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Microsoft Surface revenue much less than its advertising costs

Microsoft left with the tab.

Microsoft's Surface tablet has made Microsoft a mere $853 million - less than the amount it spent advertising the struggling tablet and operating system Windows 8.

The company has kept quiet on Surface sales ever since its iPad-rival launched last October, but Microsoft has had to reveal the amount of money the tablet generated since then as part of its annual disclosure to the US Securities and Exchange Commission (via GeekWire).

Surface generated $853 million (£560m), Microsoft revealed. That sounds like a high number, but the company had already confirmed it would take a $900m hit in inventory costs following its recently-announced price drop.

On top of that, Microsoft spent a whopping $898 million promoting Surface and Windows 8 - alone more money than Surface took in. Based on the latest figures, Surface is thought to have sold around 1.7 million units lifetime to the end of June - significantly fewer than Apple's iPad.

Microsoft isn't giving up on the brand, however. New versions of Surface are expected to launch later this year, and the recent price drop is designed to help shift inventory ahead of this.

Microsoft boss Steve Ballmer recently reorganised his executive team as part of a continued focus on Microsoft becoming a devices and services-based company.

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Tom Phillips

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Tom is Eurogamer's deputy editor. He writes lots of news, some of the puns and makes sure we put the accent on Pokémon.

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