Xbox One Sales Are Costing Microsoft
The Xbox One’s wobbling foray into the international market has been very highly criticised, but it appears the damage done to Microsoft has been a lot worse than they’ve been letting on. While Sony has been very happy with the progress of their latest generation console, Microsoft appears to be losing money trying to sale its latest multimedia box.
Taken from a report to shareholder ‘s Microsoft explains that its gross margin of Computing and Gaming Hardware decreased “slightly” due to the cost of building the newer hardware.
Xbox Platform revenue came it $1.7 Billion, while the cost of Xbox Platform came in at a staggering $2.1 Billion – which shows a $400 million shortfall, which is apparently on a slight loss to Mircosoft.
Microsoft will have to pull off something truly amazing to begin turning these numbers back around, and with the rumour of yet another price drop Xbox One circulating at the minute we’ll just have to wait and see what they plan on doing to keep their console afloat.
Below is the extract from shareholders report, because it full report is 160 pages:
Computing and Gaming Hardware revenue increased $3.2 billion or 49%, primarily due to higher revenue from the Xbox Platform and Surface. Xbox Platform revenue increased $1.7 billion or 34%, due mainly to sales of Xbox One, which was released in November 2013, offset in part by a decrease in sales of Xbox 360. We sold 11.7 million Xbox consoles during fiscal year 2014 compared with 9.8 million Xbox consoles during fiscal year 2013. Surface revenue increased $1.3 billion or 157%, due mainly to a higher number of devices and accessories sold.
Computing and Gaming Hardware gross margin decreased slightly, due to a $3.2 billion or 59% increase in cost of revenue, offset in part by higher revenue. Xbox Platform cost of revenue increased $2.1 billion or 72%, due mainly to higher volumes of consoles sold and higher costs associated with Xbox One. Surface cost of revenue increased $970 million or 51%, due mainly to a higher number of devices and accessories sold, offset in part by a charge for Surface RT inventory adjustments of approximately $900 million in fiscal year 2013.