Microsoft loses money on Xbox consoles, here's why. Why would companies purposely lose money on a product? Well, there's a business strategy called "Loss Leading. In this strategy, a business sells a product or service below cost to attract customers and increase sales of more profitable items. The goal is that the initial loss will lead to greater profits. For example, printers are fairly inexpensive these days and companies like HP have no problem losing money on them. They make their money fr