The real money, Spencer argues, is in the software.
The Xbox One X may be priced $499, which many, including I, have argued is a high price (if a fair one)- however, it looks like Microsoft may still be losing money, even at that price. Speaking to Business Insider, Xbox Head Phil Spencer said that Microsoft is not making any money on the Xbox One X’s hardware, though he declined to clarify whether that meant they were taking a hit with each unit sold, either.
“I don’t want to get into all the numbers, but in aggregate you should think about the hardware part of the console business is not the money-making part of the business. The money-making part is in selling games,” he went on, speaking about how for Microsoft, the money in gaming hardly lies in hardware sales anymore.
Given just how powerful the Xbox One X is, how loaded with sophisticated technology it is, and how it has been engineered into such a small size, there is no doubt that it is indeed an expensive bit of kit, and one that justifies its price- it’s just unfortunate that that price may be too high for the intended market.