A Microsoft official said the corporation is not making a profit on Xbox consoles. The statement was made yesterday in the Epic Games v Apple trial. The fact that the company does not make money on the consoles themselves has been known for many years, but now Microsoft has officially recognized this fact.
However, as said by a spokesman for the Microsoft corporation, this does not mean that the company does not make money on the Xbox consoles. According to him, the gaming industry is quite a successful and rapidly developing area for Microsoft. The console gaming industry has traditionally been based on a hardware subsidy design. Most console manufacturers sell consoles at a loss to attract new customers.
The money comes from the sale of games and subscriptions to online services. Typically, Microsoft and Sony support console the earliest in the console lifecycle, but segment costs decline over time. However, along with the reduction in production costs, there comes a drop in retail prices for consoles. For example, disassembling the Xbox One S showed that the cost of the parts used in the console is about $ 324, which is only $ 75 less than the starting price of a set-top box with a 2 TB drive at the inauguration of sales. But this does not include logistics, development and other expenses.
Sony and Microsoft have comparable sales models, but Nintendo is the exemption. According to documents provided by Microsoft in the Epic Games-Apple litigation, the company is confident that Nintendo is making good money selling the Switch consoles themselves.
The discussion on this issue has begun right now, because Apple says that since Epic does not agree with its commission on the App Store, that is, it should also not agree with the 30 per cent commission from Sony and Microsoft. As a result, many hours of debate began about how open platforms differ from closed ones. Microsoft says there is a huge difference between the two. This is why the Windows app store has a 12 per cent commission, while Xbox purchases have a 30 per cent commission. via theverge.