw it all together, suddenly Microsoft's insane numbers start to make sense. But, why then, is the X360 so important to Microsoft's plans, if the $8 per annum loss on the console sales relatively minor, and seems like it would make more logical sense (from sales) to dump it?
Because Microsoft's goal has never been to profit from the X360. The X360 is a delivery medium for what Microsoft truly wants to be, the 'essential and irreplaceable' delivery medium for entertainment. If you want a game, move, song, what have you, Microsoft wants to be that link that makes selling it to you possible. In short, they want to be the ultimate middleman of the digital age - just as they are with Windows, etc. This is why you have insane buyouts and huge payoffs from Microsoft to other companies, all of which come out of this budget.
Microsoft has openly stated this as their goal, most notably when discussing features of XBox and Windows live. This isn't a coincidence, and isn't a 'marketing gimmick', Microsoft wants to be that cog - which all other digital entertainment must work around.
That's why the huge amount of money, and huge amount of loss. It's never been about 'being the number one console of this generation'. They don't want Sony and Nintendo out of business.. they want a cut from these companies, by making 'live' the standard that even their competitors have to follow.
Sound far fetched? Look at Microsoft's new partnering for DS applications and using XNA.
Still waiting for the link. Much of what you say is absolutely true and is common knowledge. I've been following the computer and videogame industry since the early 1980s, you're not talking to some ignorant newb. A TRILLION DOLLARS is idiotic. Period. The only thing irrational about this discourse is you.
Microsoft's annual revenue for 2007, THE TOTAL AMOUNT OF INCOME THE CORPORATION GENERATED BEFORE EXPENSES, was just over $50 billion. Their operating income was $5.2 billion. So please, tell me how Microsoft could afford to lose a TRILLION DOLLARS over the past fifteen years?
Go to the MS investor's page and look for yourself!
http://www.microsoft.com/msft/earnings/FY07/earn_rel_q4_07.mspx
