Xbox Series X | s but I still sold at a lossThat is, production and distribution costs exceed revenue from sales by a negative margin that fluctuates Between 100 and 200 dollarsin the words of Phil Spencer.
In an interview with The Wall Street Journal, Spencer talked about the difference between the business model of games on consoles and the one on smartphones, in which Microsoft wants to enter and compete with Apple and Google thanks to the acquisition of Activision Blizzard. By doing so, the head of the Xbox division revealed that the current generation of green consoles are selling at a loss of between $100 and $200.
“Consoles have evolved into a very different business model than phones, with consoles selling at a loss in the market,” Spencer said. “So when someone buys an Xbox from a retailer, we back that purchase with $100-$200, with the expectation that we’ll offset that investment over time by selling accessories and games.”
Consoles are launched into the market and sold at a loss for months, if not years, sure It’s not newbut we rarely hear about figures from official sources, albeit approximate in this case (we assume that the amount of losses depends on the market and, above all, on whether it is Xbox Series X or S).
Another interesting detail that emerges from Spencer’s words is that, unlike the PS5, the Xbox is sold at a loss. Nearly two years after its release. According to official data shared by Sony, the PS5 is no longer sold at a loss since the first half of 2021.
As Spencer explained, Microsoft’s strategy is to balance budgets with selling accessories, games, and services. However, this may not be enough, which is why Microsoft may increase the price of Xbox Series X | S and Game Pass in the future.
“We’ve kept the price of our console stable, and we’ve kept the price of games for our platforms and subscription going. I don’t think we’ll be able to do that forever,” Spencer said.
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