Submitted by jtorry 632d ago | news

Xbox One could be sold for a profit at launch

Microsoft may make a "low margin" on the sale of Xbox One hardware at launch, the platform holder has revealed, stating that as with Xbox 360, it will continue to drive down price as the cost of manufacturing lowers.

"The strategy will continue which is that we're looking to be break even or low margin at worst on [Xbox One], and then we make money selling additional games, the Xbox LIVE service and other capabilities on top," said Microsoft's IEB CVP of marketing and strategy Yusuf Mehdi, speaking at yesterday's Citi Global Technology Conference.

"And as we can cost reduce our box as we've done with 360, we'll do that to continue to price reduce and get even more competitive with our offering." (Microsoft, Xbox One)

theWB27  +   632d ago
Strange. Sony stated they won't be losing much money at all when they launch. Micro says the same, or even a profit.

Nintendo has been selling at a loss since launch, just announced a price drop and now are losing even more money on each console sold.

What was going on at Nintendo that Sony and Micro could make these two much more feature rich, more powerful machines and still be in a better position to make a profit. Hhhmm....
Transporter47  +   632d ago
The Gamepad is what makes them sell it as a loss.
ArchangelMike  +   632d ago
Nintendo forcasted huge profitsd for the Wii U, thsat was based on projected sales. However nobody bought the console, and it became a loss.

Sony basically did away with their proprietary Cell chip, and could therefore significantly lower the cost of manufacture.

Microsoft, well get rid of the mandatory Kinect and you'll make much more in profits.
hakeem0996  +   632d ago
The PS3 wasn't profitable during 70% of it's life cycle .Odly enough Netflix and free PS3 with a purchase of a Sony Tv promos are the main reason the console became profitable because a lot of people bought the PS3 as a streaming device and bought a few games too. That's y most of my friends got one . It's nice that Sony will finally make some money this time.
#1.2.1 (Edited 632d ago ) | Agree(7) | Disagree(13) | Report
UnholyLight  +   631d ago

Funny all the downvotes. Due to the fact that at least the 70% number is true. Sony spent a long time in the hole with every PS3 manufactured they were taking a huge loss. Even at the $699 entry point they were losing money (due to the new technology and Blu Ray at the time)
DonFreezer  +   632d ago
What they say is meningless. If the ps4 is 40% more powerful ofcourse they are losing money but are trying to hide it.But since the rumours about the dgpu of the One seems kinda legit for Sony not losing money.
DoesUs  +   632d ago
The failings in your post would baffle even the greatest of minds.
Deadpoolio  +   632d ago
LOL There is NO DGPU...None, your that stupid that your stretching now...If there was it would be more than $500 bucks.....

And lets go with the obvious FACT. Even IF there was an NDA it's non disclosure not non develop, so NO they aren't just keeping it a secret from developers
B-radical  +   632d ago
id laugh if you were right tho
MeatyMuscle   632d ago | Spam
YNWA96  +   632d ago
Well, I doubt the greatest of minds would ever be on this site...
corvusmd  +   632d ago
Actually most estimates put Sony making $25 profit per console at launch
Nitrowolf2  +   632d ago
"Most estimates"
"Links to Patcher"

This Guy
#1.4.1 (Edited 632d ago ) | Agree(2) | Disagree(1) | Report
Eonjay  +   632d ago
Several cost projections put the manufacturing cost at $400... They also factor in branding, customer service and advertising cost into the price of their console. By every estimation, a Kinectless Xbox would be at least $100 cheaper. If they are really that persistent about including it, they must really believe that they can make people want one as well. The profits will be slim, but they do have at least $50 or breathing room with each sale. Sony has about $100 to $125 in breathing room.
edonus  +   632d ago
See thats the trick... its not about making people want a kinect because its already there. They need to make people want a Xbox One. You do that by the games and services.

I dont even know where you are getting these breathing room numbers. I actually think the MS is making the wiser choice between the 2. If you look at the parts in the Xbox One they will drop in price faster than the Ps4. The thing is the Gddr5 memory. Gddr5 memory is a specific piece of hardware for a specific job. Its uses arent goingto change. You are not about to see computers changing their design to use graphics memory as general purpose memory so it will stay relatively expensive. Everything else will lower in price steadily over time.

I would expect in 4-5 years the X1 actually being slightly cheaper than Ps4 or the pressure from MS keeping the Ps4s profits at bay keeping up with the price cuts.
iamnsuperman  +   632d ago
R@D. This is Nintendo's first HD console so they are new to the whole process. Then add the tablet onto that and it is going to cost. Microsoft and Sony need this profit break generation (going HD cost a lot of money last generation). Nintendo are in that costing generation. Sony and Microsoft have that experience that Nintendo is only just getting
#1.6 (Edited 632d ago ) | Agree(2) | Disagree(1) | Report | Reply
theWB27  +   632d ago
I really don't know about Sony...but I do know Micro has been making a profit off of 360 hardware sales for quite awhile now...coupled with the Live earnings they're pretty.

I do know they'd be sitting even prettier had it not been for the RROD.

Just checked and Sony's been making money off of the PS3 since 2010.

I do agree about the HD transition. I remember it being hard on the devs too.
imdaboss1  +   632d ago
lol xbone going to crap out on everybody on launch day..ms keep on doing changes trying to compete with the ps4..
HolyDuck  +   632d ago
Wow, you're really smart.

Microsoft are competing with Sony, who'd of thought that?
black0o  +   632d ago
they went after the most common parts on the planet "PC" with only a little tweaks
PSjesus  +   632d ago
if PS4 399$and Sony selling it for profit
Xbone inferior hardware more bulky 499$.... more than 100$ profit good job M$
DarkHeroZX  +   632d ago
X1 profitable? DGPU my ass.
Flames76  +   631d ago
Sorry but sony has already confirmed that they will be losing money on each PS4 sold for the first couple of years.It will join the 5 billion loss the PS3 has takin and the 2 billion the PS Vita has taken.Xbox One will be making a tiny profit day one just as the article says.Xbox division has made billions in profit since september 2007 unlike the billion the Playstation division has lost his gen
TheKingWilliamV  +   632d ago
Simply can't wait to own my X1 and play some Dead Rising 3 :-)
FanboyKillerwitFacts   632d ago | Trolling | show | Replies(3)
andrewsqual  +   632d ago
Especially when people pick up that headset adapter and play and charge kit for their controller and any extra controllers they want also. Its extra money they simply would not have made if they were bundled in with it for €500
King-Prodigy-X  +   632d ago
No it won't.
True_Samurai  +   632d ago
And how do you know? Are you an insider? Do you work at Microsoft? No? Well than your statement is invalid
aviator189  +   632d ago
I wouldn't mind him much.
Bolts  +   632d ago
If the Xbox One comes out tomorrow, I would totally buy it even if I already have a PS4 on order. I'm so sick of this gen.
PS4isKing_82  +   632d ago
You and me both. Nothing from 360/ps3 excites me anymore. I'm so ready for that next gen newness and excitement.
GTA V? Beyond two souls? Gran turismo 6? The last of us Story DLC? Dark Souls 2??

This gen isn't over yet, even if the ps4 is already here.
LetoAtreides82  +   631d ago
I'm feeling the same way. Yes I know there's still awesome games coming out for the PS3 but most of them will surely be ported to the PS4 anyways.
jay2  +   632d ago
Hint. Drop kinect, take £60-80 off it and make a profit.
matgrowcott  +   632d ago
Hint. They're already going to be making a profit.
imdaboss1  +   632d ago
lol u really believe their going to make a profit just like that sure buddy
matgrowcott  +   632d ago
Per unit? Sure, if they charge more per purchase than it costs to make. This article, the one you're commenting on, is actually about that very thing.
stuff  +   632d ago
If they drop Kinect then they are sure to loose money. A lot of R&D went into Kinect so they MUST sell it. Kinect is as much a part of the Xbone as the disc drive.
The Meerkat  +   632d ago
They could always steal more underpants.
Sarobi  +   632d ago
I only have a few pairs left.. so I'm very much against this idea.
pandaboy  +   632d ago
you disgust me
DoesUs  +   632d ago
Release date announcement today.
Chrisgamerguy  +   632d ago
I want both consoles by next year but I can only afford the ps4 at launch
5eriously  +   632d ago
So the eXBone are overpriced already. M$! the masters of cunning marketing and financial extortion!
True_Samurai  +   632d ago
You wanna know something that are totally over priced? Sony products. Tvs etc.
gnothe1  +   632d ago
trueninja....you are so right...back in the day when you bought sony products you paid a higher price for higher quality.. but now their behind the 8 ball but still wants to charge premium prices.especially on the tvs..sony tv sets are behind LG, Sharp an Samsung in quality but above them in price...smdh...
Bolts  +   632d ago
We're going on a tangent here but that's an excellent point. The days where the Sony brand could command a premium are long gone. Now Samsung completely out price and out innovate them. Yet the prices on their TVs are still high.
stuff  +   632d ago
Not justifying the price, but Sony does make the two best gaming tv's as far as input lag is concerned. I'm going with a Panasonic plasma for this next gen however.
qu1ckset  +   632d ago
Samsung and Sharp are at the top of the game for LED tv's imo!

I bought a brand new 60" 120hz LED tv for my preordered PS4!
bromtown  +   632d ago
Yeah, really saddens me to see a brand which was a byword for quality reduced to supermarket grade. I've had a Bravia for a few years and it is excellent but the models that have replaced it have been getting gradually worse.
stuff  +   632d ago
Who dares to disagree with me?


strifeblade  +   632d ago
Actually sony make excellent tvs- their edge led hx850 is the highest rated for pq quality and their fully array led hx900+ series are also very expensive but highest pq quality in its class. Sony sucks in terms of smart features however when compared to lg and samsung- sharp also sucks in smart features as well.

Samsung use to have the I am so cheap compared to sony but not anymore- their tvs are just as highly priced since they got real popular. But to comment on samsung they are known for their ultra sharp hd images which gives the pq a crytal clear look.

Sharp are solid nothing outstanding but solid- good tvs for the money when buying 60 inch+- thats what they are known for- with good black levels in mid range models.

LG are differnt than sharp sony and samsung and manufacture ips led rather than samsung/sony/sharp variant of spva, gamers love lg ips led computer monitors. Their tvs are solid and their smart tv features are just as good as samsungs. The lower model ranges for lg tend to suck compared to the competition in pq- but i would only recommend lg 7000 series+, very solid.

Finally panasonic are known for their amazing plasmas for the money as well as high end models with high end quality- their led tvs lineup sucks- they manufacture ips panels and are of low grade (Toshiba is guilty of this as well- stick to lg for ips.

Yeah i know too much about tvs but for those of you wondering about tvs- this is am excelellent sum of brands in general.

Fyi if you go plasma remember the whites are not that great- not important for movies but for videogames it is since many games use pure whites- leds are very strong in the department and high end leds with local dimming take care of the black levels that plasmas excel in.
Phoenix76  +   632d ago
I personally wouldn't believe a word that comes out of Microsofts mouths these days. All the PR turn arounds, misinformation and poor value products of the last few years has lost them a lifelong customer.
5eriously  +   632d ago
M$ Reps, Fans and Devs get paid to lie for M$. After all it's all atypical American.
medman  +   632d ago
As George Costanza once said, "It's not a lie, if you believe it." Microsoft is taking those words to heart. These jokers just can't help themselves anymore. They must be including the marketing budget in their calculations on "breaking even". They will make considerable profit on every xbone sold. Stop the nonsense already. They think consumers are dumb enough to believe that the console with the cheaper ram is more expensive to produce when your direct competitor is offering better ram and better hardware specs for a considerable amount less, camera be damned? They really do take consumers for schmucks (and for granted) over there at Microsoft. Wake up folks.
#13 (Edited 632d ago ) | Agree(4) | Disagree(3) | Report | Reply
Belking  +   632d ago
Dude, you know nothing about what it takes or how much it takes to produce these things. so stop with BS. People will buy what they want regardless. So stop trying to convince people and save your energy for other things.
Vip3r  +   632d ago
Yeah, if GAME sells the day one edition for £615.
stage88  +   631d ago
I should hope so at that price.
LetoAtreides82  +   631d ago
Article says they could break even or make a low profit margin, it doesn't say they definitely would be making a profit on each console.

Now if they got rid of the Kinect I could see them making a definite profit on each Xbox One unit sold.
assdan  +   631d ago
no surprise, MS is selling weaker box than sony with a $100 higher price tag. And they've stated they'll turn a small profit or barely lose anything.
Locknuts  +   631d ago
Makes more financial sense than losing money. Current gen was a financial joke for a long time. I'm amazed that shareholders even allowed Sony and Msoft to release more consoles.

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