E3 2017: Microsoft Isn't Making Money On The $500 Xbox One X

"The hardware part of the console business is not the money-making part of the business."


Video game consoles are historically sold at a loss, with platform-holders making up the difference with game, accessory, and subscription sales. We've now learned more about the business side for the Xbox One X, and while the company isn't making on profit on the $500 console, it's not exactly clear if Microsoft is incurring a loss.

Asked by BusinessIndier if Microsoft makes any money from Xbox One X hardware sales, Spencer said, "No." Pressed to clarify if this means Microsoft is taking a loss on each unit sold, Spencer responded, "I didn't answer it that way," declining to share more details.

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"I don't want to get into all the numbers, but in aggregate you should think about the hardware part of the console business is not the money-making part of the business," Spencer said. "The money-making part is in selling games."

Another important element of this is that, over time, the price of components for any hardware come down, and this should be no different for the Xbox One X. This is to say, the economics of selling hardware, in this case Xbox One X, should get better for Microsoft over time.

You can get the full story here at BusinessInsider.

The Xbox One X launches on November 7, priced at $500. International pricing is £449, €499, CA$599, and AU$649. Regarding the price point, a number of analysts said this week that they believe $500 is too expensive.

GameSpot spoke with Microsoft this week about the console's $500 price point, and the company believes no other console out there is doing what Xbox One X does. For lots more on Xbox One X, check out GameSpot's breakdown of the Xbox One X specs in this video and our roundup of everything you need to know about the console.

You can see all of our E3 2017 coverage here.

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