Microsoft will not make any profit from the sale of the Xbox console alone, a Microsoft executive said in an Apple lawsuit against Epic Creed on Thursday.
When asked by an Epic lawyer what dividends Microsoft earns from its Xbox consoles, Lori Wright, Microsoft’s vice president of business development, responded, “We don’t;
However, this means that the company does not make any money from its console business. A Microsoft spokesman explained to Werge just hours after Wright’s testimony yesterday that the Contl gambling business has traditionally operated in a hardware subsidy format.
The spokesman explained that the gambling industry is profitable and growing rapidly. Therefore, in order to attract new customers, Microsoft sells consoles at a loss and makes profits through game sales and online service contributions.
While it is well known that gaming consoles typically make a loss and eventually make a profit, Microsoft has never made a hardware profit for its Xbox, and it’s still amazing to rely on software, service, and device sales.
Moreover, Microsoft is the one to follow this business model, hoping that Sony’s PS4 will eventually make a profit, and Nintendo has also launched the switch for a quick switch.