Microsoft executive Yusuf Mehdi claims that the firm could break even and possibly make a modest profit on the Xbox One when speaking at the Citi Global Technology Conference. Here's what Mehdi had to say.

"The strategy will continue which is that we're looking to break even or low margin at worst [on Xbox One] and then make money selling additional games, the Xbox LIVE service and other capabilities on top."

Mehdi also made references to possible lower cost Xbox One prices in the future.

"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," Mehdi said.

It's no surprise that Mehdi said Microsoft will offer price reductions on the Xbox One. However, the question is whether a price reduction will come on the $499 base model Xbox One, or whether Microsoft will look to lower the price of future Xbox One models. Considering that the Kinect is no longer required to use the Xbox One, we wouldn't be surprised to see Microsoft offer a version of the Xbox One that omits the Kinect prior to the Xbox One release on Nov. 22. Microsoft has given no indication that they plan to do such a thing, but clearly Microsoft has no problem changing direction and policy with respect to the Xbox one. Their reversals pertaining to used game and DRM policies are clear evidence of that.

What do you think? Are you surprised that Microsoft is expecting to at least break even on the Xbox One? Do you think they'll reduce the price of the Xbox One before launch, or will Microsoft simply make and offer cheaper models in the future? Sound off in the comments below.