[InclinedPlane]

If profit figures were available we wouldn't be having this discussion, because the answer would be obvious. But they're not. Nintendo's figures are the most available (since gaming is the majority of their business and they are a public company), but the least relevant because we know they've been struggling. Sony has had reduced profitability and losses over the last few years. The interesting thing is how difficult it is to get numbers out of Microsoft. They fold the Xbox and console gaming part of the company in with web-based gaming and the windows phone (and formerly zune) part of the company, which muddies the waters considerably. Overall though there are many indications that console gaming has been profitable for Microsoft. For example, in 2012 alone xbox live made $1.2 billion in revenue. This is a very high-margin business for MS and that represents about 10% of the entire worldwide video game revenue.

MS has dumped a lot of money into console gaming, but they've built a business that is now generating a lot of revenue in a lot of high margin areas.

[pandaman]

I think your numbers are way off, the entire worldwide video game revenue is not anywhere around $12B[1]

Also margins are not as high as you seem to imagine, look at any 3d party publisher reports (they are all public corps).

[1] http://in.reuters.com/article/2013/06/10/gameshow-e-idINDEE9...

[Keyframe]

If it's such a successful business for Microsoft, how come potential next CEO of Microsoft is thinking of ditching that business to someone else? Is he insane or that business is a burden to Microsoft?