Xbox One X will not generate profits for Microsoft

For Microsoft, which will not be making any money off of each Xbox One X sold, it is hoping that the power of the console is enough to attract more players into the Xbox platform.

Alongside the prominent reveal of the Xbox One X, it was announced at E3 this year that original Xbox games will soon be supported on Xbox One.

In an interview with Business Insider, Phil Spencer revealed that Microsoft would not be making a profit off of the Xbox One X's sales, simply saying "No", when asked. It has eight custom x86 cores clocked at 2.3GHz, 6 teraflops of graphics performance and 12GB of GDDR5 RAM.

The price tag of $499 is actually right on the money for many analysts, as the price is what many predicted for the Xbox One X. The question, however, is whether gamers will be willing to pay that price, especially considering the lack of exclusives for the Xbox One compared to the PlayStation 4. From what it looks like, they're just breaking even or taking a loss. With that in mind, it is expected to deliver a true 4k gaming experience. Since the upcoming console is not a next-generation gadget, games from the Xbox One and the Xbox One S will still be accessible on the device. Consoles have historically failed at this price point, and consumers seem unwilling to accept anything over $399. Fundamentally, it is just like the Xbox One, but with more powerful components. "The majority of our consoles that are sold next year will be [Xbox One] S. That has always been the plan", Spencer said. "If you're on PC you're going to be about $1500 or so, so that's another area", Ybarra said. "We're focusing on Xbox One S and Xbox One X and the games you're going to play", Spencer said.

The fact that Microsoft is not making a profit on the Xbox One X now, however, could not be considered surprising at all.

I wondered, though, if the fact that games must be created to run on any Xbox One console - whether the original Xbox One released in 2013, the current Xbox One S or the upcoming Xbox One X - might limit the potential of the new console's incredible raw horsepower.

"I don't want to get into all the numbers, but in aggregate you should think about the hardware part of the console business is not the money-making part of the business".

  • Julie Sanders