Microsoft Will Not Make Money From Xbox One X Sales Despite $499 Price Tag
Microsoft unveiled the Xbox One X at E3 2017 with a $499 price tag that will apparently not lead to profits for the company.
While the debate on whether or not the Xbox One X is really worth $499 continues, Xbox head Phil Spencer revealed that Microsoft will not be making money for the Xbox One X units that will be sold.
Xbox One X Not Sold At Profit
In an interview with Business Insider, Spencer revealed that, despite the $499 price tag, Microsoft will not be making money for each purchased unit of the console.
Spencer, however, refused to admit that Microsoft is selling each Xbox One X at a loss, clouding the profit margin that the company expects from what is described as "the world's most powerful console."
According to Spencer, Microsoft's mindset is that the hardware component of the video game console business is not that part that will make money for companies.
"The money-making part is in selling games," he said, showing that Microsoft will rely on titles to drive up its profit from the Xbox One X.
It should also be noted that the price of the components used in manufacturing hardware eventually comes down, which means that the manufacturing cost of the Xbox One X should decrease after a while. Microsoft could soon be making money from Xbox One X sales, but how long that will take is currently unclear.
The fact that Microsoft is not making a profit on the Xbox One X now, however, could not be considered surprising at all. The impressive video game console is considered as the most powerful one in the world for a reason, and it takes top-of-the-line components for it to make such a claim.
The Xbox One X is powered by a six-teraflop Polaris GPU which is 1.4 times better compared to its rival, Sony's PlayStation 4 Pro. The console also supports 4K games, which is currently at the top edge of video game technology.
Xbox One X Price Too Steep?
The $499 price of the Xbox One X makes it the most expensive current-generation console in the market, with some gamers claiming that the price is too steep.
At that price, the Xbox One X does not come with any accessories or any games. The console is expensive simply because it is powerful, even when compared to the PlayStation 4 Pro.
In addition to a more powerful GPU, the Xbox One X offers higher bandwidth compared to the PlayStation 4 Pro. Microsoft's new console also comes with 12 GB of RAM, compared to only 8 GB for Sony's premium device.
The price tag of $499 is actually right on the money for many analysts, as the price is what many predicted for the Xbox One X. The question, however, is whether gamers will be willing to pay that price, especially considering the lack of exclusives for the Xbox One compared to the PlayStation 4.
For Microsoft, which will not be making any money off of each Xbox One X sold, it is hoping that the power of the console is enough to attract more players into the Xbox platform.