# How much money does MS lose on every X-Box? **URL:** \ **Category:** Factual Questions\ **Created:** [May 15, 2002, 1:35pm UTC](https://boards.straightdope.com/t/how-much-money-does-ms-lose-on-every-x-box/109192 "2002-05-15T13:35:47Z")\ **Posts on this page:** 8\ **Page:** 1
**Author:** ![bernse](https://avatars.discourse-cdn.com/v4/letter/b/a9a28c/32.png) [@bernse](https://boards.straightdope.com/u/bernse)\ **Post date:** [May 15, 2002, 1:35pm UTC](https://boards.straightdope.com/t/how-much-money-does-ms-lose-on-every-x-box/109192/1 "2002-05-15T13:35:47Z")
Most people semi-familiar with the video game industry know the economic basics of it too (IE - At launch, eat a loss on hardware, make money on software). With Sony just dropping the price of the PS2 to $200 US and Microsoft being “forced” into following suit, how much does MS lose on each unit sold? I am guessing that Sony is now to the point of breaking even (if not turning a profit) on the PS2 hardware now as it is about 2 years old, but I really doubt that MS is doing the same. ---
**Author:** ![sghoul](https://avatars.discourse-cdn.com/v4/letter/s/3ec8ea/32.png) [@sghoul](https://boards.straightdope.com/u/sghoul)\ **Post date:** [May 15, 2002, 3:08pm UTC](https://boards.straightdope.com/t/how-much-money-does-ms-lose-on-every-x-box/109192/2 "2002-05-15T15:08:49Z")
I had read once that MS was already loosing 100-200 bucks per Xbox. So, a price cut would cause even more. ---
**Author:** ![scm1001](https://avatars.discourse-cdn.com/v4/letter/s/c4cdca/32.png) [@scm1001](https://boards.straightdope.com/u/scm1001)\ **Post date:** [May 15, 2002, 5:07pm UTC](https://boards.straightdope.com/t/how-much-money-does-ms-lose-on-every-x-box/109192/3 "2002-05-15T17:07:52Z")
about .0000000001% of its reserves. I am sure it is not losing too much sleep at the minute ---
**Author:** ![abel](https://avatars.discourse-cdn.com/v4/letter/a/2acd7d/32.png) [@abel](https://boards.straightdope.com/u/abel)\ **Post date:** [May 15, 2002, 5:10pm UTC](https://boards.straightdope.com/t/how-much-money-does-ms-lose-on-every-x-box/109192/4 "2002-05-15T17:10:13Z")
But… do you really think that the entire cost of manufacturing an X-Box exceeds $200? Microsoft doesn’t have to pay anywhere near as much as Joe Shmoe, average American consumer, for hardware, and the software is theirs, so… ---
**Author:** ![barker](https://avatars.discourse-cdn.com/v4/letter/b/919ad9/32.png) [@barker](https://boards.straightdope.com/u/barker)\ **Post date:** [May 15, 2002, 5:24pm UTC](https://boards.straightdope.com/t/how-much-money-does-ms-lose-on-every-x-box/109192/5 "2002-05-15T17:24:11Z")
Microsoft has been losing between $76 and $105 on every Xbox sold at the $299 price. Add a $100 to the loss at the new price. Latest news is that maunfacturing will be moved from Hungary to Doumen, China to cut production costs. ---
**Author:** ![malden](https://avatars.discourse-cdn.com/v4/letter/m/7bcc69/32.png) [@malden](https://boards.straightdope.com/u/malden)\ **Post date:** [May 15, 2002, 5:24pm UTC](https://boards.straightdope.com/t/how-much-money-does-ms-lose-on-every-x-box/109192/6 "2002-05-15T17:24:52Z")
> [@](#): > > Microsoft also said it will shift Xbox production from Hungary to Doumen, China, near Hong Kong, in a move that will cut costs. It will maintain its North American facility in Guadalajara, Mexico. > Analysts have estimated that at the initial retail price of $299, Microsoft has been losing anywhere between $76 and $105 on every Xbox sold. Thus saith **MS** NBC in [this link](http://www.msnbc.com/news/752359.asp?0dm=C11JT). And that’s at the **old** price! Maybe they make a lot of money licensing to the game manufacturers. ---
**Author:** ![JaxBeachBoy](https://avatars.discourse-cdn.com/v4/letter/j/e19adc/32.png) [@JaxBeachBoy](https://boards.straightdope.com/u/JaxBeachBoy)\ **Post date:** [May 15, 2002, 6:32pm UTC](https://boards.straightdope.com/t/how-much-money-does-ms-lose-on-every-x-box/109192/7 "2002-05-15T18:32:40Z")
I also read that Sony is now turning a small profit at the 199 price…due to manufacturing process improvements and product redesigns. I still wouldn’t buy an XBOX at 199, I had one and sold it. There just aren’t any games on it. ---
**Author:** ![rookie523](https://avatars.discourse-cdn.com/v4/letter/r/71c47a/32.png) [@rookie523](https://boards.straightdope.com/u/rookie523)\ **Post date:** [May 15, 2002, 9:03pm UTC](https://boards.straightdope.com/t/how-much-money-does-ms-lose-on-every-x-box/109192/8 "2002-05-15T21:03:13Z")
i think a chunk of xbox cost goes to nvidia and that probably is why MS is losing money… sure the hard drive, ram and cpu can be bought at $10 each probably… but the graphics chip… graphics cards that level cost $200-300… plus the sound, the dvd, the R&D, the custom cables,…