Robbie Bach, president of Microsoft's Entertainment & Devices Division, smells profits a'comin. Speaking to eWeek, Bach said that the Xbox 360 "[is a business that will be profitable next year -- we'll make money next year and that will be the first time, which is pretty exciting."
As to where the profits will come from, exactly, Bach offers this explanation:
- Software, both first-party games and third-party title through royalties
- Xbox Live: Bach relates this to an amalgam of subscription, ad-based, and download-based business models.
- Peripherals (e.g. camera, controllers)
Concerning the hardware itself, Bach asserts that they will probably break even in the console's lifespan (i.e. as the cost come down, the profits from the units will eventually compensate for the losses
Microsoft endured in the system's early years), although he also notes that the price of memory "goes up and down seemingly like a yo-yo."
It will be a landmark event if Microsoft begins to turn a profit, since as Bach noted they have yet to do so
in the in almost six years since Xbox One debuted.