is Microsoft losing or gaining money on the xbox one?

#31HENTAIDOJIPosted 5/6/2014 2:00:08 PM(edited)
NinjaGamer_23 posted...
Since the system been out for almost 6 months, is this console giving Microsoft money or making them lose money for each console made?


Sold at a profit pre-day 1.

We don't know the exact divide, but it seems the Xbox Division as a singular entity is making ridiculous cash hand over fist.

http://www.gamefaqs.com/boards/691088-xbox-one/69109985

Has MS even recouped the losses from the OG Xbox?

About 3 months away. Xbox 360 has been cutting into it since January 2012, it'll be gone next quarter.
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#32krillensPosted 5/6/2014 2:01:40 PM
HENTAIDOJI posted...
http://www.gamefaqs.com/boards/691088-xbox-one/69109985


lol. did you even read that thread? that isn't the "xbox division" you sad, sad sad tool
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#33FinzFan4lifePosted 5/6/2014 2:57:18 PM
Sabram posted...
the $450 sale was active even on the MS store, so they certainly were losing money on every console sold through there if indeed it cost $471 in parts and assembly.

Also MS has to pay EA for every copy of Titanfall bundled, since even with the $450 sale over the $500 bundle is still around, which means the game is free for consumers, but EA still wants their money from it. I believe the Titanfall bundle also comes with a month of Live as well, so that's a small amount with each one sold..

Time for some maths Eh?

Let's say the Xbone costs $471 to produce, during the month of March about 311k Xbones were sold. so 311k x 471 = 146,481,000. which is the cost for just the system at $500 which leaves that $29 as profit. So then 500 x 311k = 155,500,000 - 146,481,000 = 9,019,000 for profits. This would be at $500 per system

But since the system was $450 for all of March basically, that adds an additional $21 cost per system that isn't recouped since that's under the estimated production cost. Add in again the month of live (valued at about $5) and the copies of Titanfall bundled in (assume MS had to pay EA about $25 per copy) Then you're looking at $51 that MS is paying out during March per unit. so you take that $51 x 311k = 15,861,000 subtract that from normal profit stated above and you get... -$6,842,000.

So with those numbers, which may or may not be accurate (I have no idea of knowing) MS would have lost nearly $7mil in march on the Xbone. Now since the sale is over and the system is back to $500 it's a much lower cost, but for each Titanfall bundle sold that's 30$ spent vs 29$ profit, so MS would lose $1 per Titanfall bundle. Right now honestly no one should be buying the stand-alone system, since it's the same price but without the free game.

This of course factors in none of the front-loaded expenses such as R&D or companion costs like marketing, the actual cost MS paid to EA to make the game exclusive, or other associated costs, like the controller for the Titanfall bundle would cost more to produce than the standard one, even if only marginally.

So right now MS is losing a good chunk of change on the system trying to promote it. It doesnt really seem to be paying off as well as they'd hoped either. Hopefully the new Xbox head can turn things around and make the system more appealing to more people, but who can say at this point? I have seen articles where he's hyping the crap out of E3 and saying great things are to come, but the corporate views of MS have lately not aligned with the consumer's views on what is great.

Time will tell.



Except all we know is the price of the deal part of that deal was likely to include it in a console sale so MS most likely already paid for them
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#34HENTAIDOJIPosted 5/6/2014 3:13:07 PM
krillens posted...
HENTAIDOJI posted...
http://www.gamefaqs.com/boards/691088-xbox-one/69109985


lol. did you even read that thread? that isn't the "xbox division" you sad, sad sad tool


Sadly for you it is the Xbox division.

And every buck is a salty tear in a papercut of your eyeball.
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#35orestes1981Posted 5/6/2014 5:19:21 PM
If they did not advertise the system, develop it, or do pretty much anything that designed the Xbox One=they would make a profit.

With all of the hardcore advertisements, they are in the red. Furthermore, they have to count all the R&D that designed the Xbox One. So, they have yet to make money on it. The sales for the Xbox One, and the pack-in is definitely not helping the bottom line either.
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#36slyman19Posted 5/6/2014 6:00:18 PM(edited)
In all honesty, no one knows for sure. It's possible they are profiting as they said they were going to break even or make a small profit. If they were correct and even factoring in the $450 sale price, they would make a profit off Xbox One when Xbox Live, accessories, games, media, licensing, ect is taken into account. Don't absolutely rely on breakdowns as they people doing it don't know the deals Microsoft has made and are simply guessing.
#37AsianMansBurdenPosted 5/6/2014 5:47:57 PM
Hard to say.
#38zinsindettaPosted 5/6/2014 5:53:58 PM
AwayFromHere posted...
Losing.


Don't all new systems lose early on?
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#39DonaIdSterIingPosted 5/6/2014 6:34:36 PM
Losing money based on recent ROI analysis. Doesn't help that they released a statement that they worried about the alarming rate of returned consoles from unhappy consumers.
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#40orestes1981Posted 5/6/2014 6:37:17 PM
slyman19 posted...
In all honesty, no one knows for sure. It's possible they are profiting as they said they were going to break even or make a small profit. If they were correct and even factoring in the $450 sale price, they would make a profit off Xbox One when Xbox Live, accessories, games, media, licensing, ect is taken into account. Don't absolutely rely on breakdowns as they people doing it don't know the deals Microsoft has made and are simply guessing.


So, the $450 was not a rush to get people to buy more Xbox Ones, but a strategic plan to get...more people to buy at a lower price?

Really, the was not designed to help make money short term. It was about them profiting in the long term because of XBL and people buying games.

Throwing in a free game and a price cut? They were definitely not making money after that. That is serious damage control to argue that a company makes more money after a price cut.
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