Report: Foxconn Vietnam plant ready to produce millions of Xbox consoles for Microsoft

Microsoft's overseas suppliers are ready to produce Xbox consoles in Vietnam, which should improve the negative profit margins for the company's games hardware.

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Xbox consoles are produced at a loss, meaning Microsoft loses money by selling the hardware. Thanks to tariffs and rising manufacturing costs, Microsoft is now losing more money on each console produced than they ever have before. The company tried to stabilize costs by increasing prices for consumers, and Xbox Series consoles faced two separate MSRP hikes in 2025 alone. At the time of writing, there exists an $800 Xbox Series X variant.

Now it seems that Microsoft could pull another lever to help reduce console production losses. According to a new report from Reuters, EV Foxconn is ready to produce up to 4 million Xbox consoles at its Vietnam plant. Microsoft, Sony, and Nintendo have all been moving key parts of their console hardware production cycles to Vietnam in an effort to avoid steep US tariffs on China-made products. This economic disruption has led to each of the Big 3 revising their production orders.

Microsoft's production and manufacturing orders for Xbox hardware remain unclear, especially for the current Xbox Series generation of systems. Xbox is being handily beaten by its competitors PlayStation and Nintendo, with one estimate putting Xbox Series shipments as high as 35.9 million as of the end of 2024. Conversely, Sony's PlayStation 5 had shipped 65.5 million units at the time.

It's possible that this new cycle could also be used to prep for Microsoft's next-generation Xbox hardware, which will instead be a Windows 11 PC that delivers an Xbox console "experience".