Microsoft exec: XBOX ONE focus is "very much on profitability"

#1SolnotPosted 9/9/2013 11:14:36 PM
http://www.geekwire.com/2013/microsoft-plans-turn-profit-xbox-start/

Microsoft has spent billions on its Xbox business over the years, and seen its share of red ink, but the company says it’s very focused on profitability for its upcoming Xbox One.

Speaking at the Citi Global Technology Conference, Xbox chief marketing officer Yusef Mehdi said he expects to “break even or be low margin at worse,” with the Xbox One hardware over time, and then make money on additional games, Xbox Live and other capabilities.

“The strategy will be the same as in the past,” he said. “As we can cost-reduce our box as we’ve done with the Xbox 360, we’ll do that [with the Xbox One] to continue to price-reduce and get even more competitive with our offering,” Mehdi said.

He made it clear that the focus for the Xbox One, which is priced at $499 for launch, is “very much on profitability.”

“If you look at the Xbox 360, that platform has lasted seven to eight years and will go on for another three years,” he explained. “It’s incredibly profitable now in the tail. Some of these things take time in the launch year in which you invest and then they play out a bit over time.”

Mehdi said that his team always has priced its products “super competitive” in terms of being close to break even or low margin in order to have broader distribution. For the Xbox One, he said, Microsoft made a couple “big bets.”

“We wanted something to really differentiate that lets you play games as if you’re playing movies and we wanted to break the barrier of being able to voice control your television,” Mehdi explained. “So to do that, we added a lot of capability. For $499, we think the value we provide for that is a very good deal. We feel that we’ve done the right balance. And if you look either the pre-orders that we’ve been sold out for weeks, or do price-adjusted inflation on the 360, it’s actually pretty comparable.”
#2Decimator11Posted 9/9/2013 11:27:05 PM
That's good that they want to make a profit off of their product.
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#3gamefaqwatcherPosted 9/9/2013 11:43:44 PM
It's not like microsoft is a non-for profit organization lol.

Captain obvious would be face palming right now.
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#4FoppePosted 9/9/2013 11:49:12 PM
Solnot topic.
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#5HENTAIDOJIPosted 9/10/2013 12:56:01 AM
I wish MS would stop being so PC about it with long ass interviews and just be like gold teeth and pimp chains "holeeeee shreeed we making a crapload of money"
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#6DesperateMonkeyPosted 9/10/2013 1:53:52 AM
Yeah good luck with that.

Console #1 - loses $4 billion
Console #2 - loses $2.5 billion
Console #3 - profit?
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#7SabramPosted 9/10/2013 5:36:51 AM
DesperateMonkey posted...
Yeah good luck with that.

Console #1 - loses $4 billion
Console #2 - loses $2.5 billion
Console #3 - profit?


Don't forget, MS is nearly $3 billion in the red for the Xbone already, with having spent $1b on their advertising, $1b on R&D, and the rumored $1b on securing exclusives.

They'll be working for a long time to make that up, and that's if everything goes well and there isnt another RRoD fiasco, or the sales arent just abysmal.
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#8ElPolloDiablo87Posted 9/10/2013 5:39:19 AM
DesperateMonkey posted...
Yeah good luck with that.

Console #1 - loses $4 billion
Console #2 - loses $2.5 billion
Console #3 - profit?


You're wrong by the way. They made over a billion on 360.
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#9Sniper_BrosefPosted 9/10/2013 5:41:06 AM
ElPolloDiablo87 posted...
DesperateMonkey posted...
Yeah good luck with that.

Console #1 - loses $4 billion
Console #2 - loses $2.5 billion
Console #3 - profit?


You're wrong by the way. They made over a billion on 360.


I don't think that's right. Do you have a link? I remember them being in the red until the last three years.
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#10SaintSeiyaXPosted 9/10/2013 5:41:33 AM
Sabram posted...
DesperateMonkey posted...
Yeah good luck with that.

Console #1 - loses $4 billion
Console #2 - loses $2.5 billion
Console #3 - profit?


Don't forget, MS is nearly $3 billion in the red for the Xbone already, with having spent $1b on their advertising, $1b on R&D, and the rumored $1b on securing exclusives.

They'll be working for a long time to make that up, and that's if everything goes well and there isnt another RRoD fiasco, or the sales arent just abysmal.


If Sony can manage losing a boatload of money with the PS3 and all its other electronic devices, a much richer company like Microsoft definitely can.
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