Xbox One to at least Break Even at Launch, 360 to Last 3 More Years

by William D'Angelo, posted on 05 September 2013 / 6,844 Views

Microsoft corporate VP of marketing and strategy for Microsoft's Interactive Entertainment Business Yusuf Mehdi has stated that the Xbox One will at the minimum break even launch, with the possibility at being sold for a profit.

"The strategy will continue which is that we're looking to be break even or low margin at worst on [Xbox One] and then make money selling additional games, the Xbox Live service and other capabilities on top," said Mehdi at the Citi Global Technology Conference attended by GamesIndustry International. "And as we can cost-reduce our box as we've done with 360, we'll do that to continue to price reduce and get even more competitive with our offering."

Mehdi added that the Xbox 360 has been on the market for nearly eight years and Microsoft plans to keep supporting it for another three years. The Xbox 360 is currently "incredibly profitable." There are more than 100 games planned to be released on the Xbox 360 in the next three years.

"Some of these things take some time in the launch year in which you invest, and then they they play out over time," added Mehdi. "We're going to continue to invest in Xbox 360, and the two devices can work in concert. So it's not like the day we ship Xbox One your 360 won't work. We'll continue to support it."


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9 Comments

DietSoap
DietSoap (on 08 September 2013)

Launch isn't the time for profit, launch is the time to be competitive.

  • +1
NYANKS
NYANKS (on 05 September 2013)

Yeah, you can't really say you're going to continue to support something that you haven't been supporting for a while now. Look at Sony, THAT is supporting. If anything, they might be over-supporting

  • +1
Michael-5
Michael-5 (on 06 September 2013)

HAHA, true that. Sony gave PS3 something like 7 first party exclusives for 2013. 360 hasn't seen 7 first party exclusives for maybe 2-3 years, and few have been worthwhile.

  • +2
DietSoap
DietSoap (on 08 September 2013)

Launch isn't the time for profit, launch is the time to be competitive.

  • 0
kowenicki
kowenicki (on 05 September 2013)

360 is "incredibly profitable". Throw a price cut at it toward the holiday period or in the new year and have one last year of decent sales. Push on toward 90m.

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Michael-5
Michael-5 (on 06 September 2013)

Why should the 360 ever stop working? If people pay for XBL gold, and still play on 360, is't it your duty to service them? Okay it won't be as busy, so reduce the number of servers for 360, but why make it impossible to play 360 games online? You're forcing people to upgrade systems....shady MS

  • -1
sethnintendo
sethnintendo (on 06 September 2013)

I would assume that they would treat it about the same as the original Xbox but perhaps support it with Xbox Live longer. They pulled Live off the original Xbox around the first few years of the 360. 360 has been way more successful so they will probably have Live support longer than the first xbox. Eventually, they will end the online services but I wouldn't expect that till about 2015 or 2016.

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Angelv577
Angelv577 (on 05 September 2013)

So no price cut anytime soon.

  • -1
sethnintendo
sethnintendo (on 05 September 2013)

Break even would be impressive but that comes with a $500 price tag. This should give them room though to be able to afford a price drop if sales start stalling after launch. They could perhaps match the PS4 price after a year or two without taking any losses.

  • -1
ironmanDX
ironmanDX (on 05 September 2013)

An observation... Thumbed down. To be expected, it's a positive observation for MS. We can't have that now, can we?

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sethnintendo
sethnintendo (on 06 September 2013)

Well it wasn't a total positive statement for MS. However, Sony said they aren't going to have PS3 launch losses but they are still going to lose money on each system sold. So Microsoft should be able to match the PS4 price after a year or two without ever selling the system at a loss.

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DaAndy
DaAndy (on 05 September 2013)

"Microsoft plans to keep supporting [the 360] for another three years." Oh yeah right, because MS supports the 360 so incredible good with games nowadays^^ He rather should have said they "plan to let the 360 for another three years at the market" - but this probably would not not sounded as good as his choice of words.

  • -4

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ellen
ellen (on 05 September 2013)

Comment removed.

  • -5