Sherlund says that if you back out the Android profits, Microsoft is probably losing $2.5 billion on Skype, Xbox, and Windows Phone. Of that, $2 billion in losses are attributable to the Xbox platform.
He appears to be saying that the Xbox platform loses $2 billion per year. Everything I've read says that the Xbox has been profitable every year since 2008.
The only reason Xbox was 'profitable' was due to an accounting trick.
The Ultimate SKU of Windows commanded a premium license fee due to the inclusion of Windows Media Center, created by the eHome division. eHome, from an accounting perspective was part of IEB, the group that had the Xbox P&L.
I don't remember the exact license fees but Windows Vista Home was something like $30 and Windows Vista Ultimate was $75 to OEMs. That means for every copy of the Ultimate MS sold about $45 of revenue went to IEB from Windows.
When we envisioned eHome and Media Center we thought we were going to revolutionize the living room. Instead we ended up building a feature in Windows MS could charge more for.
He appears to be saying that the Xbox platform loses $2 billion per year. Everything I've read says that the Xbox has been profitable every year since 2008.
Just one example source:
http://www.digitalspy.com/gaming/news/a512543/microsoft-back...