Microsoft Says It’s Losing Up To $200 For Every Xbox Sold

The Xbox is an expensive box. Even for Microsoft, who makes it. According to Phil Spencer, the head of the Xbox brand, the company makes a significant loss for every sale of a gaming console—and recent economic and supply-chain challenges haven’t helped things.

In an interview with CNBC, Spencer divulged that Microsoft takes about a US$100–200 hit every time a US$499 Xbox Series X or the budget US$299 Series S flies off a shelf.

So that it doesn’t hemorrhage money, the tech giant is counting on its faith that fans will top up the difference on Game Passes, video games, and accessories .

Spencer’s admission may be foreshadowing a bump in the prices of future Xbox models. A few days ago, he disclosed at the Wall Street Journal’s Tech Live Conference that Microsoft could eventually raise prices for Xbox offerings, just not during this holiday season. According to Kotaku, fans previously interpreted that Spencer had meant price hikes for Game Pass or Xbox Live, but his recent sharing points to a potential passing of costs over to customers for the core Xbox hardware.

During the CNBC interview, Spencer also said he didn’t see Microsoft retaining its game prices forever.

With that being said, it’s not uncommon for companies to make a loss from selling gaming consoles, which are expensive to produce, instead relying on auxiliary goods and services to cushion the costs. Microsoft itself testified to this as a third-party witness during the Epic v. Apple dispute, where Xbox vice president Lori Wright said, “We sell the consoles at a loss,” and revealed that the company has never turned a profit from the sale of an Xbox console.

[via Kotaku and CNBC, cover photo 206143588 © Decaale | Dreamstime.com]