- An old report reveals Microsoft spent $12 billion and lost over $2 billion developing the original Xbox.
- The console targeted over a billion homes to cover the costs and earn massive profits.
- Microsoft wanted the Xbox to be the primary entertainment source for every home.
Microsoft is one of the biggest gaming names of all time. However, over 20 years ago, when it didn’t have the Xbox brand attached to it, things were quite different. A significant amount of effort and investment has gone into shaping the brand as it stands.
According to an old report, Microsoft invested a massive $12 billion in Xbox and had losses of over $2 billion in developing and selling the consoles. The company believed that the investment would pay up in the future.
Why it matters: Spending this much in the early 2000s, especially when big names like PlayStation and Nintendo were already dominating the market, was a risky move.
A report by Gale Power Search from 2005 revealed details about the newly launched PS3 at that time and how Microsoft planned to counter it. With the PS3, Sony wanted to blur the lines between the real world and computer-generated cyberworld.
(Microsoft) has spent $12 billion and incurred losses of more than $2.4 billion developing and selling Xbox. It is targeting a billion homes with the world’s biggest software offer.
Robbie Bach, head of Xbox at the time, said that they lost over $2 billion with Xbox because they believed it would be compensated for. The target was to reach a billion homes, where Xbox will be the primary entertainment device, sending text, video, and audio messages.
The investment was worth it, as the Xbox 360 went on to become one of the best consoles of all time. However, since then, the company has kind of lost its way with hardware. It is still a major player as a publisher, but with Xbox consoles, the future looks bleak.
What are your thoughts on Microsoft facing over $2 billion in losses with Xbox? Let us know your opinions in the comments or join the discussion at the official Tech4Gamers forum.
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News Reporter
Abdullah is an avid gamer who primarily plays single-player titles. If you can’t find him anywhere, he’ll probably be at his desk playing The Witcher 3 for the millionth time. When he isn’t playing games, he’s either reading or writing about them.
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