In the Microsoft Earnings statement last week, the Entertainment and Devices Division revealed that they had a loss of $1.16 billion thanks to flagging Xbox sales. Instead of shipping 1.8 million Xbox 360s like they did in the fourth quarter of 2006, they shipped 700,000, which is a dramatic fall-off this early into a console's life cycle. What gives?
It's definitely not a lack of games, seeing as the Xbox 360 has a much higher library of titles to choose from compared with both the PlayStation 3 and the Wii. The two factors we can point to are one, the faulty hardware that led to a three year warranty from Microsoft, and two, the fact that both the Wii and the PS3 weren't on the market yet this time last year. Both combine together to push down sales of the 360 into six digits. We'll see if Microsoft can pull itself out of this one when Halo 3 comes calling. [Information Week via MTechXP]