After the revelation on Xbox sales having always been at a loss, Microsoft wants to make a small update.
During the legal battle that rages between Apple and Epic Games, Microsoft has come to make certain revelations about the economy of the company. Indeed, Lori Wright had admitted that Microsoft had always sold its consoles at a loss, the cost of building them being astronomical compared to the selling price.
However, this news just didn’t mean that the company’s Xbox arm wasn’t making money. It’s quite the opposite. Indeed, if the consoles do not bring money to the company, there are a whole bunch of games and services which, them, bring in a lot. This not only makes up for the loss but also makes a nice profit.
A Microsoft spokesperson said that “ the console gaming industry has traditionally been a model of hardware subsidy. Game companies sell consoles at a loss to attract new customers. Profits are generated by sales of games and subscriptions to online services “. It’s exactly the same business model that Sony faces. This is why the two companies have been waging a war on exclusivity and the quality of services for several years.
However, it seems that Nintendo is not subject to the same dynamic when it comes to the hardware part of its business. Indeed, according to legal documents, Microsoft believes that the sale of consoles generates loss for Sony, but profit for Nintendo. This is not so surprising when you consider that Nintendo has just passed the milestone of 84 million Nintendo Switch sold since its launch.
