Video game consoles are very expensive pieces of computer hardware packed in relatively small boxes and packaged with expensive controllers. So it’s not surprising to hear that Microsoft doesn’t make any money from selling Xbox consoles. In fact, it’s losing as much as $200 on every console sold these days.
Previously, Xbox boss and Microsoft gaming chief Phil Spencer said the company might still raise prices on “some things”. but not during this holiday season. While many suspected he was talking about Game Pass or Xbox Live, it’s also possible that Microsoft could increase the price of its budget console, the next-gen Xbox Series S. That seems even more likely now that Spencer has confirmed that the company is losing money on every console it sells.
In a recent interview with CNBC, Spencer spoke about how video games, and the Xbox brand in particular, are faring during the ongoing economic downturn. Rising prices and record inflation are put a pinch on many, as dollars don’t go as far as they used to. During the interview, Spencer confirmed that Microsoft loses around $100 every time it sells the $500 Xbox Series X. And it loses even more, up to $200 if it sells the smaller Xbox Series S for $300.
said Spencer CNBC that Microsoft expects customers to buy the subsidized consoles and then buy accessories and games to make up for the losses. While Spencer didn’t say anything about raising prices for the next-gen Xbox, he did CNBC that he doesn’t think Microsoft will be able to keep game prices constant forever. We’ve already seen the rise of the $70 game since the launch of the PS5 and Xbox Series X/S. Microsoft hasn’t released a $70 game yet, but it seems future releases like redfall
Of course, selling consoles at a loss isn’t a new practice. Microsoft itself told the court in Epic v. Apple that this was the case has never made a profit from the sale of any of its Xbox consoles. Allegedly so does Sony sold the PS3 at a loss of $240. The only real exception to all of this is Nintendo, as the company behind the Switch and Wii tends to monetize its consoles. Even if Nintendo’s profit is only $6 per Wii, that’s a lot better than losing hundreds of dollars per unit sold. Meanwhile, Sony increased the price of the PS5 in some parts of the world.