Xbox Series X and S are not profitable for Microsoft. Phil Spencer revealed that the company loses between $100 and $200 on every console sold. Sales of games and accessories such as controllers therefore help to offset these losses.
Video game consoles represent substantial investments for players, but also for manufacturers. Not only is Microsoft not making money selling the Xbox Series X and S, it’s also losing money. Phil Spencer, the head of Xbox, has himself confirmed that Microsoft is currently losing between 100 and 200 dollars on each console sold.
Only a few days ago, we learned that all prices of Xbox Series X, S, Game Pass and accessories are likely to increase. Phil Spencer said that Microsoft will have to increase the prices of certain products, but did not specify which ones. There won’t be a holiday increase, but the Xbox Series X and S may soon cost more.
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Microsoft loses up to $200 on every Xbox Series S sold for $299
During an interview granted to CNBC, Phil Spencer returned to the situation of Xbox in relation to the slowdown in the growth of the world economy. With inflation accelerating and hitting new highs, Xbox isn’t doing as well as it used to. Phil Spencer thus confirmed that Microsoft is currently losing $100 for every Xbox Series X sold.
Even more amazing, Microsoft loses up to $200 on every Xbox Series S sale which is less expensive. It is recalled that the Xbox Series X costs 499 dollars and that the Xbox Series S is sold at 299 dollars. Microsoft’s losses are therefore particularly significant. They are obviously compensated by sales of video games and accessories, but that probably won’t be enough in the long run. Xbox Series console sales continue to surge with nearly half of Series S buyers new to the ecosystem. That’s good news for Xbox’s popularity, but it doesn’t stop Microsoft from losing money on every unit sold.
This is the reason why Microsoft will have to increase the prices of certain Xbox products. Phil Spencer hasn’t directly confirmed the console price increase, but he still expects the games will soon be sold more expensive. For the moment, nothing has yet been officially announced.