Microsoft Confirms It Never Earns A Profit On Xbox Console Sales

Update: Microsoft has followed up on its comments with the following statement:

"With more than 23 game studios creating games, more than 100 million monthly active Xbox players, and more than 18 million Xbox Game Pass subscribers across console, mobile and PC, the Gaming business is a profitable and high-growth business for Microsoft.

The console gaming business is traditionally a hardware subsidy model. Game companies sell consoles at a loss to attract new customers. Profits are generated in game sales and online service subscriptions."

Original story: Although we've heard plenty of remarks and rumours along these lines before, Microsoft was asked to confirm today in the Apple Vs. Epic court trial that it doesn't make any profit on Xbox console sales whatsoever.

As highlighted by The Verge's Adi Robertson on Twitter and IGN, Xbox vice president Lori Wright told Epic Games' lawyer that Microsoft "sells the consoles at a loss" as "hardware is critical" to the Xbox brand:

In addition to this, Wright also reportedly told the lawyer that if Microsoft didn't take 30% commission from developers on console, Microsoft "couldn't make money off the Xbox."

This is nothing new for the industry - consoles have long been sold at a loss - although interestingly it appears that Nintendo is actually making a profit on the Nintendo Switch, while hardware is still generating a loss for PlayStation.

Any surprises here? Give us your thoughts on this statement from Xbox down in the comments below.

[source, via,]