Microsoft Surface Marketing Budget Exceeds Actual Surface Revenue

Despite an aggressive marketing campaign (that kicked off with a ‘click’ ad) there were obvious signs that the Microsoft Surface isn’t a hit. Or maybe it is. It hit Microsoft exactly where it hurts the most: revenue.

The company has recently filed its annual Form 10-K with the Securities and Exchange Commission, and from what we could find there it’s obvious: while the $853 million in revenue sounds good for some, Surface sales don’t meet Microsoft’s goals.

While we don’t know the exact number of Surface units sold, a little math and Geekwire helps us: if we hypothetically take the average price of $500 (the original price of the entry-level Surface RT), and divide the aforementioned revenue with it, we get 1.7 million Surface units sold since its launch as of the end of June.

The $853 million accounts for roughly 4.4% of the total Windows Division revenue for the Microsoft fiscal year that ended in June. You may recall that the company took a $900 million write off on Surface RT in an attempt to clear the unsold inventory, estimated at 6 million units.

But the funniest thing about this revenue number is that Microsoft has spent more for advertising Surface and Windows 8 than it made in revenue: the total bill for advertising costs reached $898 million. Compare that with $853 million in revenue form Surface tablets.