Neowin.net

Microsoft Corp. nearly doubled its losses from the Xbox video game console in the December quarter, according to a regulatory filing on Friday, as the unit that makes its Office software closed in on Windows as being the company's most profitable.

In a quarterly report with the U.S. Securities and Exchange Commission, Microsoft said it posted operating income of $1.97 billion in the December-ended quarter in its Windows-centered business unit on revenue of $2.44 billion. That was down from income of $2.11 billion and revenue of $2.68 billion a year earlier.

Microsoft's Home and Entertainment segment, which includes the Xbox, games for personal computers and the company's TV products, posted an operating loss of $348 million in the quarter on revenue of $1.28 billion.

The company loses money on each Xbox it sells, with some analysts pegging the shortfall at more than $100 per $199 console, meaning that strong sales for the platform actually increase its losses.

News source: Yahoo

Another analyst firm came up with similar estimates that measured the cost of cleanup rather than of lost productivity. Technology market researcher Computer Economics estimates that the worm cost between $750 million and $1 billion to clean up, said Mark McManus, vice president of technology and research for the Carlsbad, Calif., firm.

"The labor costs, although significant, weren't as bad as Code Red," McManus said. Analysts at Computer Economics had estimated that the LoveLetter virus cost almost a billion dollars in cleanup and more than $7.7 billion in lost productivity.

Many security experts argue, however, that while SQL Slammer is easier to clean up, the worm was worse overall than Code Red--which attacked more servers but didn't affect infrastructure, such as financial systems.

"This worm did something that we have not seen before," said Peter Allor, director of operations for the Information Technology Information Sharing and Analysis Center (IT-ISAC). "In this case, the customer was affected," he said. "People weren't getting dial tones, airplanes couldn't fly, ATMs weren't giving cash."

Data on computer viruses has always been lean. Putting a dollar figure on the losses incurred by malicious code is difficult at best, said Michael Gartenberg, research director for Internet industry watcher Jupiter Research.

"It is a billion soft dollars, and that is an important part of an equation," he said, stressing that the losses weren't actually coming out of companies' wallets. "Measuring productivity and translating it into dollars is a hard thing."

In the past, analysts have tried to bill a variety of events to lost productivity. Last May, outplacement service Challenger Gray and Christmas estimated that the first day of "Star Wars: Episode II--Attack of the Clones" would cost firms $319 million in lost productivity from workers calling in sick and taking days off. In addition, Internet monitoring software maker Websense estimated in May 2000 that a Webcast by underwear retailer Victoria Secret would cost businesses $120 million in lost productivity.

Mi2g's Matai said there is a big difference between those numbers and the losses incurred by malicious code.

"I don't think we are looking at productivity loss like that at all," he said. "We are looking at how many servers went down, what was the utilization of those servers and what kind of traffic didn't get through," he said. "The administrators could do nothing until they sorted all that mess out. So it is a different measure of productivity loss."