Xbox One S teardown – here’s how much Microsoft is making

The new Xbox One S console is now on sale, at a significantly higher premium than the 2013 original. However, by adding additional power, more storage, an IR blaster and a 4K Blu-ray player it also cost Microsoft a bit more to make.

A teardown of the new console found the 2TB Xbox One S console cost Microsoft an estimated $324 (around £248) to build, while it retails for $399/£349.

That means, according to IHR Markit (via WinBeta), Microsoft has a $75 margin on the console, although you’d have to assume close to all of that is consumed by distribution and the retailer’s cut.

Related: Xbox One S vs Xbox One: Should you buy one?

Effectively, Microsoft is giving the console away in the hope of securing profits through software and subscriptions to Xbox Live Gold.

In better news for Microsoft the new console only cost Microsoft an extra $24 to build, with IHS Markit claiming the 1st-gen model cost $300 to manufacture.

Despite the upgraded innards, Microsoft has been able to make savings elsewhere thanks to the reduced power consumption and smaller casing for the new S console.

Have you snapped up an Xbox One S yet? Or are you waiting for Project Scorpio in 2017? Share your thoughts in the comments section below.