Microsoft loses up to $200 on every Xbox sold

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Microsoft loses up to $200 on every Xbox sold

A few days ago, Phil Spencer, head of the Xbox division at Microsoft, signaled that the company is already studying the possibility of increasing the prices of its consoles and services in the future, as it is becoming increasingly unfeasible to hold prices as they are currently.

This week, Spencer revealed that each Xbox Series X|S generates a loss of up to US$ 200 (~R$ 1036) for the Redmond giant.

In a recent interview with CNBC, Phil Spencer talked about how the economy’s problems can affect the video game industry, causing Microsoft’s consoles to sell below production cost. While this difference is offset through the sale of accessories and services such as Xbox Cloud Gaming and Game Pass, this is certainly no small loss for the company.

While this “acceptable loss” is common practice in the video game industry, not just Microsoft’s consoles, it is uncommon for companies to disclose the amount of the loss on each console. In the interview, the executive says that each Series X, sold for US$ 499 in the US, generates a loss of US$ 100, while the Series S, sold at US$ 299, causes a greater loss, of US$ 200.

In the same interview, Spencer returned to talk about Microsoft’s plans to increase the value of the console in the future, despite not knowing when that will happen.

The most worrying part is that Microsoft has also failed to meet its Game Pass growth target for the second year in a row, which could cause the increases to be larger than expected by some users.

Do you think Sony is also taking a lot of losses from PS5 sales?

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Abraham
Expert tech and gaming writer, blending computer science expertise