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Microsoft Never Makes A Profit on Xbox Hardware Sales

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Xbox is one of the biggest companies in the video game industry and has been around for years. However, it looks as though the company never makes a profit off of actually selling Xbox consoles.

The news comes as a result of the ongoing Epic Games vs Apple court case. The Epic Games vs Apple trial has already been disrupted by fans, and its questioning of industry executives has led to the release of a lot of information that normally wouldn't be seen by the public. The court case has revealed emails between Xbox and Epic Games, for example, as well as some of the planned crossovers and concerts for Fortnite.

One recent bit of information comes as a consequence of Xbox vice president Lori Wright being called to testify in the case. While being questioned by Epic Games' lawyer Wes Earnhardt, Wright was asked what margin the company makes on its console sales. Wright said Xbox sells its consoles at a loss, and when asked why, Wright said the manufacturer focuses on delivering a gaming experience to more players, allowing the company to profit off of subscription services like the popular Xbox Game Pass and digital sales.

The line of questioning came from Epic in an effort to show that video game consoles have good reason to take a 30 percent cut of digital game sales, as that is their primary revenue source. It wants to show this to argue that Apple should not do likewise through its App Store, as it makes a profit on the sale of iOS devices too. However, the news is not all that surprising, as video game hardware is typically sold at a loss to get it into more players' hands. Some companies, such as Nintendo, do their best to make a profit off hardware, but it seems that Xbox is more than fine continuing to sell at a loss.

Xbox's stated focus on services like Xbox Game Pass to make a profit does make sense. Xbox has invested heavily into bringing more and bigger titles to Xbox Game Pass frequently, and it reportedly wants to bring Xbox Game Pass to other consoles. Whether or not that happens remains to be seen, but it will be interesting to see what other information comes out of the court case. It is expected to run for two weeks, so there is plenty of time left for more interesting news.

Source: Protocol


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Source:  gamerant.com

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