Microsoft, one of the biggest players in the gaming world, is facing significant cost pressure on the hardware side. According to information shared by Jez Corden, the company loses approximately $150 on every Xbox Series X and Series S console sold.

Despite adjustments in console prices, the high cost of memory and RAM makes it difficult for the company to achieve its profitability goals. Microsoft is continuing its efforts to overcome this cost pressure and focus on next-generation technologies.

Next-generation console development accelerates

The company is currently actively working on a next-generation Xbox console codenamed Project Helix. Sources estimate that the selling price of this new device will not be less than $1,000.

The release date for the new console is indicated as the end of 2027 or the beginning of 2028. Microsoft aims to reshape its hardware strategy with this new hardware.

Supply Chain and Cost Crisis

Xbox CEO Asha Sharma and Matt Booty, in a joint statement last month, drew attention to significant problems in the supply chain. Sharma stated that the prices paid for storage components have doubled compared to last fall and that these costs continue to rise.

Sharma stated that while planning for the 2027 holiday season, they expect component prices to increase by more than five times compared to two years ago, and emphasized that memory costs are following a similar upward trend. Company management acknowledges that they are more affected by the component crisis than their Competitors in the sector due to strategic choices made in recent years.

Due to these supply shortages, Microsoft is unable to produce consoles to the extent demanded by gamers. The component crisis across the sector is the most significant factor directly limiting Microsoft’s production capacity.

What are your thoughts on Microsoft’s cost problems and its new console strategy?