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Tuesday, October 04, 2005

Microsoft Loses $4 Billion On XBox, Scorns Military Option

Microsoft Loses $4 Billion On XBox, Scorns Military Option

"Of course, hot on the heels of the Gizmondo news, we hear something about Microsoft. This article in Forbes chronicles Microsoft’s ongoing business troubles. What leapt out at me was this: They’ve lost $4 billion on the Xbox business so far. This is why Microsoft is going to win the console wars. They can throw away $4 billion simply to prove a point. I just wonder if the mad geniuses at Nintendo are doing some kind of zany Rope-A-Dope. Let the two giant, rubbery monsters slug it out while you continue actually making money in the industry, then step in and take over once they exhaust themselves.

In the interest of giving this some scale, I looked into what $4 billion would buy. “A lot” wasn’t a good enough answer, so I had to come up with something else. Where do you turn when you need insane expenditures? The answer hit me like a Windows error message to the face: Military hardware.

A Nimitz-class aircraft carrier costs the Department of Defense about $4.5 billion. Granted, that doesn’t count the crew and the jets, but they could use the losses from the Xbox 360 to finance those. If you don’t need the absolutely-very best, the asking price on the World War II-vintage former-HMS Vengeance was about $4.5 million. On last report, the old girl was headed for the scrapheap, but I guarantee there’s a bunch of WWII-era carriers floating around South America and scrapyards that could easily be refitted for $4 billion.

Alright, so maybe you don’t want to be noticed. The B-2 Spirit stealth bomber costs about $2.2 billion, a hefty sum indeed, but can you put a price on “What happened to Apple?” “I dunno, it just blew up in the night”? I think not. Maybe the aerial angle isn’t your thing? How about a sub that can be rigged for cruise missiles for under a mil? Sure, Soviet subs aren’t the best in the world, but a company that truly can torpedo the competition, well, you can’t put a price on that." [more]

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