Since launching Xbox in 2001, the Microsoft game console project has resulted in a $4 billion loss for the company, an amount estimated to be approximately equal to 10% of Microsoft's total cash reserves.
The Xbox game console was marketed by Microsoft as a loss leader with the plan of establishing a profit base derived from game sales and licensing to third party game publishers.
Microsoft intends to continue their loss leader strategy with the successor to their console, the Xbox 360, which will be released November 22, 2005, just in time for the Christmas buying season.
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Microsoft invested 4 billion USD into Xbox division