06 May 2021 9:09 AM +00:00

Microsoft Confirms That It Has Never Made A Profit From An Xbox Console Sale

As part of the ongoing Epic Games vs Apple trial, Microsoft has confirmed all Xbox consoles are sold at a loss.

Microsoft's Lori Wright, Xbox business development vice president revealed that the company has never made a profit on the sale of an Xbox console.

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Microsoft Confirms That It Has Never Made A Profit From An Xbox Console Sale

Epic's lawyer Wes Earnhardt asked Wright “how much margin does Microsoft earn on the sale on the Xbox consoles?”

Her response was "we don't. We sell the consoles at a loss", according to Protocol.

She then confirmed that Microsoft had never earned a profit on the sale of a console.

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This has long been somewhat common knowledge within the games industry, but it's interesting to hear Microsoft confirm it.

The idea is that selling hardware gets users "in the door", and that costs are recouped through software and, in today's landscape, services like Game Pass.

“Hardware being unprofitable certainly played a bigger role in the late 90’s and early 2000’s (oh and PS3 era lol),” industry analyst Daniel Ahmad of Niko Partners tweeted.

“Both the PS5 and Series X/S are being sold at a loss right now, but will become profitable down the line most likely.

“The PS4 was probably the first Sony console to flip the above concept somewhat,” Ahmad noted.

“While Sony aggressively cut the price of PS2, for example, down to $99, the PS4 maintained a $299 price point for multiple years and was profitable.”

Here's everything we know, thanks to the ongoing trial:

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