Stephanie Nanelli
May 6, 2021 16:04 GMT
Apple’s antitrust trial revealed that Microsoft sold its Xbox console at a loss.
During the trial, when Xbox’s head of business development Lori Wright was brought to the booth, news about the news spread.
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Epic’s lawyers asked Wright, one of the witnesses in the trial, whether the Xbox hardware was profitable for the company.
“How much profit does Microsoft make by selling this product on the Xbox console?” Epic lawyer Wes Earnhardt asked.
Wright said through the agreement: “We don’t do this. We sell game consoles at a loss.”
When asked if the company has ever profited from the sale of game consoles, Wright said “no.”
Wright believes that selling game consoles at a loss can be offset by game sales and subscription services.
Game consoles sold at a loss are nothing new. According to industry analyst Daniel Ahmad. The host company recoups its hardware investment through first-party game sales and services, as well as revenue from third-party games and DLC.
Ahmed said that in the late 1990s and early 2000s, unprofitable hardware was basically comparable to the course. And now, both PS5 and Xbox Series X/S are selling at a loss.
According to court documents and edited information, Microsoft earned approximately $1 billion or more in profits from its software and services in 2019. In comparison, Sony (Sony) is $4.1 billion and Nintendo (Nintendo) is $2.3 billion. According to documents released by Ahmed, Microsoft reported a loss of US$1.7 billion in hardware, but an overall profit of US$2.3 billion.
Both the PS5 and X/S series are now sold at a loss, but they are likely to be profitable. Nintendo became “a certain degree of outline” because of the profitability of its hardware.
The trial between Epic and Apple has produced a lot of information, and more news is likely to come out of it throughout the litigation process.
