Microsoft loses hundreds of dollars on every Xbox Series console sold

Microsoft Corporation is facing serious financial challenges in the gaming console market. According to recent reports, the company is losing hundreds of dollars for every Xbox Series console sold. This situation is raising concerns about the tech giant's gaming division strategy, as production costs for consoles should typically decrease over time. This is reported by Ixbt.com reports .

According to Windows Central, the losses amount to at least $200 or more per unit. Despite price increases for consoles, the cost of production and components remains significantly higher than the retail price. This came as an unexpected blow to Microsoft, as hardware in the gaming industry is expected to become profitable after a few years.

Memory prices and production issues

Asha Sharma, the new head of the Xbox division, recently highlighted the complexity of the situation in a statement. It is reported that the cost of memory modules required for the consoles has risen sharply. According to some estimates, the cost of components has increased by up to 700 percent. This forces Microsoft to sell its products well below cost.

Currently, the overall margin (profitability) of the entire Xbox division has dropped to just 3 percent. This is an extremely low figure for a giant company like Microsoft. The company is trying to cover its revenue through Game Pass subscriptions and game sales, but heavy losses in hardware are negatively impacting the overall balance.

Exclusive games and unexpected results

The situation is further complicated by the company's major gaming projects. A number of exclusive and important games that Microsoft had high hopes for did not meet sales and popularity expectations. The following projects failed to reach the revenue levels the company anticipated:

• Avowed and Hellblade 2;
• Forza Motorsport;
• The Outer Worlds 2;
• South of Midnight and Keeper.

In the Uzbekistan market, Xbox Series consoles are actively competing with their rival, PlayStation 5. For local users, Xbox has often been an affordable choice due to the Game Pass service. However, these global financial problems could lead to further price increases for consoles or a fundamental shift in Microsoft's strategy in the future.

Experts believe that Microsoft may now shift its focus from hardware to software services and cloud gaming technologies. If hardware losses do not decrease, the company will have to reconsider its console production model in the future.