Increased R&D + Decreased income = New Xbox approaching

The New Xbox feels a lot closer this morning than it did last night.

The headline from Microsoft’s Xbox financials was the 94 per cent drop in operating income. But combine that with the massively increased R&D figure, and you have an inescapable conclusion.

R&D expenses were up 44 per cent year-on-year, reaching nearly $320m in the quarter.

Further evidence to add to the pot is Microsoft’s relatively weak upcoming Xbox 360 release schedule, which despite including undoubted chart hit Halo 4 also includes sales flop Fable: The Journey. And little beyond that.

Not that it’s game over for Xbox 360 just yet, of course. The Xbox 360 achieved a year-on-year sales increase, jumping from 1.7m units in 2010 to 2.3m this year. Also up are Xbox Live revenues.

Nonetheless, all signs point to 2013 being the year of the Xbox 720. Or Xbox 8. Or Xbox Infinity. Popular consensus suggests that at least one, if not both, of the New Xbox or PS4 will arrive next year.

The question now is simple. How long can Microsoft afford to wait?