Xbox Consoles Have Always Been Sold at a Loss, Never Made a Profit, Says Microsoft

They make money on services.

Posted By | On 06th, May. 2021

xbox logo

Most consoles are sold at a loss (well, unless you’re Nintendo). That’s a pretty well-known fact. However, as the systems age and hardware production becomes easier and less costly, most console hardware eventually becomes profitable. Apparently, that has never happened for any of Microsoft’s consoles.

This new comes courtesy of the ongoing Epic v. Apple antitrust trial, and was first reported by Protocol. As part of a direct examination by Epic counsel Wes Earnhardt, Lori Wright, the head of business development at Xbox, was asked outright if Xbox hardware sales were profitable. “How much margin does Microsoft earn on the sale on the Xbox consoles?” Earnhardt asked.

“We don’t. We sell the consoles at a loss,” Wright responded. When asked why, Wright responded that Microsoft subsidizes it with game sales and subscription services, which are profitable. Microsoft’s goal is to serve as an “end-to-end consumer experience.” When asked if Microsoft has ever earned a profit from the sale of Xbox hardware, Wright said no.

This really isn’t surprising. Console sales are generally viewed as a way to lock a customer into an ecosystem and make money from their purchases over time. Still, it’s interesting to see a high up person at Microsoft say it out loud.


Tagged With: ,

Amazing Articles You Might Want To Check Out!

Share Your Thoughts Below  (Always follow our comments policy!)



Keep On Reading!

No Man’s Sky: Orbital Update is Live With Space Station Overhaul, Ship Salvaging, and More

No Man’s Sky: Orbital Update is Live With Space Station Overhaul, Ship Salvaging, and More

New Fleet Missions allow players to defend their frigates when attacked, and guild affiliations have been made...

Marvel Rivals Announced – 6v6 PvP Shooter Receives PC Alpha Test in May

Marvel Rivals Announced – 6v6 PvP Shooter Receives PC Alpha Test in May

Playable characters include Spider-Man, Hulk, Magneto, Iron Man and many more, with Team-Up Skills and destruc...

PS5 Pro “Won’t Grow the Market”, Some Developers Don’t Understand “the Point of It” – Report

PS5 Pro “Won’t Grow the Market”, Some Developers Don’t Understand “the Point of It” – Report

"Developers didn’t feel they needed it, at least the ones I spoke to," says GamesIndustry.biz founder Christ...

Metal Gear Solid Master Collection Vol. 1 Update Adds Pause Menu to Metal Gear Solid 2 on PC

Metal Gear Solid Master Collection Vol. 1 Update Adds Pause Menu to Metal Gear Solid 2 on PC

Metal Gear Solid 3 on Steam also gets an Additional Settings menu with audio and screen options, mouse sensiti...

Stellar Blade – Combat, Cinematics, and Bosses Revealed in New Demo Gameplay

Stellar Blade – Combat, Cinematics, and Bosses Revealed in New Demo Gameplay

The demo goes live on March 29th for PS5 and features the opening sections. Progress carries over into the ful...

Microsoft Gaming CEO Discusses Potentially Having Epic Games Store and Other Storefronts on Xbox

Microsoft Gaming CEO Discusses Potentially Having Epic Games Store and Other Storefronts on Xbox

"Nobody would blink twice if I said, ‘Hey when you’re using a PC, you get to decide the type of experience...