If you look at the prices of consoles on the market and think that Sony or Microsoft make big money from these devices, we are sure that this statement from Microsoft will surprise you as well.
When a new game console was first released, it was known that it was sold at a certain loss. However, as hardware revisions and mass production increase, costs decrease and the console eventually becomes profitable. At least that’s what we know. But according to Microsoft, an Xbox console has never managed to sell for profit.
Xbox business development VP Lori Wright was a third-party witness in the case between Apple and Epic. Epic’s attorney, Wes Earnhardt, asked Wright: “How much does Microsoft make when selling Xbox consoles?” Wright answered that they never made a profit from the sale of an Xbox console. This means that Microsoft has never made a profit on hardware sales from the original Xbox, Xbox 360, Xbox One, and Xbox Series X and Series S.
It is known that the reason game consoles are a profitable business area is because of sales of software, services, and accessories. However, it would not be wrong to foresee a certain profit from console sales. Microsoft, for its one, says it has never achieved hardware profitability. Analyst Daniel Ahmad says the PS4 ultimately became profitable for Sony, and Nintendo developed the Switch to be profitable quickly. That’s why it seems interesting that Microsoft has not been able to move to this stage of profitability.
Microsoft is also unlikely to replace this with Xbox Series X and Series S. Because the ongoing shortage of chip production worldwide does not reflect very positively on costs.