Posted on August 11, 2014, Stew Shearer Xbox One Has Cost Microsoft $400 Million Since Launch
The Xbox One has cost Microsoft $400 million in the eight months since its release.
These figures were announced recently in a report from Microsoft that revealed that high costs of producing the Xbox One have resulted a in a net revenue loss despite increased overall sales for the company’s gaming division.
“Xbox Platform revenue increased $1.7 billion or 34%, due mainly to sales of Xbox One, which was released in November 2013,” said the report. “Computing and Gaming Hardware gross margin decreased slightly, due to a $3.2 billion or 59% increase in cost of revenue, offset in part by higher revenue. Xbox Platform cost of revenue increased $2.1 billion or 72%, due mainly to higher volumes of consoles sold and higher costs associated with Xbox One.”
In other words, while Xbox consoles made an impressive $1.7 billion over the past eight months, the expenses of the Xbox One dragged those profits down to a $400 million loss. It’s worth noting, of course, that these sorts of operating losses are fairly common with new consoles. That being the case, the high costs of the Xbox One still have to sting a bit when you consider that the PlayStation 4 is selling considerably better and, according to Sony, is already profitable.