Microsoft: Xbox One Won't Lose Money at Launch

[faefrost]

Wow? After 25 years Microsoft has surprisingly figured out how to sell a PC at a profit? Or almost at a profit? At least so that it isn't a loss this time? Wow! Once again I am boggled that dull pointless and ono f=damaging is about the best news announcement that MS can hope for regarding the Xbox 180 at this point. I mean really doesn't that mighty marketing cry just make you want to run out and buy one? "We're not losing money this time! Please Buy it!"

 

[Psychobabble]

So "We're looking to be break even or low margin at worst" is what's considered profitable these days. Well I guess the good part of setting your expectations that low means its hard to be dissapointed.

 

[Abomination]

Just because if you sell an item you're making a profit on the production cost doesn't mean that you'll make a profit if... you know... nobody buys it.

 

[Psychobabble]

Just because if you sell an item you're making a profit on the production cost doesn't mean that you'll make a profit if... you know... nobody buys it.

Very true, but I think they are talking about the last gen consoles where both the Xbox 360 and the PS3 were sold at a net loss so had to rely completely on game revenue to make the blasted things worth creating in the first place.

How is the Xbone any different if they only break even or sell it at a tiny loss? Well let me tell you .....er .....uhm ......uh .......... it ISN'T any different! My apologies for deliberately wasting your time.

 

[infohippie]

Yeah, but it's available almost nowhere, almost nobody wants it and there's a cheaper and better alternative.

There are multiple cheaper and better alternatives, both the PS4 and PC gaming.

 

[Ed130 The Vanguard]

I wonder what this consoles RRoD will look like?

Will it flash LEDs or just die?

Because this news makes me wonder.

 

[misg]

I don't see how this is bad news... What they are saying is that the tech is priced correctly to the cost of production. Apple makes 75% profit on some of it's phones. http://www.cultofmac.com/122497/apple-iphone-4s-best-feature-nearly-75-percent-profit-margin/
Do you see people complaining about that? Frankly you should be more worried about the PS4 as they are claiming to out deliver the Xbox1 for less money.

Losing money is motivation for management to make shortsighted decisions, or take short cuts,and if you don't think PS didn't do this just look at how little they spent on security on PS3 owners accounts and the debacle that was.

You will always pay in the end as the customer one way or another, speak up but realize that a company saying they are making money on selling something isn't a bad thing.

 

[Hazy992]

Well cheap doesn't necessarily mean shoddily made. I can go out now and buy a fully fledged AMD desktop processor for less than £100 and a pretty decent graphics card for around the same money, so it's going to be hell of a lot cheaper for Microsoft to buy processors and the like from AMD on a massive scale like that.

I think people have underestimated just how smart going to x86 for both Microsoft and Sony really was. I wouldn't write this off as a RROD 2.0 just yet.

 

[Hazy992]

Frankly you should be more worried about the PS4 as they are claiming to out deliver the Xbox1 for less money.

But bear in mind that Sony don't have to factor in the cost of the Kinect or anything like that. If the PS4 had included the PS Eye (or whatever it's called) it would have been closer to the price of the Xbox One.

The Kinect is more powerful than the Eye so the additional cost for the PS4's components would have been balanced out by that.

I still think Microsoft making a SKU without the Kinect then undercutting the PS4's price by $20-$30 would be a smart move.

 

[misg]

Frankly you should be more worried about the PS4 as they are claiming to out deliver the Xbox1 for less money.

But bear in mind that Sony don't have to factor in the cost of the Kinect or anything like that. If the PS4 had included the PS Eye (or whatever it's called) it would have been closer to the price of the Xbox One.

The Kinect is more powerful than the Eye so the additional cost for the PS4's components would have been balanced out by that.

I still think Microsoft making a SKU without the Kinect then undercutting the PS4's price by $20-$30 would be a smart move.

True and I agree if it was up to me I would of released a SKU without kinect as well.

That said the Kinect was always cheap to make, at it's launch, I remember it being said it was very profitable hardware for MS. Seeing how it's just two camaras and a mic although higher quality I don't think the addition of kinect adds $100 to the cost of the hardware. http://www.digitaltrends.com/computing/kinect-costs-only-56-to-make-149-99-to-own/ It's probably still around the $50 cost mark. With this assumption leaves the cost of the core xbox1 hardware pegged around $450. Still giving the impression that MS is xbox1's spending more on it's hardware that ps4. How this actually plays out will only be known after release. Still I think that this isn't a negative news release.

 

[Hazy992]

Frankly you should be more worried about the PS4 as they are claiming to out deliver the Xbox1 for less money.

But bear in mind that Sony don't have to factor in the cost of the Kinect or anything like that. If the PS4 had included the PS Eye (or whatever it's called) it would have been closer to the price of the Xbox One.

The Kinect is more powerful than the Eye so the additional cost for the PS4's components would have been balanced out by that.

I still think Microsoft making a SKU without the Kinect then undercutting the PS4's price by $20-$30 would be a smart move.

True and I agree if it was up to me I would of released a SKU without kinect as well.

That said the Kinect was always cheap to make, at it's launch, I remember it being said it was very profitable hardware for MS. Seeing how it's just two camaras and a mic although higher quality I don't think the addition of kinect adds $100 to the cost of the hardware. http://www.digitaltrends.com/computing/kinect-costs-only-56-to-make-149-99-to-own/ It's probably still around the $50 cost mark. With this assumption leaves the cost of the core xbox1 hardware pegged around $450. Still giving the impression that MS is xbox1's spending more on it's hardware that ps4. How this actually plays out will only be known after release. Still I think that this isn't a negative news release.

Yeah I didn't think it would cost them $100 to manufacture, but they are trying to turn a profit and with the $100 premium on the PS4 they're basically saying the Kinect is worth at least that on its own.

 

[Noswad]

I know this isn't the biggest mistake they've made recently, but someone should tell their marketing department that "cost reducing measures" is not a selling point, especially when your product is the most expensive on the market and the last one was known for its poor build quality. Ok i know this was not aimed at anyone with an intention to buy the console and i hope their good awful marketing is backing an actually half decent console but seriously Microsoft you are doing nothing to convince me that this thing is worth £430.

 

[veloper]

In other words: you get less value for money next time, while the games are still $60 instead of $50 to make more profit for Sony and M$.

 

[Caiphus]

Maybe they should sell it for less then? No?

Yeah!

Interesting to see if the old business adage works. Supposedly it costs 6 times more to get a new customer than it does to retain an existing one. Maybe after all this nonsense Microsoft will still win in America because the strong default for a consumer is to stick with their current product.

 

[CrazyCapnMorgan]

Going to call it now: After the XBone launches, it will have around 75% failure/brick rate due to hardware malfunctions.

Everything shown thus far has indicated that the XBone is either nowhere near ready for launch or it'll be capable of only basic functions, and that will be just barely.

 

[spartandude]

I wonder what this consoles RRoD will look like?

Will it flash LEDs or just die?

Because this news makes me wonder.

You get a letter from the NSA asking why they arnt getting information *insert troll face here*


OT im not relly opposed to them selling at a profit if im honest, but seriously the microsoft PR team is just terrible, one anti consumer thing after or just saying something so stupid

 

[Strazdas]

at 500 dollars and sub-par hardware they better be damn sure its profitable or else they would be being robbed somewhere.

 

[CriticalMiss]

What other cost reducing measures can there be?

Maybe the Xbone is sold unassembled and customers have to build it themselves. That would reduce labour costs and might make the packaging a bit smaller, plus it adds to the Xbone 'experience'! And since you built the console yourself Microsoft won't need those pesky warranties since you probably did it wrong and it's not their fault.