Engadget has reported that Kin mobile phone project turned into a major financial disaster for the software giant Microsoft.

The company reported that the company took in a $240 million hit largely because this product line was discontinued.

The report said that if the costs of acquiring Danger are added, this could possibly be a $800 million problem the company.

Microsoft recently discontinued Kin just weeks after launching it in the US market.

Microsoft said that they are redirecting the resources dedicated to the Kin project to their Windows Phone 7 team.