How much money did Microsoft actually lose on each Xbox they sold in order to gain a foothold in the market?

Microsoft Gaming CEO Phil Spencer

Phil Spencer

Phil Spencer is an American business executive and the CEO of Microsoft Gaming. He is currently the head of the Xbox brand and leads the global creative and engineering teams responsible for gaming at Microsoft.

https://en.wikipedia.org › Phil_Spencer_(business_executive)

Phil Spencer (business executive) - Wikipedia

claims the company is losing money for every console sold. In a new interview with CNBC, Microsoft Gaming CEO Phil Spencer has claimed the company is losing around US $100-200 for every Xbox Series X and Series S console sold.

How much does Microsoft lose on each Xbox?

According to Microsoft Gaming CEO Phil Spencer, Microsoft loses as much as $200 on every Xbox it sells. According to CNBC's writeup of a recent WSJ Tech Live event, Spencer disclosed that Microsoft subsidizes the production cost of a new Xbox by about $100 to $200 per console.

Does Microsoft lose money on Xbox console?

During the WSJ Tech Live event, Spencer revealed that each Xbox console that is sold nets a loss of up to $200 per console. Spencer went on to describe consoles as a business model. "Consoles evolved to a business model much different from phones where consoles are actually sold at a loss in the market," said Spencer.

Did the original Xbox lose money?

Microsoft lost $5 billion to $7 billion on the original Xbox, launched in 2001. And it made billions of dollars on the Xbox 360. Depending on the time frame in which you look at it, it was either an insane waste of money or the finest strategic decision that Microsoft ever made.

How much money did Microsoft make off of the original Xbox?

The company's first video game console came together in just 20 months from conception to launch. It earned Microsoft a precious toehold in the living room, selling 1.5 million units in its first season. It sold three games for every box and generated $750 million in revenue.

Microsoft Loses A TON Of Money Each Xbox Console Sold

How much did Microsoft lose on the first Xbox?

“The original Xbox lost somewhere between $5 billion and $7 billion, depending on how you do the cost accounting,” Bach said.

Has Xbox turned a profit?

Xbox is just one of Microsoft's many internal divisions. Microsoft as a whole brought in $50.1 billion during the quarter for revenue (+11%), and the company posted a profit of $17.6 billion (-14%).

Are consoles sold at a loss?

Of course, console manufacturers often sell consoles at a loss - with the usual exception of Nintendo. It's a widely accepted business practice to then recoup money elsewhere, such as from software sales (where platform holders take a cut) and subscriptions, such as Xbox Games Pass.

Was the original Xbox a success?

By July 2004, the system had sold 15.5 million units worldwide—10.1 million in North America, 3.9 million in Europe, and 1.5 million in Asia-Pacific—and had a 33% market share in the US. Despite strong sales in North America, Microsoft struggled to make a profit from the Xbox due to its high manufacturing cost.

Does Sony lose money on PS5?

Sony confirmed it currently loses money on PS5 sales "resulting from strategic price points for PS5 hardware that were set lower than manufacturing costs." Aren Tai and 1,578 others like this.

Why is Xbox $1,000?

Why is the new Xbox $1,000? Roughly around $1,000 USD. The Xbox Series Xs being sold at resale prices are believed to be from resellers taking advantage of Amazon's supply chain issues that have become a major issue since the start of the pandemic.

Will Microsoft replace a stolen Xbox?

The warranty does not cover theft so you would not be covered for a replacement unfortunately.

Will Microsoft quit Xbox?

The company will only produce its current-gen Xbox Series S/X consoles now. “To focus on production of Xbox Series X / S, we stopped production for all Xbox One consoles by the end of 2020,” Cindy Walker, senior director of Xbox console product marketing, said The Verge.

Is Xbox losing money on Series S?

Xbox boss Phil Spencer has admitted that Microsoft continues to suffer a substantial loss on every Xbox Series X and Series S sold. That's in contrast to Sony, which no longer makes a loss on the PS5.

Does Microsoft lose money with Gamepass?

Games that launch on Game Pass see a decline in base sales for twelve months.

Do Sony and Microsoft lose money on consoles?

Xbox and PlayStation are two big rivals. They have something in common you might not know about; Sony and Microsoft don't earn profit with console sales. This might sound weird if we consider that those consoles are selling for millions worldwide, and they've priced for hundreds of dollars.

What did Bill Gates think of Xbox?

At a 2000 meeting since dubbed the 'Valentine's Day Massacre', Microsoft co-founder Bill Gates branded the Xbox an “insult” and was close to blocking its launch. Bill Gates is undoubtedly a successful man.

Is Xbox more powerful than PS2?

The Xbox and PS2 were direct competitors, but Microsoft's console was technically more powerful. These games just couldn't cut it on PS2. Despite the PS2 being far and away the most popular console of its generation, it was actually the weaker hardware when compared to the GameCube and Xbox.

What was the worst selling console?

Atari 5200

The console sold only a little over a million units.

Was PS4 sold at a loss?

The PS4 was sold at a loss on day 1. Its total build cost was $381, but the additional costs involved such as retailer margin etc... pushed the total cost for Sony over $399. Took a few months for them to make a profit on that price.

Is the PS5 a loss?

Sony's $499 PlayStation 5 console is no longer selling at a loss. Bloomberg reports that Sony chief financial officer Hiroki Totoki shared the news just a week after the company announced it had sold 10 million PS5 consoles.

How much money is Xbox losing?

Microsoft Gaming CEO Phil Spencer claims the company is losing money for every console sold. In a new interview with CNBC, Microsoft Gaming CEO Phil Spencer has claimed the company is losing around US $100-200 for every Xbox Series X and Series S console sold.

Is PlayStation more profitable than Xbox?

Per a roundup from Tweak Town, PlayStation soared above Xbox in 2022, earning $8.8 billion more in its games division.

How much does an Xbox actually cost to make?

The Xbox One costs Microsoft $471 to build, according to a hardware teardown and analysis by research firm IHS. IHS also cracked open the PlayStation 4 to find that Sony spends $381 building its latest home console.