September 28^th, 2005 (12:12am) - A new report by Forbes entitled "Microsoft’s Midlife Crisis" revealed that in four years Microsoft’s Xbox game division has lost approx. four-billion dollars.

Microsoft has always stated that losses with the Xbox were expected, however, they claimed that these losses were a necessary sacrifice in order to have their presence felt in the home console realm of gaming. Microsoft is no small hardware and software developer, and it sure does have the capital needed to take large risks, while at the same time offering hardware and software that hopes to give players the most bang for their buck.

With the Xbox 360, it is also expected that Microsoft will take even more losses on the hardware than the original Xbox. Although, with the moderate success of their first Xbox game console, the company hopes to increase its market share, thus selling more consoles and, most importantly, more software.

Significant amounts of software sold could prove to be a massive turnaround for the company, but the problem is that next generation game development will cost, on average, more than it had in any other previous videogame generation. Add to that the costs of marketing and you could very well have another console from Microsoft that doesn’t necessarily bring in significant capital, if even make up for any losses.

The Xbox 360 launches on November 22nd.