• Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.

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

Pedro Motta

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.
Did the Series X/S had any revisions yet? Because the PS5 clearly had 2 revisions already that most certainly cut the costs.
 

SlimySnake

Flashless at the Golden Globes
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. The DE PS5 is definitely the great deal IMO considering its specs.
May 2021.
"I’m pleased to say that the PS5 standard edition will break even from next month’s production," Ryan revealed. "From then on, we project that it will gradually become increasingly profitable." The standard edition of the PS5 with a disc drive currently makes up the majority of PS5s sold. Ryan revealed PlayStation expects that split to shift slightly in the future, but for the digital edition to always be outsold by the more expensive model.

Why do you think Sony raised the price of the PS5 in most territories?
Because they are greedy and saw the demand. See above.
 
Last edited:

feynoob

Banned
What? Dude, if you have anything to say or refute what I said please just spill the beans. Otherwise just STFU and GTFO.

The fucking nerve on these kids..
Calm Down Kenan Thompson GIF by Saturday Night Live
 
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.

Sony hasn't told their investors any thing else. So they are probably still making a profit off hardware. It also helps that they increased the price and made several revisions to the hardware. Something that I don't believe the competition has done.
 

DeepEnigma

Gold Member
No because the heatsinks have shrunk on each model. Using less copper etc. The new model is probably saving quite a bit but offset by component price increases worldwide.
I'm talking about the Series X/S. They are on the same model numbers, which means they have yet to have a revision to reduce costs. I know Sony has had 2 already, most recent also being 6nm.
 

nocsi

Member
Do you really think xbox is burning money?
Office365 for instance uses less resources and charges customers more. Xbox isn't charging its customers what it should be.

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 lost some value, especially with current market, where other money value is dropping like flies.
Right, you're correcting something that's meaningless in my context. What I'm saying is - it's not a great time to be doing M&A in this current economy. And no, the money isn't "use it or lose it" lol
 

feynoob

Banned
I bet that 200 dollars is the cloud juice they put in each box.
Expensive parts, which gets more expensive in the current climate.
Usually these parts gets cheaper. But this time, the economy is in shamble. So those prices won't drop any time soon.
 

AJUMP23

Member
Expensive parts, which gets more expensive in the current climate.
Usually these parts gets cheaper. But this time, the economy is in shamble. So those prices won't drop any time soon.
Definitely cloud juice. It brings the power.
 

feynoob

Banned
Office365 for instance uses less resources and charges customers more. Xbox isn't charging its customers what it should be.
30% cut for every game sold at their system. That is alot of money, if they can manage to increase the supply of their consoles.
Controllers and accessories are another part money making.


Right, you're correcting something that's meaningless in my context. What I'm saying is - it's not a great time to be doing M&A in this current economy. And no, the money isn't "use it or lose it" lol
You have to spend your money, by buying assets. Especially when those assets are getting cheaper, due to the current economic.
Activision generates insane profits, and would bring alot of money for them. Especially on the mobile market, which they don't have.

It's much better option, than leaving your money in the bank.
 

Bragr

Banned
The PS5 and Steam Deck are losing a lot per console too.

This is why Nintendo makes underpowered hardware, they are the only ones who aren't losing a lot from console sales, which is also why they aren't jumping on a new powerful system right now.
 

feynoob

Banned
The PS5 and Steam Deck are losing a lot per console too.

This is why Nintendo makes underpowered hardware, they are the only ones who aren't losing a lot from console sales, which is also why they aren't jumping on a new powerful system right now.
Nintendo plays dnd, while others chase after expensive stuff.
 

SmokedMeat

Gamer™
You can’t tell me manufacturing costs haven’t dropped? These consoles aren’t using the latest components.

Also make no sense that Microsoft is losing $100-$200 per unit and Sony’s breaking even? Someone’s a liar.
 

GHG

Gold Member
You can’t tell me manufacturing costs haven’t dropped? These consoles aren’t using the latest components.

Also make no sense that Microsoft is losing $100-$200 per unit and Sony’s breaking even? Someone’s a liar.


And that's after they already raised prices last year.

Common theme across all components, raw materials and even logistics costs.

People need to get away from the idea that older=cheaper. That's not how it works in an inflationary economy.
 

John Wick

Member
You can’t tell me manufacturing costs haven’t dropped? These consoles aren’t using the latest components.

Also make no sense that Microsoft is losing $100-$200 per unit and Sony’s breaking even? Someone’s a liar.
Manufacturing costs have gone up all over the world or have you been asleep all this time?
Components and transport too. Energy and fuel costs affect evedybody.
 

John Wick

Member

And that's after they already raised prices last year.

Common theme across all components, raw materials and even logistics costs.

People need to get away from the idea that older=cheaper. That's not how it works in an inflationary economy.
Also don't forget energy and fuel costs are through the roof. They are used in everything including transport and manufacturing. Also with the Xbox APU for Series X will be expensive too.
 

Pelta88

Member

"I’m pleased to say that the PS5 standard edition will break even from next month’s production," Ryan revealed. "From then on, we project that it will gradually become increasingly profitable." The standard edition of the PS5 with a disc drive currently makes up the majority of PS5s sold. Ryan revealed PlayStation expects that split to shift slightly in the future, but for the digital edition to always be outsold by the more expensive model. "


This news hit the stock market 18 months.
 

Robb

Gold Member
That’s quite a lot. Seems strange that they’re taking such a big hit compared to Sony when the system feels very similar to Ps5 in terms of the hardware.
 

SlimySnake

Flashless at the Golden Globes

And that's after they already raised prices last year.

Common theme across all components, raw materials and even logistics costs.

People need to get away from the idea that older=cheaper. That's not how it works in an inflationary economy.
Manufacturing costs have gone up all over the world or have you been asleep all this time?
Components and transport too. Energy and fuel costs affect evedybody.
And yet, GPU prices have crashed. SSDs prices have crashed. RAM too. Why are consoles different?

Dont believe these liars. They both have their own agendas. You dont go from making profit in June of 2021 to losing money so much you have to raise price by $50. And for MS to be losing $200 two years after launch would be a bigger fuck up than Sony losing $200 on PS3s at launch. A console that broke even by year 2. So either Microsoft has created an even bigger fuck up than the PS3 or someone isnt being completely honest. Im gonna go with the latter because these consoles are using parts the PC industry uses. No fancy Cell like processors or expensive $250 blurays. Their APUs are made using the same 7nm tech AMD uses. MS's SSD is literally an off the shelve part. Same thing with their RAM.

Xbox One's BOM was $471. And that was with the kinect. Without the kinect, they were able to sell it for $400 and break even. For them to say that the Xbox Series X's BOM is $700 is nonsense.
 

SmokedMeat

Gamer™
[/URL]

And that's after they already raised prices last year.

Common theme across all components, raw materials and even logistics costs.

People need to get away from the idea that older=cheaper. That's not how it works in an inflationary economy.

Manufacturing costs have gone up all over the world or have you been asleep all this time?
Components and transport too. Energy and fuel costs affect evedybody.

Yeah, I guess I had the blinders on as to how it used to be.
Maybe this is why we haven’t seen a Switch 2 yet. Nintendo doesn’t like to lose money on their consoles.
 
  • Like
Reactions: GHG

John Wick

Member
And yet, GPU prices have crashed. SSDs prices have crashed. RAM too. Why are consoles different?

Dont believe these liars. They both have their own agendas. You dont go from making profit in June of 2021 to losing money so much you have to raise price by $50. And for MS to be losing $200 two years after launch would be a bigger fuck up than Sony losing $200 on PS3s at launch. A console that broke even by year 2. So either Microsoft has created an even bigger fuck up than the PS3 or someone isnt being completely honest. Im gonna go with the latter because these consoles are using parts the PC industry uses. No fancy Cell like processors or expensive $250 blurays. Their APUs are made using the same 7nm tech AMD uses. MS's SSD is literally an off the shelve part. Same thing with their RAM.

Xbox One's BOM was $471. And that was with the kinect. Without the kinect, they were able to sell it for $400 and break even. For them to say that the Xbox Series X's BOM is $700 is nonsense.
Which GPU prices have crashed? Not the new ones but the old ones that Nvidia over manufactured and now need to get rid of. The reason for the price drops are more to do with less PC demands and overstock of components. This doesn't affect the console industry because even now both Sony and MS can't produce enough.
 

DenchDeckard

Moderated wildly
If what Phill says is true and this is true as well:


IXZXUxw.jpg

Is like Xbox doesn't even understand why they are failing.

This is the kind of thing that makes me realise how clueless everyone is on here.

A slide that where Sony said they expect to break even on the ps5 in June suddenly turns onto Sony have been turning a profit on the disk version of the ps5 since June 2021....all the while the cost of everything goes through the roof from manufacture to logistics costs.

We gonna have to see receipts that Sony isn't making some serious losses on the hardware. Why else would they have gone through multiple revisions and also raised the prices.

It's inevitable that MS put the console prices up after Xmas. This is them just prepping us to soften the blow.

At least the series X anyway.
 

analog_future

Resident Crybaby
Definitely explains why Series S|X (and PS5) are such tremendous values compared to their PC counterparts.

I mean, when these consoles launched, it cost nearly 3x the amount of money to build an equivalent PC.

Amazing values still, too.
 
Last edited:

ReBurn

Gold Member
Depends how you see that to be honest. Could be that they can't afford to raise prices due to the impact it would have on the demand.
Either way, it doesn't look like Xbox is going to fail simply because their console business works like the console business has worked since the beginning of the console business.

I'd be surprised if PS5 consoles are still profitable considering changes in inflation and currency conversion rates. Especially when you look at the hit Sony took to operating income for the last few quarters. It's clear that Sony couldn't afford to not raise prices, otherwise they wouldn't have.
 

ChorizoPicozo

Gold Member
Xbox can't be failing too badly if they aren't in a position where they are making people pay more for consoles. 🤷‍♂️
Is not even about the hardware itself.
I imagine a bunch of people in a meeting room:

"We have the most powerful console, the best ecosystem, the best value, we offer a competitive price point"

Why aren't we selling more?!!!!?!?!?!

Then the janitor who is cleaning the trash can, stops and says:

"Have you ever though about the content?"

The executives look at him, ignoring him and say..."it must be sony's anticompetitive practices".
 

ReBurn

Gold Member
Is not even about the hardware itself.
I imagine a bunch of people in a meeting room:

"We have the most powerful console, the best ecosystem, the best value, we offer a competitive price point"

Why aren't we selling more?!!!!?!?!?!

Then the janitor who is cleaning the trash can, stops and says:

"Have you ever though about the content?"

The executives look at him, ignoring him and say..."it must be sony's anticompetitive practices".
You do have a vivid imagination, no question.
 

SlimySnake

Flashless at the Golden Globes
Which GPU prices have crashed? Not the new ones but the old ones that Nvidia over manufactured and now need to get rid of. The reason for the price drops are more to do with less PC demands and overstock of components. This doesn't affect the console industry because even now both Sony and MS can't produce enough.
The 20 tflops 6800xt was just $550 last week. I posted a link in the PC thread.

The 13 tflops 6700xt was down to $350 on Sunday. The 10.7 tflops 6600xt was around $250 a couple of weeks ago.

The PCIE Gen 4 SSDs which launched for $250-300 last year have crashed to around a $100 this year. Hell, i picked one up for $150 earlier this year and that model is down to $100 already. I purchased a bunch of PC parts last year around August and they were expensive. They are all half off. Especially RAM and CPUs.

I really dont know what to say here. Consoles dont cost that much to make. MS isnt even using expensive SSDs like Sony is. $50 loss I can understand if you include distribution and shipment costs which have gone up but also come back down since the pandemic ended. Dont fall for these misleading statements. This man was just saying how gamepass was the future a few months ago and now, he's saying he maxed out the console userbase? What? Nothing about that interview makes sense. Just ask yourself, why would he still have a job if he was losing $200 per console (worse than the PS3 at this point in the gen), and was no longer able to sell gamepass to his console users?
 

DenchDeckard

Moderated wildly
Either way, it doesn't look like Xbox is going to fail simply because their console business works like the console business has worked since the beginning of the console business.

I'd be surprised if PS5 consoles are still profitable considering changes in inflation and currency conversion rates. Especially when you look at the hit Sony took to operating income for the last few quarters. It's clear that Sony couldn't afford to not raise prices, otherwise they wouldn't have.

Again, we have absolutely no evidence that Sony has ever posted a profit from a ps5 console sale....

....but here we are. The masses have been convinced. GG Sony.
 
Top Bottom