Microsoft won’t be making any money on the Xbox One X

3 min read
51

X1Xunit

The Xbox One X is coming later this year, and it’s the most powerful console ever released. It has eight custom x86 cores clocked at 2.3GHz, 6 teraflops of graphics performance and 12GB of GDDR5 RAM.

By comparison, the PS4 Pro has 4.2 teraflops, the standard Xbox One has 1.31 teraflops, and the standard PlayStation 4 has 1.84 teraflops. This means that the Xbox One X has a roughly 40% power margin over the PlayStation 4 Pro. According to Microsoft’s Phil Spencer, they don’t see the Pro as competition for the Xbox One X, suggesting that it goes up against the Xbox One S instead.

“I look at Pro as more of a competitor to S than I do to Xbox One X,” Spencer told Eurogamer. “This is a true 4K console. If you just look at the specs of what this box is, it’s in a different league than any other console that’s out there.”

Microsoft may be little disingenuous there. To my mind, while the Xbox One X is definitely more powerful than the Pro, it is analogous. It’s a more powerful Xbox One, that will play some games in “True” Native 4K, while others will use methods like reprojection and checkerboard rendering to fill a 2160p framebuffer. That’s quite a bit different to upscaling – but that’s a conversation for another time.

Read  Unlike the PS4 Pro, the Xbox One X will support native 1440p monitors

What’s surprising is that Microsoft’s is able to retail a box with this much juice in it for as little as $500. While that’s a lot of money for a machine that plays games, it’s a lot less than you’d pay for a similarly specced PC. Unsurprisingly, Microsoft isn’t making money each of those consoles sold.

Like most consoles before it, The Xbox One X will be a loss leader, with Microsoft taking a hit on the hardware, so they can make it up later on software sales.

“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,” Spencer told Business Insider.

“The money-making part is in selling games.”

It’s traditionally only Nintendo who manages to sell its hardware at any sort of profit out of the gate (though the Wii U was an anomaly) there. As a reference, it took Sony four years to make any profit on hardware sales for the PlayStation 3.

Need more E3 in your life?
Check out our E3 2017 portal powered by Megarom Games and PlayStation

Last Updated: June 15, 2017

Geoffrey Tim

Editor. I’m old, grumpy and more than just a little cynical. One day, I found myself in possession of a NES, and a copy of Super Mario Bros 3. It was that game that made me realise that games were more than just toys to idly while away time – they were capable of being masterpieces. I’m here now, looking for more of those masterpieces.

  • The lies continue.

    • Alien Emperor Trevor

      Yes, they’ll make at least 4k on it.

      • Original Heretic

        That’s a lantern to the knee comment.

      • Hammersteyn

        Bwahahaha!

      • MonsterCheddar

        XD.

      • tehehe

  • “That’s quite a bit different to upscaling – but that’s a conversation for another time.”

    Just a little under 6 hours left till 5pm. I think we got time 😛

    • MonsterCheddar

      TRUE 4K!!!!! o/

  • The mid range $500 (not even high end) GPU’s have 6+ teraflops on both sides of team red and green. These are above average graphics cards used for typical 1080p and 2K gaming.

    If you are a enthusiast then you will go for the high fps 2K route or close to 60fps 4K route by using strong high end $1000 graphics cards (sometimes two of these in SLI or crossfire). And that is the reality of “true” 4K prices.

    • Hammersteyn

      I disagree, I’d post the link but you can go Google them.
      😛

        • Hammersteyn

          XD

          • I’m starting to think people really do believe in magic xD

          • Alien Emperor Trevor

            Clouds are real!

          • Hammersteyn

            In 2015 they boasted that Crackdown would use the cloud, but not anymore. Silly clouds.

          • Pieter Kruger

            It will still be using the silly clouds……

          • Hammersteyn

            Nope it won’t, you know how I know? Research and I’m not gonna tell you to Google it, I’ll even give you a link
            https://www.theverge.com/2017/6/11/15740872/crackdown-3-trailer-gameplay-release-date-xbox-one-e3-2017

          • Pieter Kruger

            I hope your day job doesn’t involve you doing any “research”, it says multiplayer will be using the silly clouds, it says so right there, in the same article you linked to….??!! Well at least it also explains some of your previously “researched” comments now……..😂😂😂

          • Hammersteyn

            Did not see that, they must’ve edited it, cause I did read it. Funny how they jump around

          • Pieter Kruger

            Whatever, maybe next time read up a bit more before automatically going into MS bashing mode…..? You DO realise Sony is now the arrogant guys dictating & trying to force what they think is good for the gamers and gaming industry in general, and that Ryan is the new Mattrick?

          • Hammersteyn

            Whatever. whatever, like you do anything but bash Sony?

          • Hammersteyn

            They do, like exclusives appearing magically

  • Hammersteyn

    I bet it still won’t crack the Japanese market.

    • Raidz19

      I actually found it very interesting that so many of their games at e3 looked anime-ish. Like they are trying really hard to get in there

      • Hammersteyn

        If they’re not buying a PS they’re picking up Switches by the dozens, even I’m tempted to grab a Switch.

    • Jim of the Banana

      Microsoft makes consoles that are as big as houses…. I think it scares the Japanese….

      • You shut up!

      • Hammersteyn

        LOL!

      • MonsterCheddar

        The Xbonks is evidently their smallest console ever.

        • HvR

          no sorry you are correct; but that is like Jeep this is most economical Jeep ever and still only get 5km/l

  • Raidz19

    Only…there are no real exclusives yet so how do they plan on making money out of games?
    I’m also really curious to see how many sales this will get considering the record breaking number of people that bought consoles in the last 2 years

    • Fox1 – Retro

      That’s what they said in the 360 generation.

  • Jim of the Banana

    If you want to win the championship, you have to be prepared to score a self-ko.

  • Skittle

    I’m lost. How many version of the xbone are there now? Are more coming? Is the PS4 comfortable with only having two or is there also a new one planned?

  • BakedBagel

    Its difficult to wrap my head around

    A company making a product with an expected loss, and to use a backup of “selling games”

    Is it just me or does that seem like a massive risk?

    • Alien Emperor Trevor

      Loss leading is always a risk, and it worked for them & Sony with previous generations. I just hope the sales figures they’ve based all this on isn’t from the same place that told them everyone wanted an always-online console without a disc drive.

      • BakedBagel

        Its just… games tho?

        One of the most unpredictable products on the market too date.

        You dont know what you are getting when the end product arrives, you honestly dont know how its going to perform in the market. COD a fine example. Soooooooo much hype around the last one, and it fell flat on its face.

        What do i know tho, i havent made a console lol.

        • Alien Emperor Trevor

          Games and services. I wouldn’t be surprised to see them aggressively pushing more sub services like Xbox Live and stuff. You sell the loss leader to basically “trap” people into your ecosystem.

          • BakedBagel

            Makes sense, and it completely shines light on the entire “Exclusive” battles that goes on between consoles

            Gotta trap the user into your system only. Maximize profits

    • consoles have been that way since forever thouh, and it seems to be working fine.

      • BakedBagel

        Hundred Percent and hey if it works, it works.

        Its just,hearing a company make any product with an expected loss is weird 😛 especially from Giants like Sony and MS

        • HvR

          Typical service model vs drop box model.

          The service model tend bring in more profits over the product lifetime in tech industry even if hardware goes for break even or a loss.

      • BakedBagel

        I guess this is how movies are financed tho ?

  • In other news: Xbox game prices suddenly go up by 100%.

    😛

Check Also

Star Wars Battlefront II has a big HDR problem

HDR is meant to be the extra cherry on top of an already stunning game, but Battlefront II…