More X-Box Woes

According to a report by Meryl Lynch financial analysts, Microsoft may loose as much as 2 billion dollars on the X-Box over its first three years of release, potentially not seeing a profit on the system until 2005. Microsoft is expected to spend $500 million on marketing, and roughly $375 per system to produce the X-Box console, although retail price on the system is anticipated to weigh in at no more than $299. It’s expected that Microsoft will lose at least $125 per system sold but will hopefully recoup at least some of that loss in the profit margin on software and perhiperal X-box hardware. The expectation from market analysts is that the relatively small installed user base for the Playstation 2 and the marketing push behind the X-Box may enable to X-Box to enter the market in the number 2 or 3 position and possibly even surpass Sony’s Playstation 2 sales. The X-Box will include a 733MHz Intel processor, built-in support for broadband internet content and other network connections, an 8GB hard drive, high-end video and audio processors, and is expected to launch with 20 software titles.

Source: CNET News