Microsoft losing $126 on every sold Xbox 360?

This time though they may capture a greater market share cos they are at least 6 months earlier than Sony. If you think about the original price of the PS2 in the UK...over £400...then the Xbox 360 pricing strategy is clearly a market penetration policy where in the long run they will make more money if there are a greater number of users.

Just speculating here but I think the Xbox 360 is low in price on purpose but not due to gamers but to try and capture what I call the "Tivo" market. What I mean by that is people wanting to buy a DVD player/recorder or media center may click on that actually the Xbox allows streaming from a PC as well as a lot of other cool Media Center functions. If they get the Xbox for this reason (a bit like people buying the PSP for video and music) then this could in the long run boost Microsoft's position in the home market for Media Center devices and perhaps allow them to do what they do best (or have done in past) and give the consumer what they want instead of bowing to tv networks like Tivo is doing.

[via Joystiq]