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Microsoft to break even on Xbox One consoles, give cash Live rewards

updated 12:24 pm EDT, Fri September 6, 2013

Company welcomes holiday walk-ins

Microsoft executives have shed light on the business strategy surrounding the Xbox One, which will be sold at cost or with a small profit margin as soon as it arrives on store shelves. The company also intends to improve inventory management as the holidays approach, stocking shelves with enough consoles to support last-minute walk-ins on launch day, while the Xbox Live Rewards program has been refreshed with cash payouts and other incentives.

"The strategy will continue which is that we're looking to be break even or low margin at worst," said Microsoft's Yusuf Mehdi, speaking at the Citi Global Technology Conference, as quoted by DailyTech. "And then make money selling additional games, the Xbox Live service and other capabilities on top. 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."

In a separate interview with Game Informer, Microsoft Studios VP Phil Spencer voiced optimism about the number of units available at launch. The company wants to enable "parents who don't think about pre-ordering electronics" to find an Xbox One in a brick-and-mortar store at launch.

"There might be a line, but I don't want it to be that if you didn't pre-order in September, you can't get one. That doesn't feel like a great consumer experience."

As part of the ramp up to the One launch, the Xbox Live Rewards program has been reworked to accumulate real cash value. Gamers still earn credits for various achievements and membership renewals, however the credits are converted into local currency and deposited into the user's Microsoft account.

The Xbox One is set to ship on November 22, with prices starting at $500 for the basic bundle.



By Electronista Staff
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