As you may recall, Xbox boss Phil Spencer made a noteworthy appearance at WSJ Tech Live 2022 last week, and now his full 30-minute interview is doing the rounds online, providing us with a few more interesting snippets of info.
We already suspected that Microsoft was taking a loss on Xbox Series X and Xbox Series S consoles in the market, but Spencer provided a few more specifics about this, revealing that Microsoft is subsidising each console by around $100 to $200 with the hope of recouping that investment in the future:
"Consoles as a business model... in the overall scope of gaming it's fairly small, relative to the places that people play. Consoles has evolved to a business model much different from phones, where consoles are actually sold at a loss in the market.
So, when somebody goes and they buy an Xbox at their local retailer, we're subsidising that purchase somewhere between $100 and $200, with the expectation that we will recoup that investment over time through accessory sales and storefront."
As Spencer noted, it's nothing unusual for consoles to be sold at a loss in the market (it's probably happening to the PS5 as well), but $100-$200 per-console still sounds like a big chunk of change to us!
Unfortunately, there may be price changes afoot for both the Xbox Series X and Xbox Series S next year, as Spencer revealed during the same interview that the brand "may have to raise prices on certain things" in the future: