Microsoft Admits That Xbox Consoles Are Sold at a Loss

In a court hearing, Microsoft’s Lori Wright said the company has never earned a profit from Xbox consoles.

Tech 
31,423 Hypes 10 Comments

Microsoft‘s VP of Xbox business development, Lori Wright, said in a sworn testimony on Wednesday that the tech giant knowingly sells Xbox consoles at a loss.

Adi Robertson, a senior reporter at The Verge, was live tweeting from the Apple v. Epic Games trial, a lawsuit brought about by Epic Games challenging Apple over its hold on in-app game purchases. According to Robertson, Wright was asked whether Microsoft makes a profit from selling Xbox consoles.

“No,” she responded.

The lawyer also asked Wright why Microsoft continues to sell Xbox consoles at a loss, to which she explained that the company’s business model is optimized for an “end to end consumer experience” that makes money from other sales and subscriptions.

A spokesperson from Microsoft told HYPEBEAST that the company has millions of monthly active users and Xbox Game Pass subscribers that offset their losses.

“With more than 23 game studios creating games, more than 100 million monthly active Xbox players, and more than 18 million Xbox Game Pass subscribers across console, mobile, and PC, the Gaming business is a profitable and high-growth business for Microsoft,” the spokesperson explained. “The console gaming business is traditionally a hardware subsidy model. Game companies sell consoles at a loss to attract new customers. Profits are generated in game sales and online service subscriptions.”

Despite losses from Xbox consoles, it appears that Microsoft has had a profitable financial quarter. Last month, company released its results for the quarter that ended on March 31, noting revenue of $41.7 billion USD.

Read Full Article

What to Read Next

Microsoft Is Launching Cloud Gaming for Xbox Consoles
Gaming

Microsoft Is Launching Cloud Gaming for Xbox Consoles

So you can preview games without waiting for downloads.

Xbox Changes Game Box Art for Clearer Console Delineation
Gaming

Xbox Changes Game Box Art for Clearer Console Delineation

Small but effective changes.

Microsoft's Xbox Cloud Gaming Service Arrives on iOS, Mac and PC
Gaming

Microsoft's Xbox Cloud Gaming Service Arrives on iOS, Mac and PC

Upgraded to 1080p at up to 60 fps.


'Microsoft Flight Simulator' is coming to Xbox Series X|S and Xbox Game Pass
Gaming

'Microsoft Flight Simulator' is coming to Xbox Series X|S and Xbox Game Pass

Microsoft’s longest-running game franchise.

Jeff Staple Is Selling "METAPIGEON" Sneaker NFTs
Footwear

Jeff Staple Is Selling "METAPIGEON" Sneaker NFTs

In partnership with RTFKT Studios.

CAYL and New Balance Link Up for an Outdoor-Ready CRV ZIP and CRV SLIDE Capsule
Footwear

CAYL and New Balance Link Up for an Outdoor-Ready CRV ZIP and CRV SLIDE Capsule

Marking the South Korean label’s inaugural footwear collaboration.

New Balance's Made in the USA 992 Is Back in Black
Footwear

New Balance's Made in the USA 992 Is Back in Black

And equipped with reflective accents.

Dover Street Market and Sky High Farm Enlist 23 Artists To Help Combat Food Insecurity
Fashion

Dover Street Market and Sky High Farm Enlist 23 Artists To Help Combat Food Insecurity

Exclusive collaborations with visionaries including Jeff Koons, Takashi Murakami and Urs Fischer.

Curry Brand Announces the Release of the Curry 8 "Class-y"
Footwear

Curry Brand Announces the Release of the Curry 8 "Class-y"

Inspired by Sonya Curry’s lifelong commitment to being an educator and crafted in honor of Teacher Appreciation Week.


'A Quiet Place: Part II' Releases Final Trailer Ahead of Film's May 28 Release
Entertainment

'A Quiet Place: Part II' Releases Final Trailer Ahead of Film's May 28 Release

John Krasinski and Emily Blunt explain why the film was pushed back.

Reebok is Reviving the OG Pump Omni Zone II “White”
Footwear

Reebok is Reviving the OG Pump Omni Zone II “White”

Continuing the model’s 30th anniversary celebrations.

Air Jordan 1 Low Receives a "Lucky Green" Makeover
Footwear

Air Jordan 1 Low Receives a "Lucky Green" Makeover

Color-blocked with clean white uppers and black Swooshes.

Snapchat’s New Finance Game Allows Users To Practice Trading Virtual Stocks
Tech

Snapchat’s New Finance Game Allows Users To Practice Trading Virtual Stocks

StockStars hands players a $1 million USD virtual portfolio to manage.

Jimmy Gorecki's JSP and Vault by Vans Reunite for Chukka 79 "Roses Grown in Granite" Collaboration
Footwear

Jimmy Gorecki's JSP and Vault by Vans Reunite for Chukka 79 "Roses Grown in Granite" Collaboration

Inspired by Gorecki’s Philadelphia roots and the city’s skateboarding scene.

More ▾
 
Subscribe to our Newsletter

Gain access to exclusive interviews with industry creatives, think pieces, trend forecasts, guides and more.

By subscribing, you agree to our Terms of Use and Privacy Policy.

Adblock Detected.

We charge advertisers instead of our readers. If you enjoy our content, please add us to your adblocker's whitelist. We'd really appreciated it.