Each Xbox 360 Costs $715 to MFT?

[Nicked]

This is definitely bullshit, IMO of course.

That would be a billion dollars lost by March next year. Another $3B by years end if they can't scale back costs. Theres no way they reduce manufacturing costs by $300 in even 2 years (and they might have to drop price to remain competitive in that time). They would be looking at a loss bigger than the original Xbox (much, much bigger). MS doesn't bleed money like that needlessly.

 

[Phil]

I think it's safe to assume that $715 (if the number is accurate) are variable and fixed costs combined and an indication what it would be costing them currently in this stage of the manufacturing process. Having said that, that price can vary greatly depending on various factors and can't be used as an accurate basis for another competitors costs since that competitor (Sony) is likely to have different deals (higher quantities?) with contractors as different internal manufacturing costs, risks, margins and royalties.

 

[inefficient]

I can pretty guarantee that the original report said something a long the lines of "the xbox360 costs $450-715 to make." and they took the just one number and ran with it. A very common media spin tactic.

 

[tahrikmili]

This is definitely bullshit, IMO of course.

Sorry, just had to point this remark was funny as hell

 

[Nite_Hawk]

This has got to be BS. There is no way MS could sell the unit at $300-400 with manufacturing costs being that high.

That's like a ~300-400 million dollar loss in the first couple weeks of shipments!

Nite_Hawk

 

[expletive]

Well whatever it costs now, it seems they still expect it to be profitibale in 7 months:

http://arstechnica.com/news.ars/post/20051228-5862.html

 

[dubyateeeff]

In regards to the highlighted part: it is my understanding that retailers make no money on the consoles themselves, and often take a loss on each unit, roughly a few dollars. This is part of the reason why bundling is pervasive...

.Sis

Really? I think I can buy that... and so I guess they make money on the peripherals. But for how long do retailers take a loss? I think retailers are making money of PS2 consoles by now.