Microsoft takes a $100-$200 loss on all Xbox Series X|S sales

The_Mike

I cry about SonyGaf from my chair in Redmond, WA

According to Microsoft Gaming CEO Phil Spencer, Microsoft is selling Xbox Series X|S consoles at a hefty loss of up to $200, though that loss could be reduced next year.​


During a recent interview with Wall Street Journal, Microsoft's head of Xbox Phil Spencer said that the company is still selling its Xbox Series X|S consoles at a loss of up to $200 per sale, in the hope that it can recoup that money via other means, such as Game Pass subscriptions, game sales via the Xbox Store, and accessories.

Xbox Series X|S consoles don't turn a profit​

"Consoles evolved to a business model much different than phones," Spencer said. "Consoles are actually sold at a loss in the market, so when somebody goes and they buy an Xbox at their local retailer, we're subsidising that purchase somewhere between 100 and 200 dollars, with the expectation that we will recoup that investment over time through accessory sales and the storefront."

Selling consoles at a loss isn't unheard of in the gaming industry, especially as game technology, consumer expectations, and competition increase with each new hardware release. Companies are caught in the middle of upgrading their hardware and keeping the prices at a reasonable level, which more often than not, leads to consoles being sold for less than their manufacturing costs.

Microsoft said during the Apple and Epic lawsuit that it had never earned a profit from console sales, instead relying on the Xbox Store and other means of earning the money back. The company regularly releases new variants of its official Xbox controller, such as the recent Lunar Shift, as well as the slightly more expensive Elite Series 2.

The same interview uncovered also revealed that Microsoft could be increasing the prices of its consoles, games, and subscription services next year, although Spencer has said that any increase won't be implemented until after the holidays. While we might be paying a little more for it next year, there are still plenty of awesome titles to look forward to coming to Game Pass in 2023.

https://www.trueachievements.com/n51690/phil-spencer-xbox-series-x-s-loses



I know both platforms are bleeding losses per sold console, but its easy to see why Microsoft are also focusing on Cloud. I don't know if that's way cheaper though with the infrastructure.
 

The_Mike

I cry about SonyGaf from my chair in Redmond, WA
Please tell me Jimbo is losing less per PS5 sold.
Theres an article in a thread in here somewhere saying the reason Sony increase the price of ps5 is because its more expensive to produce it now.
 

Aenima

Member
Please tell me Jimbo is losing less per PS5 sold.
1 year after release the PS5 disk version was already making a profit, only the digital version was sold at a loss. Dunno how things are now since alot of material prices changed and Sony even raised the console prices.
 

DenchDeckard

Gold Member
Someone is telling the truth or everyone is bending it.

I wish someone would ask Sony how much they are losing per unit.

Alot changed in the world since Sony announced they would be turning a profit 6 months after launch.
 
The division as a whole is turning a profit so unsure how this matters. And even then, its always interesting to me how much consumers/end users worry about this sort of thing, something that in no way affects them.
 
I know Sony isn't taking loses like that with their revisions and even brought prices up in certain regions. It helps that Sony is good with parts, manufacturing, being a hardware company I assume.
I wonder if Microsoft doesnt have these type of avenues to revision to get the system made cheaper or get parts cheaper? Now we know why they are pushing gamepass so hard, on top of other subscriptions.
 

nocsi

Member
fixed for you
Nadella knows, the entire Azure division is carrying the company on its back.
The division as a whole is turning a profit so unsure how this matters. And even then, it’s always interesting to me how much consumers/end users worry about this sort of thing, something that in no way affects them.
The division is profiting as it proceeds to acquire a company for $80 billion dollars in a weakening economy.
 

feynoob

Member
There are still 3-4 people who think MS gaming division is losing money overall.

It’s part of their headcanon view of the world, there’s nothing more to explain about it really.
Xbox consoles and to extent PS console were sold at a loss.
3rd party sales is where the money is. 30% cut for every game on your platform covers that loss. Not just your 1st party games.
 

Neo_game

Member
Yeah not buying it. Sony was breaking even months after launch and they are losing $200 Two years after launch?? Nonsense.

Are you sure about it ? To me Sony definitely cheaped out on original PS5 model as well and then further down the line they also did on the heat sink and now with the 6nm chip as well. Why would they be doing this if PS5 was not making loss. ? The DE PS5 is definitely the great deal IMO considering its specs. SX was obviously going to be more expensive since it chip is 20% bigger and has better cooling as well.
 
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feynoob

Member
Nadella knows, the entire Azure division is carrying the company on its back.
Do you really think xbox is burning money?


The division is profiting as it proceeds to acquire a company for $80 billion dollars in a weakening economy.
Microsoft is the one that bought them, not xbox. MS used the money, which was sitting on their bank to acquire an asset. Or else, that money would have lost some value, especially with current market, where other money value is dropping like flies.
 
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