(Business Perspective) Does MS really need Xbox Hardware?

[EpicRandy]

SKMBlake said:

DonFerrari said:

I don't need Xbox personally, but you are wrong on X1 or Series burning money from MS. They may not have high profits (MS doesn't show the numbers), but the HW itself hardly is losing more than 1 or 2 games worth of profit, so considering the 10+ average it console sells and the subscriptions the HW itself is advantageous to MS.

Daniel Ahmad suggested the mere profits they were making on games and services were probably overshadowed by the loss they make on hardware, during the Epic vs Apple trial.

To clarify the above. $2.2bn is not Microsoft's final profit on gaming. That's just gaming software and services profit.

You have to account for the loss that Microsoft takes on hardware, so the actual profit from Xbox would be much lower (or even negative)

— Daniel Ahmad (@ZhugeEX) May 5, 2021

I really doubt 2019 hardware loss was anything significant surely not enough to overshadow a $2.2B profits.

Going by VGChartz estimate Xbox sold 5.26m Xbox that year so this would mean an average of 418$ loss/console, that can't be right.

more than likely the vast majority of hardware loss occurred in the first 3-4 years of Xone's lifecycle and would average $100-150/system which doesn't get offset at the end of the gen since they never aim for a high-profit margin. 2019 I would think loss on hardware should be pretty marginal probably anywhere between a few $100m loss to a few $100m profits.

Unless you add RnD for the current gen but even then I highly doubt this would amount to anything able to overshadow a $2.2B profits.