Microsoft could lose $1 Bln on Xbox by 2004 - Analyst

Microsoft could lose as much as $1 billion on its new Xbox video game console before breaking even in fiscal 2004, an influential Wall Street analyst said on Monday.

Morgan Stanley analyst Mary Meeker said the console faced competition in the short term but had long-term opportunity.

"We believe that Xbox could lose around ($1 billion) ... before breaking even in (fiscal 2004) if the product is reasonably successful," she said in a note to clients.

The Xbox is due for launch in the US on the 15th November at a cost of $299, with the GameCube following along 3 days later, costing $100 less! The other major console player, Sony's Playstation 2, is already well established, with analysts and industry observers expecting the PS2 to dominate the market this holiday season.

Microsoft has said it will spend as much as $500 million on the initial marketing for Xbox, and would have between 600,000 and 800,000 units available at launch, but later said it could not be sure. Most industry executives now expect them to ship 300,000 units at launch and 1 million to 1.5 million by year's end.

News source: Reuters

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