In a court proceeding between rivals Apple vs. Epic, Microsoft has stated that every sale that it has made on its Xbox console has yielded it no profits. This is known by pretty much all console manufacturers like Xbox, PlayStation, and Nintendo, but it just goes to show that selling games & Xbox Game Pass is absolutely important for their survival.
Microsoft has been pretty aggressive in expanding its domain in providing highly incentive-driven service to gamers through their Xbox Game Pass as well as going through acquisitions in order to expand its roster.
In the highly spectated lawsuit between Epic Games & Apple, Epic Games lawyer Wes Earnhardt demanded answers from Xbox VP Lori Wright about how much profit does Xbox make on its console sales. The reason for that was to show that there’s a reason why Xbox & Playstation, among other platform distributors, take a 30% part of the sales that are made for its consoles.
That would show that the companies really need it, meanwhile Apple doesn’t because it does not hold games and consoles to be a large part of its services and profits.
Wright argued that while Xbox is selling its consoles at a loss, it’s part of a larger strategy to sell more of its services such as the Xbox Live and Xbox Game Pass. While they’ve just hit 23 million subscribers to Xbox Game Pass, it just goes to show that these services are the largest profit centers for the company.[Via]