Every Xbox 360 loses Microsoft $127
Supposedly, according to someone that doesn’t actually make the console, it costs about $470 dollars in parts to make an Xbox 360. Then you have to pay to assemble all those pieces. All told, that means that Microsoft will lose $127 per console sold.
Personally, I don’t think this is such a big deal. Microsoft has so much money in the bank that they could lose money on every Xbox 360 sold from now to eternity and still put it in their “lost in couch” column on their balance sheet.
Besides, this won’t last forever. I have a feeling that this time around, Microsoft has engineered things so that economies of scale and hardware optimizations will eventually allow them to profit on the console, much like Sony has done with the PS2.
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I sadly can't grow a real beard^^
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Have fun!
November 26th, 2005 at 3:33 pm
It’s the same theory behind any average inkjet printer out there. HP loses money on almost every one if its printers - with the expectation that that lost margin will be made up with one sale of ink cartridges. Microsoft probably is losing money on the xBox 360 but will make it up in accessories, game licenses, etc. They won’t be hurt in the long run…
November 26th, 2005 at 4:12 pm
For sure! Microsoft, I bet, would rather not make a loss on each console sold. Sony has been making a profit on each PS2 sold for quite some time now. That certainly helps with thier bottom line.