Xbox to join the profit wagon in 5 years

Merrill Lynch analyst Henry Blodger has summarised his report on the Xbox for Microsoft, and explained how soon one should expect the unit to start showing profit. In a summary of his report, he said that although it is thought that the Xbox represents a big opportunity, "we do not believe it will become a major contributor to operating profit in the next five years." Microsoft's fiscal year starts on July 1st, and Mr. Blodger said that "near-term, we believe it will require substantial investment. We estimate $2 billion in losses before break-even in FY2005." The report, on which Microsoft had no comment to make, explains in great detail how Henry Blodger and his associate Justin Baldauf believe the Xbox will impact the world's top software maker. The report comes only a couple of days after rumours started of a possible delay to the Japanese release of the console. Whether this had any effect on the report is unknown. With strong competition from Sony and Nintendo this year though, Microsoft will have to pull a lot of financial muscle to shift units. Related Feature - Xbox to be delayed in Japan?

Source - Reuters