Microsoft has now confirmed the price and release date of both of its upcoming next-generation consoles, theXbox Series Xand theXbox Series S. TheXbox Series Xwill hit $499, while the Xbox Series S comes in at a more affordable $299. And if those seem like very competitive prices for next-gen hardware, that’s potentially because Xbox is going out of its way to offer great prices. An unsourced report says that Xbox is going to be taking a loss on the sales of both consoles.
The rumor comes from Venture Beat reporter Jeff Grubb in response to leaker/insider Benji-Sales on Twitter when asked ifMicrosoft is taking a loss on the Xbox Series S. Grubb replies in the affirmative but doesn’t provide a source for his information, and he explains that Microsoft is taking a loss on both the Xbox Series X and the Xbox Series S. He also notes that “it seems like” Microsoft is taking a bigger loss on the Xbox Series S comparatively.
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Selling consoles at a loss isn’t a new strategy in the console business, of course. In fact, almost all video game consoles are initially sold at a loss, as that’s how console makers are able to offer console hardware comparable toPC hardwarethat comes similar or bigger prices. These strategies are proven to help build consoles' install bases in the early months of a console’s release. Then, over time, console makers are able to improve production efficiency so that their loss decreases.
Obviously, Grubb’s news is just a rumor until more information is shared by Microsoft. Nevertheless, selling the new Xbox consoles at a loss was always expected. Xbox lost a lot of ground in thePS4 and Xbox One generation, ground that it hopes to regain in the next generation, so making the new Xbox consoles affordable was likely a huge priority.
The question remains whether or not Sony will match Microsoft’s efforts. Sony is much better positioned going into the next generation of consoles and could decidenot to sell the PlayStation 5 at a loss. But that would probably mean the PS5 would be more expensive than the Xbox Series X, which would make the next several years very interesting.
TheXbox Series XandXbox Series Slaunch on November 10.
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