Microsoft has always sold Xbox consoles at a loss, an executive confirmed during the the on Wednesday, as previously reported by Business Insider. An Epic lawyer asked Microsoft’s VP of Xbox business development Lori Wright about profit margins the company makes on its consoles.
“We don’t; we sell the consoles at a loss,” she replied, before confirming that Microsoft has never earned a profit on console sales.
Microsoft has been making games consoles since the original Xbox in 2001, and it released thelast November.
It’s not an unusual strategy for companies to sell consoles at a loss — they typically act as a loss leader for sales of games, subscription services likeand accessories, especially at the beginning of a console generation when component costs are high. The cost of making consoles tends to drop over its lifespan, but companies cut the retail prices of their consoles as well.
Microsoft didn’t immediately respond to a request for comment.