The console transition will be expensive for both Microsoft and Sony, but somehow, the Xbox One is expected to either breakeven or see a small profit early on in its life. That’s according to Xbox chief marketing and strategy officer Yusuf Mehdi, who revealed Microsoft’s current strategy at the Citi Global Technology Conference.
"We're looking to be breakeven or low margin at worst on hardware and then we make money selling additional games, the Xbox Live service and other capabilities on top,” he said (via CVG). "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."