Whenever new consoles launch, there’s always the impression that manufacturers are making millions off of consumers. However, that’s not the case for the Xbox One X. According to Phil Spencer, the company isn’t making anything. From what it looks like, they’re just breaking even or taking a loss. Spencer revealed all of this during an interview with Business Insider. When asked whether Microsoft was making a profit, Spencer said, “No.” When asked if they were losing money, Spencer said, “I didn’t answer it that way…I don’t want to get into all the numbers, but in aggregate you should think about the hardware part of the console business is not the money-making part of the business. The money-making part is in selling games.”
At least initially, consoles don’t make a lot of money if any. If you take into account the components, the price easily goes past the $400 mark. This doesn’t even take into account the price of the liquid cooling system as well as labor costs. Since the Xbox One X reveal, many have accused Microsoft of making a killing on Xbox One X by charging customers “more than $399”. It’s great that we finally have an answer. Hopefully there will be great trade-in offers so that the cost isn’t that much to gamers. I personally plan on trading in my existing Xbox One with Kinect, PlayStation 4, Wii U, Wii, Xbox 360 and PlayStation 3 to cover the cost. Hopefully GameStop will offer me a decent price so my out-of-pocket expense is around $250. Though, considering that it’s GameStop, I should probably start praying for a miracle.