Microsoft recently confirmed the price and launch date of its two next-gen consoles, the Xbox Series X and Xbox Series S. The Xbox Series X is priced at $499 and the slightly less powerful Series S is priced at a surprising $299. However, it seems that the steep pricing has also come with a cost on Microsoft's end.
According to an unsourced report from Venture Beat reporter Jeff Grubb, Microsoft is taking a loss on both the Xbox Series S and Xbox Series X. The reporter also stated that the company is taking a bigger loss on the Xbox Series S.
It seems that Microsoft is selling the console for even less than the manufacturing cost. A discounted console price also means that more players will be buying the console, in turn, an increase in game sales.
It is also worth noting that selling consoles at a discounted price isn't a new strategy. Most consoles have been sold at a lower price to match with comparable PC hardware of the time. Since a typical console generation lasts for about 5-7 years, companies can actually make more money by selling games than the console itself. Therefore, it is more important for a company to sell more consoles first.
However, it remains to be seen whether or not Sony will take this drastic step. Since Sony is already positioned well as it steps into the next-generation of gaming, it seems unlikely that the company will sell its next-generation consoles at loss. Nevertheless, there have been rumors that Sony has also slashed the price on the PS5 in response to Xbox Series X's announcement. It still seems highly unlikely that Sony would match PlayStation 5's pricing with the Xbox Series X.
Xbox Series X and Xbox Series S consoles are launching on November 10.
