Xbox One Breaking Even, Profits with Software!

[teigaga]

RolStoppable said:
If that's true, then it equates an admission of stupidity on Microsoft's part.

Yes, you can argue that selling the hardware at break even or a slight loss is good for profitability, but we are looking at two consoles (X1 and PS4) that are substitutes for each other and one of them is €/$100 cheaper. Microsoft could easily see such slow hardware adoption that the long term profitability takes a big hit due to much lower software sales compared to taking a hit early on and getting the hardware in people's hands. There's also the consideration of Xbox Live subscriptions and the online focused nature of the X1 and PS4 on the whole which leads to people buying the system that some of their friends already have. Having a bad start could very well snowball into something much worse for Microsoft.

But thats the thing, they arent poised to have a bad start. Theres a lot of momentum behind the machine, XBL has created loyalty the PS2 wishes it had.  

Most early adopters will pick the console they want, not which ones cheapest.