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Xbox 360 – Microsoft’s loss, your gain

November 23, 2005

Apparently if you’re a determined Microsoft hater, you can do your part to hurt the evil empire by buying an Xbox 360 (if you can find one *)

According to BusinessWeek, Microsoft is losing a heap on each unit. The old joke used to be “they’ll make it up in volume”, but of course there wasn’t much volume to be had today…

An up-close look at the components and other materials used in the high-end version of the Xbox 360, which contains a hard drive, found that the materials inside the unit cost Microsoft $470 before assembly. The console sells at retail for $399, meaning a loss of $71 per unit — and that is just the start.

Other items packaged with the console — including the power supply, cables, and controllers — add another $55 to Microsoft’s cost, pushing the loss per unit to $126. These estimates include assumptions that Microsoft is getting a discount on many components.

Of course, the bet as always is that they’ll make it up on game licensing, which is probably a pretty safe assumption.

* Want to know how to drive a 22 year old nuts? Throw him a credit card mid-afternoon on launch day, and tell him to run out and buy the latest greatest game machine 🙂

It would have been even more of a hoot if I hadn’t been footing the gasoline bill…

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One Response to “Xbox 360 – Microsoft’s loss, your gain”

  1. Michael Wales on November 23rd, 2005 7:54 am

    Every console in history has been sold at a loss, the developers make it up with the software and peripherals. Betaflow.com Technology News just released their first podcast in which I spoke on this topic for a good portion of the show. Feel free to check it out and let me know what you think!

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