Xbox 360 costs $715 to make

[Jared Moya]

Earlier numbers by Business Week may have reported that Microsoft is losing $126 on every Xbox 360 sold. That figure is now believed to be a bit higher by some. According to Insider Scoop, the world's largest software maker is losing upwards of $300 per console sold. From the article: "A high ranking friend at IBM, one that worked on the Xbox 360 chip design, tipped us regarding the real expenses involved in manufacturing the Xbox 360... 'It costs Microsoft approximately $715 to make, the manufacturing costs are still too high, another reason why they’re producing relatively small quantities.'”

READ ARTICLE (http://www.joystiq.com/2005/12/28/xbox-360-costs-715-to-make)

[pimpinaman]

...ahhh they will sell more 360s when folks get the box hacked...

[crackerjacker]

microsoft will make their money back by selling the games *probably already made enough money for that already*.

everyone makes money off of this.
blockbuster might sell the new xbox games package deal for unlimmited rentals, they do that with some other console platforms already.

all about making money
bwhahaa

[mountain_rage]

Im still not impressed with the system, ive been playing games on my pc for about a year now that look just about as good as games on the xbox 360. I dont even have a gaming pc. Quite frankly if thats the amount of money they are loosing microsoft is just stupid. That means for every system they need to sell about 15 games to break even. Assuming they only make 20$ a game.

[bongedfury]

Microsoft also lost money on each original Xbox. Reckon they can afford it though...

[Lord_of_the_Dense]

I just realized that 360 x 2 = 720.

That is almost $715.

<eerie music>

[boogiedan]

im staggered at the cost-- I knew they were expensive 2 make
but no where near that price

Im wanting one more n more now
i personally think that the games look awsome
nice thread

[Auggie2k]

A little off topic but it costs Volkswagen £5,000,000 for every Bugatti Veyron they make and they sell it for £830,000.

Why? They only built that car (1000HP with four turbochargers) to prove that it can be done. That's a lot to be wasting.

[shawners]

Actually licensing software companies to make it, then xbox live will draw in money, third party hardware will bring some in, xbox is a trademark and can license to what ever developer, plus their own games that they publish, it will be awhile before they make money, but when you manufacture 1000's of xboxes, the cost of making them does go down, the parts they are using will cost lower after they get out dated.

[Auggie2k]

Yeah of course, mass reproduction.

[Atheist Icon]

A little off topic but it costs Volkswagen £5,000,000 for every Bugatti Veyron they make and they sell it for £830,000.

Why? They only built that car (1000HP with four turbochargers) to prove that it can be done. That's a lot to be wasting.

They will make a lot of that money back when you can only buy their parts...Its a 1006 HP W-16 with 4 turbos....oh jeebus is it beautiful...if i only had the 1.2 million for it...

anyway, MS will be making their money back when you buy the remote to control DVD's, the wireless controllers, blah blah...and they are planning to sell an external HD-DVD player for it soon...and after that, the blue-ray DVD player...

[kokanezub]

trust me what ever they are doing they know wut is going on. Its ol billy gates he wipes his ass with 100's i mean would it hurt him if he gave me 500$ it would be like throwing a napkin away to him. I heard he drives a saturn

[Auggie2k]

They will make a lot of that money back when you can only buy their parts...Its a 1006 HP W-16 with 4 turbos....oh jeebus is it beautiful...if i only had the 1.2 million for it...

anyway, MS will be making their money back when you buy the remote to control DVD's, the wireless controllers, blah blah...and they are planning to sell an external HD-DVD player for it soon...and after that, the blue-ray DVD player...
It is unbelievably beautiful yes. It was on Top Gear a couple of weeks back and I was just in awe.

Peripherals always make back a lot of money. The Xbox costs $715 but you need a lot more that just the Xbox to use it.

Ok there's cables, hard drives, wireless controllers, string, remotes, games, cooling systems, string, dvd players.

Did I miss something?

[Potato]

Electricity.

[cjules13]

MS just broke even recently on XBOX 1.

[broadwayrock]

MS are no where near breaking even on the xbox. They are about $4 billion in the red for it.

Their target is to break even on the 360, which is a bit optimistic.

[cjules13]

Here's an article about xbox in the black...

http://www.theregister.co.uk/2005/01/27/microsoft_fy2005q2_earnings/

[broadwayrock]

That article is stating that Microsoft made a profit which is very different from breaking even.

Say for example that if Microsoft spent $1000000 in manufacturing the xbox hardware and sofware in the month of January and then made $1000001 through the retail of selling the hardware and software, they would be making a profit (allbeit of $1).

Microsoft has spent Billions of dollars into developing, marketing and selling the xbox. The total spent is far higher than the money they get back from retail.

This is an article/ interview with Microsoft's chief Xbox officer Robbie Bach:

'He confessed that the Xbox hardware has never broken even over its lifespan, but argued that this has been something that Microsoft had planned for from the outset.

"We didn't design the hardware to be a break-even endeavour over the life cycle, we designed it to be the most powerful console, and to have an impact," he said. "We think it did that successfully, and it just required us to fund that. Now with Xbox 360 we have the opportunity to make that investment pay off. "

http://www.gamesindustry.biz/content_page.php?aid=12104

My theory is that Microsoft is trying to use the Xbox/Xbox 360 as a trojan horse to get a Microsoft branded machine with Microsoft software in every household that can control every aspect of the house: Entertainment equiptment, kitchen appliances, heating etc. Just think of the amount of money they could make through advertising revenues that come from other companies.

They are willing to make losses in the short term if they win control of every household's living room.

[Jim Morrison]

Quit Crying, Gates Donates more money to charity and aids shit than anyone on the planet.

[Auggie2k]

So I'm pretty sure the PS2 broke more than even yes?

It still sells like hot potatoes!

[cjules13]

I stilll think they are making profits and breaking even on xbox 1 as of 2006.

[Atheist Icon]

So I'm pretty sure the PS2 broke more than even yes?

It still sells like hot potatoes!


Thats because the first gen PS2 would have problems reading the disc(laser problem)..then later generations wouldnt be able to read the blue discs, so you would have to have 2 PS2's. 1 older one to read the blue discs then another one to read the new discs...now, some of the earlier gens ps2 cant even read some of the new new games coming out for ps2. I know, because I cant play games from GT4 on...I have a PS2 that I bought about 6 months after its release...had to replace the laser...

The thing with sony is they like to make you buy certain products multiple times. No company is perfect...they are out to get your money and they will do what they can, i.e, xbox controllers cannot be used to watch movies.