November 23, 2005
Xbox Losing Almost $200 Per Xbox 360
A research firm says Microsoft is probably losing almost $200 per Xbox 360 sold these days if you add up all the component costs. Never mind the cost of marketing and distribution. Don't feel bad for Microsoft though, they make billions of profits from the OS and Office to subsidize our gaming habits.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.
