3 ms·
Microsoft takes a $100-$200 loss on all Xbox Series sales
- sbuccini 4y agoI wrote a post about the dynamics that play into console pricing and why Microsoft might have done this: https://www.stevenbuccini.com/console-wars https://www.stevenbuccini.com/console-wars
- 10g1k 4y agoIt's clever sales strategy: sell a weapon for $1, sell the ammunition for $1000.
- qeternity 4y agoMost commonly known as the razors and blades model.
- modshatereality 4y agoSlightly modified, since microsoft is the sole gatekeeper of which software can be run on their heavily subsidized (anti competitive) hardware.
- beardedscotsman 4y agoI remember seeing the COGS for Xbox One and it was the same as retail prices. There was no profit from COGS and then you have shipping and associated costs to get the consoles out. So there is an inherent loss. it’s likely too that advertising comes under this cost per unit too. Xbox games take 10 to 15 USD per title sold, so there is a big push for games to sell. Xbox 360 had the highest at the time games sold at console sale it was like 2.5 or 3.5 games per console sold and I think that is likely still a record. Consoles take time to make a profit, but subscription models with multiplayer really help. Honestly I think this is how it should remain, at least with lowering the cost of entry to home consoles vs desktop computers.
- 312c 4y agoHasn't this been how Xbox has operated for 2 decades now?
- partiallypro 4y agoOr every console until it reaches a certain maturity.
- musicale 4y agoExcept for Switch. By this metric (vs. component and manufacturing cost) PS5 (both models) became profitable less than a year after launch. Of course Apple's gaming devices (iPhone, Apple TV, etc.) are always profitable.
- Kukumber 4y agoSelling products at a loss should be illegal, it's an anti-competitive practice In fact, it is illegal, at least in some European countries, as usual, why is it ok for Microsoft? https://europa.eu/youreurope/business/selling-in-eu/competition-between-businesses/index_en.htm https://europa.eu/youreurope/business/selling-in-eu/competit...
- askiiart 4y agoThere's also laws like that in the US, and in most places. However, it seems this is being overlooked because it's not really for the purpose of creating a monopoly, as everyone is doing this, as it's actually just to get consumers' feet in the door to the ecosystem/platform.
- Kukumber 4y ago3 console maker: Microsoft, Sony, Nintendo Nintendo doesn't sell the switch at a loss [1] Sony no longer sell the PS5 at a loss, (sold at a loss for 9months) [2] Microsoft still selling at a loss is anti-competitive, since they are able to sell their console cheaper than the competition, they are a billion dollar company btw Another example is the Steam Deck, sold at a loss, as a result, competition can no longer compete, read about "Deck vs GPD" [1] - https://venturebeat.com/games/nintendo-wont-sell-switch-at-a-loss-plans-to-ship-2-million-units-in-march/ https://venturebeat.com/games/nintendo-wont-sell-switch-at-a... [2] - https://www.gamesradar.com/ps5-is-no-longer-selling-at-a-loss/ https://www.gamesradar.com/ps5-is-no-longer-selling-at-a-los...
- yeneek 4y agoIt's just how this market works. https://www.forbes.com/sites/paultassi/2021/02/03/ps5-is-being-sold-at-a-loss-yet-sony-is-posting-record-profits/?sh=546992dd5fd2 https://www.forbes.com/sites/paultassi/2021/02/03/ps5-is-bei...
- Kukumber 4y agoSony is no longer selling the PS5 at a loss [1], they sold at a loss for just 9 months [1] - https://www.gamesradar.com/ps5-is-no-longer-selling-at-a-loss/ https://www.gamesradar.com/ps5-is-no-longer-selling-at-a-los...