Microsoft loses up to $200 for every Xbox Series X|S unit sold
While it is common for companies to subsidize their consoles and recoup losses by selling software and accessories, Microsoft appears to have taken quite radical measures with the Xbox Series X|S. According to CNBC, Phil Spencer, head of the Xbox division, revealed that the company loses between $100 and $200 for every recent device that is sold.
The report also states that the company hopes to offset this value with other products, such as games, additional controllers and subscriptions, which bring a better profit margin. However, CNBC was unable to inform which value is associated with each console model, nor if there is a forecast of a future adjustment in the amount of subsidies.
The great value provided by Microsoft helps explain why it is so difficult to match the price of a modern console with a PC with similar characteristics. The situation has already generated public comments from several developers: Katsuhiro Harada, producer of Tekken, said that the balance between hardware and performance of modern consoles surprises even those who are computer enthusiasts.
Although Microsoft a few years ago stopped releasing accurate data on the performance of the Xbox division, it ensures that its business is being profitable. Among the main factors helping the company in this regard is the Game Pass subscription system, which has seen great growth in the PC segment.
However, Phil Spencer admits that the platform is not immune to market pressures and may have to appeal to price increases in the future. While the company has resisted making Xbox value readjustments, issues like rising supply line costs and rising global inflation could leave it with no choice but to go down that path pretty soon.
Despite the negative prospects, Microsoft has plenty of reason to celebrate when it comes to the performance of the console lineup. A report recently released by the company shows that, even with the challenges of the pandemic, it managed to generate the highest quarterly profit in all 20 years of Xbox existence.