Xbox One to Break-Even or Make Profit on Each Sale from Launch
September 6, 2013 9:14 AM
comment(s) - last by
Microsoft's Yusuf Mehdi
The Xbox 360 will also get another three years of support
A Microsoft executive said that each sale of the upcoming Xbox One console will break-even or be sold at profit from
its launch date
According to Microsoft's Yusuf Mehdi, the company plans to make money on selling games for the console and the Xbox Live subscription (which, he noted, has grown to 48 million members now).
"The strategy will continue which is that we're looking to be break even or low margin at worst on [Xbox One]," said Mehdi. "And then make money selling additional games, the Xbox Live service and other capabilities on top. 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."
Mehdi, who spoke at the Citi Global Technology Conference this week, also said that Microsoft plans to support the Xbox 360 for another three years. The company plans to release over another 100 games for the console.
"You've seen us over the years constantly be focused on profitability and improving year over year," said Mehdi. "There are different points in the cycle when you invest in new hardware. If you look at 360, that platform lasted for seven to eight years and it's going to go for another three years. It's incredibly profitable now in the tail.
"Some of these things take some time in the launch year in which you invest, and then they they play out over time. We're going to continue to invest in Xbox 360, and the two devices can work in concert. So it's not like the day we ship Xbox One your 360 won't work. We'll continue to support it."
Microsoft recently announced that the Xbox One will officially launch November 22
in 13 markets
, including Australia, Austria, Brazil, Canada, France, Germany, Ireland, Italy, Mexico, New Zealand, Spain, UK, and USA. It will make its way to other markets in 2014.
Games Industry International
This article is over a month old, voting and posting comments is disabled
its the numbers
9/6/2013 11:46:29 AM
i am betting that there is some number fiddling happening here instead of the true value by real numbers. definitely the R&D cost is written off as something else or will be accounted elsewhere.
fyi - those who are claiming that this is a mid-range pc for $500 and so it should break/make money, you really need to take into consideration the R&D cost that was put into such a hardware and software. It isn't simply off-the-shelf parts.
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