It is reported that Microsoft may lose up to US$200 per Xbox Series X|S console sold, and its next-generation console Helix is not expected to be equipped with an optical drive. In the latest episode of the "Windows Central Podcast," co-host and Xbox industry insider Jez Corden said that it is increasingly difficult for the console industry to make profits in the current environment. He learned from sources that Microsoft loses up to US$200 for every Xbox Series X|S console sold. "I've heard that Xbox's loss cap right now could be $200 per console," he said.
Corden pointed out that rising memory prices, rising component costs, tariff issues and widespread supply chain difficulties have all led to significant increases in manufacturing costs. Console manufacturers' traditional business model of "selling hardware at a loss and making profits through games and software services" is becoming increasingly unsustainable. In addition, he believes that there is another reason why the console business is under pressure: many players will hardly incur additional consumption after purchasing a console. Free games such as “Fortnite” and “Robulus” allow players to play hundreds of hours without purchasing other titles.
"If Xbox really loses $200 per console," Corden said, "in addition to the $700 players spend to buy the console, they have to spend another $200 within the platform ecosystem to get back the money...and for many players, this will take several years to achieve." He added that both Microsoft and Sony Interactive Entertainment are reducing console shipments to control losses, and at the same time raising console retail prices to offset rising production costs.
As for next-gen hardware, Corden doesn't think the Xbox Helix will come with a disc drive. "The latest news I got is that there is no CD-ROM drive in Helix's plans," he said. He mentioned that Microsoft is paying close attention to the backlash from players caused by Sony Interactive Entertainment's abandonment of physical media. But he also believes that from the perspective of manufacturing costs, the price-performance ratio of built-in optical drives is getting lower and lower, making it difficult for manufacturers to pay for them anymore. "The business model and profitability of optical drive manufacturing have completely collapsed." He said that launching an external USB optical drive may be the most realistic compromise, but he also admitted that it is hard to say whether this solution can be implemented.