Xbox One per unit (Console) price.

For those who like a challenge, and are savvy enough to search out a matter. 

Is Microsoft making money for each Console sold, or losing money?

If they are losing money, then how much exactly? And more importantly...

How are they making up the cost and still making a profit?

 

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Last updated July 4, 2018 Views 25 Applies to:

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As an Xbox One owner and Xbox Gold subscriber, MS's profits have no affect on me or my gaming.... if they lose on one end, they gain on another. The Xbox brand is a very small of MS as a whole.

Well that's good to hear vas, but it's not an answer to any of the questions I am asking.

Now, while this is an open forum, and anyone can post. I would like to have others besides myself searching out these questions and posting their findings. For 1 badge toting user claims one thing while another claims yet another. So I would like to simply know which is correct. And if it is the one I am thinking. Then how is MS recouping such loses? It can't be the games alone.  

They are definitely losing money on each console. So is Sony. But on purpose.

The goal isn't to sell consoles per se but to get the console into people's homes.

From there, Microsoft believes that the Entertainment and Services On Demand business model takes over. That's where the money is made.

^ But from where, and for what is that money coming from?

Xbox One costs 471$ to make.  They are losing money with each console sale.  It can not be refuted.  However, Xbox as a brand has several other factors that help keep them in the "green".  And even then they are not always in the green.

There last quarterly reveal showed that Xbox Live service for Xbox 360 alone brought in tons of revenue.

Minecraft merchandise also helps no doubt.  Seeing as it is the 3rd best selling game of all time.  

I could build a PC with similar specs fairly cheap.  You know MS is getting bulk discount on parts.  It would be much cheaper on me per unit if I was building a PC near these specs if I purchased bulk.  So I would say just on the console they are doing fine.  Of course you then have the other costs outside of the console itself that add to it.

Saying that I expect MS to drop price again.  They could and it would put them into more homes.  I think that will be the holiday push.  $50 off which puts them at $300.  As has been said they are pushing for their services to be front and center.  The best way to do that is to get into as many homes as possible.  So $300 for the fall with some sales hitting $250.  Make the money up on the back side with Live and other services.  

Hi-ya there Doc. Sure, that was what pops up 1st in my search. But that's nothing more than a guess.

So if it. "can not be refuted" then surely there is an Official pie chart somewhere which shows down to the penny, and more importantly. From where they are recouping their loses.

"Xbox One costs 471$ to make"

Wow.  I think I remember reading about that and that included the Kinect sensor as well.  Something like at least $75-$80 just for that.  I saw a couple estimates back in 2013 that showed something like $320 or $330 without Kinect and stuff.  But of course Kinect was bundled at the time.  And this was not taking into account how much of a discount you can get by purchasing very large quantity orders.  No way of knowing the exact deal MS made but I can guarantee it was for less than I could get because they are buying more.

Publishers have to pay a license fee to have their game on the console. Live Gold makes a shed load of money.

Isn't Nintendo the only one not to sell their consoles at a loss?

Doc is Right.

$471. But that was including a $75 Kinect.

Here's a breakdown in a Teardown of the One and PS4 by IHS Technology.

technology.ihs.com/.../microsoft-xbox-one-hardware-cost-comes-in-below-retail-price-ihs-teardown-reveals

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