The only reason Xbox was 'profitable' was due to an accounting trick.
The Ultimate SKU of Windows commanded a premium license fee due to the inclusion of Windows Media Center, created by the eHome division. eHome, from an accounting perspective was part of IEB, the group that had the Xbox P&L.
I don't remember the exact license fees but Windows Vista Home was something like $30 and Windows Vista Ultimate was $75 to OEMs. That means for every copy of the Ultimate MS sold about $45 of revenue went to IEB from Windows.
When we envisioned eHome and Media Center we thought we were going to revolutionize the living room. Instead we ended up building a feature in Windows MS could charge more for.
The Ultimate SKU of Windows commanded a premium license fee due to the inclusion of Windows Media Center, created by the eHome division. eHome, from an accounting perspective was part of IEB, the group that had the Xbox P&L.
I don't remember the exact license fees but Windows Vista Home was something like $30 and Windows Vista Ultimate was $75 to OEMs. That means for every copy of the Ultimate MS sold about $45 of revenue went to IEB from Windows.
When we envisioned eHome and Media Center we thought we were going to revolutionize the living room. Instead we ended up building a feature in Windows MS could charge more for.