Launching a new console usually ends in profit loses for the company who dares to be so bold. Past consoles, including Sony’s PlayStation 3 and Nintendo’s WiiU, had lost money when they first launched; the hope is to earn back the money in game and accessory sales as the years continue on. Microsoft doesn’t see profit loss in their future though; the company has planned to sell their console close to cost and avoid the financial loss that most companies incur.
At this year’s Citi Global Conference, Xbox Chief Marketing Officer, Yusuf Mehdi, stated that “we’re looking to break even or low margin at worst” with Xbox One. Microsoft’s Xbox One is the most expensive eighth generation console to date and with Microsoft needing to justify its console for being $100 more expensive than its nearest competitor, the PlayStation 4, a price cut might just be in the company’s favor.
What do you think – is Microsoft making a bold move by selling the most expensive console, while trying to avoid loss of profits on console sales?