According to a Microsoft official on Wednesday during the Epic Games vs. Apple trial, Microsoft does not make any profit on the sale of Xbox consoles alone.
Asked what profit Microsoft makes from its Xbox console by Epic counsel, Lori Wright, Microsoft’s vice president of Xbox business development, responded that “not us; we sell the console at a loss.”
However, this does not mean that the company does not make any money from its console business. A Microsoft spokesman said the console gaming business traditionally operates on a hardware subsidy model in a statement to The Verge just hours after yesterday’s testimony.
The spokesman said that the gaming industry is profitable and growing rapidly. Therefore, Microsoft sells consoles at a disadvantage to attract new customers and generate profits through game sales and online service subscriptions.
While it is a known fact that gaming consoles are usually launched at a disadvantage and eventually become profitable, it is still surprising that Microsoft has never achieved hardware profitability for its Xbox and software, service And is dependent on a combination of subsidiary sales.
In addition, Microsoft is also skeptical of following this business model, while Sony’s PS4 is expected to eventually be profitable and the Switch was also quickly launched by Nintendo to be profitable.