Microsoft only sold 500,000 XBox 360 during Q1.

Microsoft has reported that they have sold 500K XBox 360 for the quarter ending 31 March. That's a huge drop from 1.7 million that they sold the quarter before. But of course, PS3 and the Wii weren't around last year. It's obvious that the newcomers are getting into Microsoft's share of the gaming industry.

Microsoft reported a loss $315 million, down from $402 million a year earlier. That loss also includes the cost associated with the launch of the Zune player (the so-call iPod killer, yeah right, iPod killer my ass).

The Wii seems to make the biggest dent, with over 5 million unit already sold since the November launch, while the XBox 360 sold over 10 million and the PS3 lacking behind with just over a million.

The real test will be the holiday season, probably around Christmas. By then, the hype should be over, so to speak, and people will come to their senses and release that the PS3 is an expensive piece of junk, XBox 360 is an even more expensive piece of junk if you add all the features comparable to the PS3 (notable buying a HDD and a HD-DVD player add-on), and the Wii is too popular for its own good, because you'll never be able to find one over Christmas.

It seems like Microsoft will have to cut prices of their gaming console to compete with Wii and PS3 (mainly the Wii, since PS3 is the most expensive of them all). That said, it will only increase the loss as Microsoft is still selling the XBox 360 at a loss.

Source: Gamasutra