I quoted @Zaphod by accident. It was directed specifically to @eastmenThese are not good discussion posts:
A question was asked. Platform-biased beliefs have no value in an answer.
Not wild assumptions but shared ideas from people who don't know to people who don't know. That's just normal discussion. If the interest is only in a super-informed answer, a general discussion board like this is no use and the OP should ask suitable accounting experts on Stack Exchange or something.
This shouldn't be viewed as Sony versus MS with some sort of winner, but a mystery, like a murder mystery. Everyone contributing should be happy to share their theories, have them criticised, and be open to alternative theories. If we're lucky, we'll find an answer that everyone likes. More likely we'll share contrasting theories without any real understanding of the truth until we get bored of the conversation and move on.
So the two real questions
1) Is there really a $100+ physical loss on each console sold?
2a) If so, what accounts for that?
2b) If not, how does the accounting work?
Regards 2b, the suggestion R&D cost is spread across a flat prediction of units sold means there'll never be a time when the console is not loss-leading. That's contrasted with XBOne where it was announced the consoles would be break even break a profit:
At $500, Microsoft Says The Xbox One Will Break Even Or Make A Profit
After months of policy reversals from Microsoft, there's only one major difference between the Xbox One and the PS4 at this point, the price differential, and the subsequent reason for the price differential. The PS4 retails at $399 while the Xbox One is $499, and comes with the Kinect sensor, [...]www.forbes.com
Of course, the statements culd be using different numbers in different contexts. Contrasting with Yusuf Mehdi telling us XBO would be proiftable and XB360 was very proftable, we have Lori Wright saying MS has never made a profit on any console hardware sold. I think that's one for the lawyers to argue over!
Microsoft is reportedly subsidizing $100-200 per Xbox while Sony started breaking even more than a year ago, help me understand
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I quoted @Zaphod by accident.
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Ha! I thought it was the other way around. The BOM difference isn't $100 and I can see more of a reason to subsidise the console you want to be cheaper.
Microsoft loses up to $200 on each Xbox console sold
Microsoft loses up to $200 on each Xbox console it sells.
www.eurogamer.net
Interestingly the news appear now on Eurogamer and just as @DSoup said, it also suggests that the $200 subsidy is on Series S
cheapchips
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With the $x00* loss on Series S it's even clearer why we didn't get 12Gb of ram and a few more CU's (Which would have been nice for 'securing' res reduced Series X performance & OneX back compat)
*edit due to ambiguity. Could be $100, could be $200! Think the point still stands!
*edit due to ambiguity. Could be $100, could be $200! Think the point still stands!
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Have no idea. Unsure if its an assumption or if there was a clarification behind the scenesHow can anyone say its the Series S (or the Series X) with certainty? Was there some background audio during the interview that I simply didn't hear?
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I would ignore the Eurogamer article. It refers to an interview with CNBC, whereas the interview was with WSJ but initially reported on by CNBC - a week ago. It they can't get the basic facts right, I'd question their technical/cost analysis too.
Gaming journalism at it's finest.
Yeah, EG is nothing special these days. Follows the same copycat story reporting as everyone else, only a week late and with less info.
if they told me this some months or a year ago, I wouldn't believe it. But nowadays..., prices have changed. A hint of this is how Sony had to increase PS5 price, how a 2TB NVMe I purchased the other day did cost 156€ and it costs now 165€. Also a TV I purchased a few months ago, is now priced at more than 1100€....
I would ignore the Eurogamer article. It refers to an interview with CNBC, whereas the interview was with WSJ but initially reported on by CNBC - a week ago. It they can't get the basic facts right, I'd question their technical/cost analysis too.
Gaming journalism at it's finest.
But don't point that out in their article comments box, you'll get shadow banned (like me)
Well probability, on French market seem that Black Friday target is around 230€ for distributors (Carrefour, Corra, Leclerc, Auchan, etc..).Microsoft loses up to $200 on each Xbox console sold
Microsoft loses up to $200 on each Xbox console it sells.
Interestingly the news appear now on Eurogamer and just as @DSoup said, it also suggests that the $200 subsidy is on Series S
Same offers for EU, UK, US?
When Sony did that on PS3, they lost all their profits from the previous two PS generations. How much profit does an XBSS generate in its lifetime?
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Nobody knows because apart from Phil Spencer's recent reveal, there has zero visibility on the profitability of the Xbox business since the 360, which declined to drop reporting hardware sales numbers last generation. Whether Xbox make enough on software sales, accessories or subscriptions to make up losses is unknowable.
Sony's profits from software and accessories is quite lucrative, and you would expect the same to be true for Microsoft. Sony's real cash cow was selling memory cards during the first two PlayStation eras. They were around 50p (UK currency) to manufacture and sold for £30.
Never knew that. Every PS2 had at least 1 memory card sold! Multiply that huge profit by 158 million. Impressive!
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