Xbox Series X And Xbox Series S Reportedly Causing Microsoft To Lose Money

A new piece of information surfaced online, claiming that Microsoft is selling Xbox Series X and Xbox Series S at a loss. Microsoft announced earlier this week the official retail price of the Xbox Series S. The all-digital gaming console would soon be available at a starting price of $299.

The Xbox Series S features the same CPU as the Xbox Series X but it is $100 cheaper than its sibling. Some gaming enthusiasts are now wondering if Microsoft is selling its next-generation gaming consoles at a loss. It appears that Venture Beat’s Jeff Grubb also thinks the same.

According to Grubb, the Redmond-based tech giant is taking a loss on both the Xbox Series X and Xbox Series S. However, he noted that Microsoft is taking a bigger loss on its all-digital next-gen gaming console. One of the possible reasons why Microsoft is taking a bigger loss at Xbox Series S is because of its CPU.

The more affordable next-gen console uses the same CPU as the Xbox Series X. The Verge’s Tom Warren tweeted how surprising this is to pay for $299 for the console. "Microsoft has confirmed the Xbox Series S uses the same CPU as the Xbox Series X running at 3.6GHz. Yes, the Xbox Series S CPU is faster than the PS5." Although the price of the Xbox Series S is really low, reports that Microsoft is losing money on Xbox hardware are not at all surprising.

Interestingly, the industry insider thinks that Microsoft is not alone in taking losses. Grubb believes that the PS5 Digital Edition is “absolutely going to take a loss.” Sony has not yet announced the price point for the PS5 and PS5 Digital Edition. However, it is interesting to see how much Sony would sell its next-gen consoles considering that Microsoft has already announced the $499 price of the Xbox Series X and $299 of the Xbox Series S.

Sony’s PlayStation has consistently sold better than Xbox gaming systems. The latest strategy of Microsoft offering a couple of options could prove to be a threat to its rival if Sony does not come up with a competitive pricing strategy for the PS5 and PS5 Digital Edition.