Guess how much Microsoft and Sony lost on the Xbox 360 and PS3?

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$8 billion – that’s just under £5 billion.

These figures were put together by Ben Cousins over at Kotaku, who points out that if you take the figures from two years preceding the launch of both the PS3 and Xbox 360 – to account for development and R&D – it took both companies years before they were making a profit from the divisions. For Microsoft it wasn’t until 2008 that it began to see an upturn, while for Sony it wasn’t until 2010.

However despite these late improvements, it doesn’t even come close to making a dent in the expenditure. In total Microsoft saw a loss of just under $3 billion, while Sony accounts for much more of the total, itself racking up losses of just less than $5 billion.

Microsoft Chart

While it's no fancy infographic, the graph paints a poor picture of console finances

A lot of this comes from the fact that console hardware is almost always sold at a loss, with manufacturers hoping to make up the money in software sales and through licensing agreements. Despite the insane number of games sold during this generation however, it barely made a dent.

Cousins uses these figures as part of his conclusion that the console market is dying. Perhaps he has a point, as making losses like this is hardly a sustainable business practice, even for giants like Microsoft and Sony. That said, the death of an industry that has a few hundred million bits of hardware out there also seems unlikely. Perhaps we’re looking at more of a change to the industry.

KitGuru Says: What do you guys think?

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3 Comments
  • Desco
    January 8, 2013
    #1
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    The prices can explain the graph.

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  • Klimax
    January 9, 2013
    #2
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    I suspect that early X360 with its RROD contributed to loss and without that MS would most probably break even. (No expensive extended warranty)

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  • Today’s Links | Xboxy
    January 10, 2013
    #3
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    [...] employee apparently reveals Xbox 720 specs: 8-core CPUGamingBoltGameranx -KitGuru -Gamenguideall 14 news [...]

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