Microsoft loses up to $200 on every Xbox console sold

Head of Xbox Phil Spencer continues to make interesting statements. First, we were assured of “lifetime support for Call of Duty on PlayStation” and now he admitted to CNBC interview that Microsoft is selling Xbox consoles well below cost.

So, according to him, the company loses $100 on every $499 Xbox Series X console sold, and as much as $200 on the more affordable Series S ($299). In the console business, this is a fairly common practice — in the past, manufacturers have repeatedly traded “iron” at a loss, instead making money on games and various services. However, now such a statement by Phil Spencer may mean something else, namely, a possible price increase.

A few days ago, during the conference of The Wall Street Journal Tech Live, he already managed to warn that it is difficult for the company to keep the prices at the same level: “We’ve held price on our console, we’ve held price on games… and our subscription. I don’t think we’ll be able to do that forever. I do think at some point we’ll have to raise some prices on certain things”

PS: It is interesting that when in August Sony announced PlayStation 5 price hike due to high inflation, Phil Spencer said Microsoft won’t do that and commented on the actions of competitors as follows: “now, when our customers are facing the greatest economic difficulties and uncertainty than ever, we believe that it is wrong to do so.”