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.
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.