Microsoft comes to let players know after a statement from Phil Spencer that the manufacturer is losing money during certain sales. Explanation in details.
During the online event WSJ Tech Live, which was devoted to the future in terms of gaming for Microsoft, the PGG of the Gaming branch, the invincible Phil Spencer explained that the company lost up to 200 dollars for each Xbox sold. A rather impressive number.
Microsoft is losing money with its Xbox consoles
If we knew that Microsoft could, like John Hammond, spend lavishly, we now have a clear figure on this subject. Microsoft subsidizes the cost of producing a new Xbox by around $100 to $200 per console. The man also wanted to clarify his thoughts to GameSpot.
Consoles as a business model, within the overall framework of gaming, are quite small compared to where people play. Consoles have evolved into a very different business model from phones where consoles are actually sold at a loss in the marketplace. So when someone goes and buys an Xbox from their local retailer, we subsidize that purchase between one hundred and two hundred dollars, with the expectation that we’ll recoup that investment over time through accessory sales and the storefront.
It is therefore no longer an open secret, Xbox mainly earns money thanks to accessories and especially thanks to games and services. We have known for some time that consoles are loss leaders and it must be the same with PlayStation.
Only Nintendo seems to be selling its Switch not at a loss but at a profit. A rare example in the environment which can also be explained by the certain poverty in terms of equipment. Even if Microsoft loses money on each Xbox sold, the American company can still pop the champagne with incredible financial results.