AfterDawn: News

Microsoft making tiny profit on Xbox One hardware sales

According to research firm IHS, Microsoft, just like its rival Sony and its Playstation 4, is making a very tiny profit on each unit sold of the new Xbox One.

The Xbox One, which costs $499 to consumers, costs $471 to build, not including R&D and advertising costs which could certainly add up to $20 or more per unit.



Sony, which sells its PS4 for $399, spends $381 to build the console.

Microsoft's added costs come mainly via the Kinect motion control sensor, which costs $75 and the AMD CPU/GPU at $110.

Both console makers lost significant money for their PS3 and Xbox 360 consoles, respectively, with Sony losing as much as $300 per unit for over a year. While they may not be making more than a few pennies this time around, the figures certainly seem better than a loss.

Written by: Andre Yoskowitz @ 26 Nov 2013 22:04

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• 4 comments

• dEwMe

  This would only be true if the manufacturers were getting 100% of the list price paid by consumers. I gotta assume they sell to a Best Buy or any other merchant for much less so they can get their cut of the sale. That said I bet they are both selling at a loss.
  

  Just my $0.02,
  
  dEwMe

  27.11.2013 08:41 #1

• A5J4DX

  that isnt good :o but its early days as well since its a new generation of consoles
  

  27.11.2013 16:19 #2

• Bozobub

  Either way, this is actually close to break-even than usual for a console at launch. Remember, the actual hardware is a loss-leader for SOFTWARE (and peripheral) sales.

  27.11.2013 16:39 #3

• FreqNasty

  They should have used the $75 that kinect cost, on the GPU/CPU instead. More 1080p/60fps
  

  29.11.2013 06:53 #4