Microsoft has now confirmed the price and release date of both of its upcoming next-generation consoles, the Xbox Series X and the Xbox Series S. The Xbox Series X will hit $499, while the Xbox Series S comes in at a more affordable $299. And if those seem like very competitive prices for next-gen hardware, that's potentially because Xbox is going out of its way to offer great prices. An unsourced report says that Xbox is going to be taking a loss on the sales of both consoles.

The rumor comes from Venture Beat reporter Jeff Grubb in response to leaker/insider Benji-Sales on Twitter when asked if Microsoft is taking a loss on the Xbox Series S. Grubb replies in the affirmative but doesn't provide a source for his information, and he explains that Microsoft is taking a loss on both the Xbox Series X and the Xbox Series S. He also notes that "it seems like" Microsoft is taking a bigger loss on the Xbox Series S comparatively.

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The idea is that Microsoft is discounting Xbox hardware for the next generation below what it costs to manufacture the consoles. This will get more consoles into game players' homes faster, allowing Microsoft to earn more through game purchases and other assorted revenue opportunities. For example, getting people to subscribe to Game Pass or having more Xbox console users buy Fortnite microtransactions leads to additional revenue.

Selling consoles at a loss isn't a new strategy in the console business, of course. In fact, almost all video game consoles are initially sold at a loss, as that's how console makers are able to offer console hardware comparable to PC hardware that comes similar or bigger prices. These strategies are proven to help build consoles' install bases in the early months of a console's release. Then, over time, console makers are able to improve production efficiency so that their loss decreases.

Obviously, Grubb's news is just a rumor until more information is shared by Microsoft. Nevertheless, selling the new Xbox consoles at a loss was always expected. Xbox lost a lot of ground in the PS4 and Xbox One generation, ground that it hopes to regain in the next generation, so making the new Xbox consoles affordable was likely a huge priority.

The question remains whether or not Sony will match Microsoft's efforts. Sony is much better positioned going into the next generation of consoles and could decide not to sell the PlayStation 5 at a loss. But that would probably mean the PS5 would be more expensive than the Xbox Series X, which would make the next several years very interesting.

The Xbox Series X and Xbox Series S launch on November 10.

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