With figures like these it easy to see why there are voices that say that Microsoft should sell or spin off the Bing and Xbox divisions. Both businesses continue to lose money. Big money.

The company’s newest gaming console, Xbox One, for example, has resulted in a $400 million loss since it was released last November, it has been revealed. These figures come from Redmond’s annual earnings report for the year 2014.

And they had to do with the increase in production and promotion costs for the new machine.

Microsoft sold a total of 11.7 million consoles (both Xbox 360 and Xbox One) during the fiscal year 2014, which comes in as an increase of 1.9 million units year over year. As a result, the company reports a massive upturn in revenue.

But at the same time, this $1.7 billion in reported revenue has been offset by the $2.1 billion the company spent to launch and market the Xbox One console.

To be honest, Redmond will not be too concerned with this massive a deficit.

This new generation of console is still in the early stage of its lifecycle. And even though the direct competition, the Sony PlayStation 4 is outselling the Xbox One by a steady margin, a few strategic maneuvers is all it will take to turn things around.

Silencing the critics and investors, however, will take some doing.

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5 Comments
  1. So now what?

  2. This is why doing things based solely on investors. They spent 2.1 billion on market, launch events, and other things that went into getting it off the ground. That is not something that is going to be a early expense. Had they decided to only spend half as much money doing that, there wouldn’t be 400 million loss.

    • Correct. The deficit is obviously an issue, but the good news is this was probably expected during the first year rollout. The next few years will be very telling for the Xbox division.

  3. They could easily get the money back by selling games in the store. Market share is probably more important than profit in this early stage.

  4. This is wrong, you are not accountants, that’s for sure. Your adding apples and oranges.

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