MS may have lost a decent amount of cash that in the over all picture isn't much of a hit to them. But it's an awful lot less then the planned income when they were making the console. They would have been hoping to shift that number at launch price and not as many games included. As the article pointed out they had to shift all that stock lying around and if they didn't it would really affect the production going forward.

Good move by MS but really the only option they had. (good option at least)

Anybody that think it was stupid for MS to give to free digital download games to increase the userbase. Has everyone already forgot that MS, and Sony give away more than that every month with a online subscription for $50 and $60 a year.

MS - 3 free games a month, 2 for 360 and 1 for Xbox one.

Sony 6 free games a month, 2 for Vita, 2 for PS3, and 2 for PS4

Didnt we just have a thread that said Sony gave out almost $1400 in a year per subscription? And people think 2 games during the holiday season was a desperate move? even though most of those people bought Live subscriptions too.

The Xbox One costs less than $400 to manufacture...Was not even that expensive at launch to build.

interesting article so sony is making 20$ profit on each console while MS is losing 50$ just shows how much leverage sony really has over MS. They could easily sell their PS4 for 380$ and include 3 sony games like killzone, knack and infamous and lose not any money on it.

I think sony is smart for waiting and watching how long MS really wants to bleed this price drop, they soon gonna release their console in china which is more important for sony right now.

LOL at all the Xbox fans damage controlling the hell out of this, I mean seriously Microsoft aren't going to be happy that their 8th gen console business has been a loss for the whole time it's been around, that they're having to give away not just profits from initial hardware sales, but also games and in some cases XBL to just try to gain some market share in a region where they were dominant for basically the entire 7th gen.
So far I don't recall anyone from Microsoft indicating that they'd made any money on hardware, not for the entire time the system has been on the market.

Some people won't be buying games for ages as they've spent their money on this big expenditure of getting an Xbox One to begin with. They're not going to be adding to the software income, XBL or any other kind of income related to the console for some time, possibly months considering that there aren't many exclusives coming out on the system.
Sure 3rd party games may be a source of revenue, indies like Ori are around the corner too, but many of these new owners will be busy playing the free games Microsoft gave away, will be the COD crowd or those people playing Assassin's Creed, so what is there for them to shell out money on.

There's also the fact that the driving force for sales in November and maybe December will be gone in January because the price and free games can't be sustained, especially if it will have no effect when PS4 is actually getting even more exclusives very soon, same goes for Wii U, there are reasons to buy those systems.

Many of these people that "invested" in Xbox One may end up trading those systems in for a PS4 or a Wii U when they see all of the games coming and it won't be at huge cost to them, not for the amount of games they'll be able to play.

The stores get the product at wholesale prices just like the production company gets parts from the manufacturer when they buy in bulk. MS is is truthfully paying out to Ubisoft. They've essentially witheld on profit for three months and are paying out to Ubisoft for their product until the contract is up January third. Its instant sales for Ubisoft and gets the MS the short term attention they demand. The whole point of the risk is to get eyes on them and not on Sony.

Ah, this is the answer I was looking for. The only way retailers can offer such deals and be profitable is if MS is selling those X1's to them at a cheaper price. All this proves is that MS made a much much bigger loss on the X1 hardware this quarter than the $63m figure in the article. 

You really don't get it. How do you think these companies make money?

Software, peripherials and subscriptions right? Guess which one of the console makers usually have the highest attach ratio on their hardware?

To make any assumption on how much MS is losing, you have to know the manufacturing cost of those hardwares.

I get all that and I've never disagreed with it. We all know software, controllers, live etc. make a lot of money. But I specifically said "loss on X1 hardware" not the whole of Xbox. All I'm saying is that each X1 is losing much more than the $51 the article claims it does. 

What is the cost to make an X1?