by William D'Angelo , posted on 02 November 2021 / 8,884 Views
Xbox business development vice president Lori Wright as a third-party witness at the Epic Games v. Apple court case yesterday revealed that Microsoft has never earned any profit from Xbox hardware sales.
Wright was asked how much margin Microsoft earns on Xbox consoles and responded by saying, "we don't. We sell the consoles at a loss." She was later asked by Microsoft has ever earned profit on the sale of an Xbox console and responded, "no."
A Microsoft spokesperson has released a statement to The Verge saying that the Xbox division is profitable and is a high-growth business for the company.
"The gaming business is a profitable and high-growth business for Microsoft," said the Microsoft spokesperson. "The console gaming business is traditionally a hardware subsidy model. Game companies sell consoles at a loss to attract new customers. Profits are generated in game sales and online service subscriptions."
Senior video games industry analyst at Niko Partners Daniel Ahmad yesterday said that selling consoles at a loss "isn't too unusual" and the loss is recouped with first-party game sales, subscription services, and the cut it takes from third-party games and DLC.
Someleaked court documents from the Epic Games v. Apple court case include aninternal Xbox reviewofThe Last of Us Part IIthat was done by the Xbox Portfolio Team, thatDead Island 2andSaints Row 5will beexclusive to the Epic Games Store, how much Sony wasagainst adding cross-platform playto multiplatform games on the PlayStation 4, and Epic paying Two-Two Interactive$146 millionto have the PC version ofBorderlands 3launch as a timed exclusive on the Epic Game Store.
A life-long and avid gamer,William D'Angelowas first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his ownYouTube channelandTwitch channeldedicated to gaming Let's Plays and tutorials. You can contact the author atwdangelo@vgchartz.comor on Twitter@TrunksWD.
More Articles
9 Comments
This was probably their worst moment in Xbox history financially and it likely wasn't that bad considering even Nintendo only had negligible losses at their worst point in the Wii generation. Fees for online and revenue share for third parties make consoles highly profitable even if a Console doesn't sell 15+ Million Consoles per Year.
SanAndreasX VAMatt (on 09 May 2021)
You would be surprised. Microsoft has made a lot of absolutely disastrous business deals like Skype and Nokia that would have sunk other companies. Microsoft stayed in the Xbox business and hemorrhaged money on it for years because they feared that the PlayStation would start taking market share away from Windows for home consumers.
Random_Matt (on 06 May 2021)
The guy was on about hardware losses, never said the division wasn't making money. MS need to chill, no need for PR retaliation.
Alistair Random_Matt (on 07 May 2021)
dramatic much? it wasn't retaliation, it was clarification
AJNShelton Random_Matt (on 07 May 2021)
Yeah but the title is actually misleading, he didn't say Xbox division is profitable either, he said "the gaming business is"
smroadkill15 AJNShelton (on 07 May 2021)
They are one in the same. I know you are on this mission to say Xbox isn't profitable, but it is.
drkohler (on 07 May 2021)
That thing is called
Microsoft Gaming Division
There is no thing called XBox Division .XBox Hardware and Software is a piece of the cake, and the cake has always had so many slices. It is impossible to really figure out how the XBox group has really been performing as we simply do not have the numbers.
\
\
";element.innerHTML = x;return;} $(document).ready(function() {//vgc-spoiler is custom element created by markdown ||string||customTag("vgc-spoiler", spoilerTag);if (window.matchMedia("(min-width: 610px)").matches) {$("body").on("mouseenter", ".comment_entry_div", function() { $(".collapse_post_link", this).show();$(".report_post_link", this).show();event.stopPropagation(); });$("body").on("mouseleave", ".comment_entry_div", function() { $(".collapse_post_link", this).hide();$(".report_post_link", this).hide();event.stopPropagation(); });} $(".dropdown-option a").click(function() {var text="Sort by " + $(this).data("text") + "";var order=$(this).data("order");var sort=$(this).data("sort"); $(".sort-dropdown").html(text);$(".dropdown-option a").removeClass("selected");$(this).addClass("selected");//$(".comments_building").show();$(".comment_div").remove();$("#global_comments_wrap .comments_building").toggleClass("active");$.ajax({type: "post",url: "https://www.vgchartz.com/assets/handlers/comments_handler.php",data: ({"action": "sort_comments","region": "news","resource":"448650", "group_id":"448650","theme": "Array","this_userid": "","hide_deleted": "","order": order,"sort": sort}),success: function(data) {$("#new_comments_448650").replaceWith(data); customTag("vgc-spoiler", spoilerTag); //implement any spoilers}});}); $("body").on("mouseenter", ".replyto_link", function() {var replyto_userid = $(this).data("replyto_userid");var position= $(this).position();var replyto_left= (position.left + 20) + "px";var replyto_top= (position.top - 20) + "px";var comment_id= $(this).data("comment_id");var replyto_id= replyto_userid + "_" + comment_id;var replyto_card= $("#replyto_user_card_" + replyto_id).html();$(this).addClass("is_active");if (typeof replyto_card == "undefined") {//if we do not have a profile card, go get itvar replyto_username = $(this).data("replyto_username");var replyto_useravatar = $(this).data("replyto_useravatar");var replyto_comment= $("#comment_entry_" + comment_id).text();replyto_comment= truncateText(replyto_comment, 25);if ($("#comment_entry_" + comment_id).find("vgc-spoiler").length) replyto_comment = "[Comment contains spoiler]";$.ajax({type: "post",url: "https://www.vgchartz.com/assets/handlers/comments_handler.php",data: ({"action": "user_card","replyto_userid":replyto_userid,"replyto_username":replyto_username, "replyto_useravatar":replyto_useravatar,"replyto_comment": replyto_comment,"replyto_id": replyto_id}),success: function(data) {$("#global_comments_wrap").append(data);if ($(".replyto_link:hover").length > 0) { //$(".context-card").fadeOut("fast"); //if ($(this).hasClass("is_active")) {$("#replyto_user_card_" + replyto_id).css("left", replyto_left);$("#replyto_user_card_" + replyto_id).css("top", replyto_top);$("#replyto_user_card_" + replyto_id).fadeIn("fast");$("#replyto_user_card_" + replyto_id).css("display", "inline-block"); }}});}else { if ($(".replyto_link").hasClass("is_active")) {$("#replyto_user_card_" + replyto_id).css("left", replyto_left);$("#replyto_user_card_" + replyto_id).css("top", replyto_top);$("#replyto_user_card_" + replyto_id).fadeIn("fast");$("#replyto_user_card_" + replyto_id).css("display", "inline-block"); }}});$("body").on("mouseleave", ".replyto_link", function() {var replyto_userid = $(this).data("replyto_userid");var comment_id= $(this).data("comment_id");var replyto_id= replyto_userid + "_" + comment_id;var replyto_card= $("#replyto_user_card_" + replyto_id).html();$(this).removeClass("is_active");if (typeof replyto_card !== "undefined") {if ($("#replyto_user_card_" + replyto_id + ":hover").length == 0) { $("#replyto_user_card_" + replyto_id).fadeOut("fast");}}else $("#replyto_user_card_" + replyto_id).fadeOut("fast");});$("body").on("click", ".replyto_link", function() {var comment_id= $(this).data("comment_id");var element = document.getElementById("comment_link_" + comment_id);var elementPosition = $(".mainOutsideContainer").scrollTop() + element.getBoundingClientRect().top;var headerOffset = 210;var offsetPosition = elementPosition - headerOffset;$(".comment_link").removeClass("target");$("#comment_link_" + comment_id).addClass("target"); $(".mainOutsideContainer").get(0).scrollTo({ top: offsetPosition, behavior: "smooth" });});$("body").on("mouseleave", ".context-card", function() {if ($(".replyto_link:hover").length == 0) { $(this).fadeOut("fast");}});$("body").on("click", ".collapse_post_link", function() {var comment_id=$(this).data("comment_id");if($(this).hasClass("fa-minus-square-o")) {$(this).removeClass("fa-minus-square-o");$(this).addClass("fa-plus-square-o");$(this).attr("title", "Expand");$("#comment_text_wrap_" + comment_id).fadeToggle();$("#reply_controls_" + comment_id).toggle();$("#add_reply_wrap_" + comment_id).hide();} else {$(this).removeClass("fa-plus-square-o");$(this).addClass("fa-minus-square-o");$(this).attr("title", "Collapse");$("#reply_controls_" + comment_id).toggle();$("#comment_text_wrap_" + comment_id).fadeToggle();}//$("#comment_replies_" + comment_id).toggle();$("#comment_" + comment_id + " > .global_replies_wrap").fadeToggle();return false; });$(".mainOutsideContainer").scroll(function(event){if ($(".context-card:hover").length == 0) { $(".context-card").fadeOut("fast");}});var hash = $(location).attr("hash");var comment_id = hash.substring(1);var group = $(' i[data-comment_id="'+comment_id+'"] ');group.each(function(i, obj) {console.log("i:" + i);if($(this).hasClass("collapse_post_link")){$(this).parent().parent().parent().css("background","yellow");if($(this).hasClass("fa-minus-square-o")) {$(this).removeClass("fa-minus-square-o");$(this).addClass("fa-plus-square-o");$(this).attr("title", "Expand");$("#comment_text_wrap_" + comment_id).fadeToggle();$("#reply_controls_" + comment_id).toggle();$("#add_reply_wrap_" + comment_id).hide();} else {$(this).removeClass("fa-plus-square-o");$(this).addClass("fa-minus-square-o");$(this).attr("title", "Collapse");$("#reply_controls_" + comment_id).toggle();$("#comment_text_wrap_" + comment_id).fadeToggle();}$("#comment_" + comment_id + " > .global_replies_wrap").fadeToggle();return false;}});});
