Xbox Reportedly Losing Hundreds of Dollars on Every Series X|S Console Sold

Microsoft is reportedly losing "hundreds of dollars" everyone Xbox Series X/S console it sells, as rising memory and component costs continue to squeeze the hardware side of its gaming business.

The claim comes from Windows Central's Jez Corden, who reports that Xbox failed to secure enough fixed-price memory supply for its current consoles. According to the report, wholesale memory prices have risen by 700% since the Xbox Series X/S hardware originally costed, leaving Microsoft exposed to much higher production costs.

Xbox Series X|S hardware is reportedly becoming more expensive to sustain

Selling consoles at a loss is not unusual in the gaming industry. Platform holders often subsidie hardware and recover that moneyy through game sales, subscriptions, accessories and digital storefront revenue.

Microsoft has acknowledged this model before. In 2022, then-Xbox boss Phil Spencer said Microsoft was losing around $100 to $200 on every Xbox Series X or Xbox Series S sold, with the expectation that revenue would be recovered elsewhere in the ecosystem.

The different now is the scale of the reported loss. Windows Central's report says Xbox is no longer losing "dozens" per console, but "more in the hundreds" on every Series X/S unit sold.

Rising memory prices are forcing Xbox to rethink console strategy

The hardware pressure also arrives Microsoft is already reconsidering how future Xbox consoles should be built and sold. The Verge recently reported that Microsoft is evaluating "radically different" console business models for its next-generation Xbox, codenamed Project Helix, with affordability becoming a bigger concern as memory and storage costs rise.

Xbox CEO Asha Sharma has described the wider hardware market as being in a crisis, and suggested that Microsoft needs to rethink the cost structure of consoles, explore new partnerships and offer more flexible ways for players to participate in the Xbox ecosystem.

That could mean more flexible storage options, different hardware configurations, financing-style models, or deeper partnerships with PC manufacturers. Microsoft has already moved in that direction with Xbox-branded handhelds made with Asus, and future Xbox hardware may lean further into that hybrid console-PC approach.

Xbox is facing pressure beyond hardware

The reported hardware losses are part of a wider set of challenges for Xbox. Reuters recently reported, citing The Information, that Microsoft has considered options including spinning off Xbox or restructuring it as a wholly owned subsidiary, although no restructuring is said to be imminent.

The same report said Xbox has struggled as Microsoft’s bets on subscriptions and cloud gaming have not fully offset declining console sales and a shortage of major blockbuster releases. Microsoft has not publicly confirmed the reported console-loss figures.

For now, the key takeaway is that Xbox hardware appears to be caught between two difficult forces: consoles are becoming more expensive to manufacture, while Microsoft still needs affordable hardware to bring players into Game Pass and the wider Xbox ecosystem.

There is no confirmed Middle East pricing or availability update tied to these reports. Xbox Series X|S consoles remain available in the region, but Microsoft has not announced any UAE or Saudi Arabia-specific hardware pricing changes in response to the reported cost pressures.

FAQ

Is Microsoft really losing money on every Xbox console sold?

Microsoft has previously acknowledged that Xbox consoles are sold using a hardware subsidy model. The latest report claims those losses have grown to hundreds of dollars per Xbox Series X|S console, but Microsoft has not publicly confirmed the new figure.

Why is Xbox reportedly losing more money on console sales?

The report points mainly to rising memory costs. Windows Central claims wholesale memory prices have risen by 700% since the Xbox Series X|S was costed, making the consoles much more expensive to manufacture.

Will Xbox Series X|S prices increase again?

Microsoft has not announced any new Xbox Series X|S price increase. However, recent reports suggest the company is rethinking its console business model because hardware costs have become harder to manage.

Has Microsoft announced new Xbox pricing for the UAE or Saudi Arabia?

No UAE or Saudi Arabia-specific Xbox pricing update has been announced in relation to these reports.

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