Xbox One won't be loss leader for Microsoft

By Steve Watts, Sep 06, 2013 7:45am PDT

Microsoft won't be taking a hit by selling Xbox One, unlike most other console launches. Typically, hardware manufacturers subsidize the cost of the console, which typically costs more to manufacture than its sticker price suggests. (For example, Sony famously lost hundreds for every PS3 sold.) Xbox marketing director Yusuf Mehdi says that the company plans to at least break even on each sale, rather than letting it serve as a loss leader for software and services.

"The strategy will continue which is that we're looking to be break even or low margin at worst on [Xbox One], and then make money selling additional games, the Xbox Live service and other capabilities on top," Mehdi said at the Citi Global Technology Conference, reported by GamesIndustry.biz. "And as we can cost-reduce our box as we've done with 360, we'll do that to continue to price reduce and get even more competitive with our offering."

Sony echoed Microsoft with their plans for PS4.

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