It costs $525 to make an Xbox 360

[DCK]

That's right (http://www.xbitlabs.com/news/multimedia/display/20051123214405.html), the Xbox 360 premium package costs Microsoft 525 big ones (without distribution costs and such), while they sell it for $400. The main culprits are the CPU and GPU, totaling both at a whopping $247.

http://www.xbitlabs.com/images/news/2005-11/xbox360_bom.gif

This is quite serious though - if parts are THAT expensive, it's going to be really difficult for Nintendo to bring the Revolution close to the 360, especially if they're aiming for $250 pricepoint.

Not only that but a pricecut for the 360 is pretty far away now :(

[Twilight]

Nah... Nintendo knows how to make powerful and small console with nice price tag. Just look at GameCube. It costs 99€ with controller and game but Nintendo still makes profit with it. That´s pretty amazing concidering it´s almost as powerful as Xbox.

Revolution won´t be a powerhouse comperd to 360 and PS3 but games will look good. Very good. That´s my prediction.

[MunKy]

Nintendo will get results on par with 360 more efficiently and at a cheaper price. Just like with Cube. Microsoft are so lucky they have one of the richest men on earth as the owner. No normal company would survive selling at losses like these.

[Hellfire]

Shouldn't this be in other consoles? Anyway, it's a matter of creating an efficient machine and Nintendo excels at that, so I wouldnt be afraid.

[Caris]

dsnt really matter as they make millions per minute...

[Pit-Jr]

MMMM.....margin pie

[AshMat]

Oh well, they're sellnig plenty of them by all accounts and a lot of people in the uk want them.

Wrong forum by the way

[Sarka]

a loss of $125?! Wow... Nintendo will hopfully get the Revo down to $250 and make a profit. Remember that the GC is Nintendo's console that makes them the most money per unit, so they can probably make them for around $70-$80. If they can do that thenm surely they can get the Revo down to $250... surely.

[nicolasmasset]

look at GameCube. It costs 99€ with controller and game but Nintendo still makes profit with it.

Mmm, you think? I thought I heard I don't know how long ago that gamecube finally started losing money when they entered the realm of deals like the 99 a set. I don't think nintendo still makes a profit for a console that costs 99-60(game) = 40€ :red:

[Twilight]

Mmm, you think? I thought I heard I don't know how long ago that gamecube finally started losing money when they entered the realm of deals like the 99 a set. I don't think nintendo still makes a profit for a console that costs 99-60(game) = 40€ :red:
It´s true that Cube made lost for a while after the price cut but it was just temporary.

Nintendo doesn´t make unprofitable consoles. They propably would if they had as much money as Microsoft but unfortunately they don´t have.

[Shorty]

Can some draw up a graph to show how long it would take, theoretically, for Microsoft to go bankrupt.

[The3rdChildren]

Millions upon millions of years. It isn't like they can't afford the loss, and besides... who cares? I only care about how much I'm paying for this little baby.

[Jordan]

Millions upon millions of years. It isn't like they can't afford the loss, and besides... who cares? I only care about how much I'm paying for this little baby.

Make that billions and billions and billions. Microsoft's annual profits are in the region of $190 billion. I doubt they will be going bankrupt any time soon.

[demonmike04]

Jordan's right, Microsoft wont go bust for a LONG LONG time, maybe never.

But what people have missed is the fact that when you buy wholesale (Etc a whole batch of harddrives) you will actualy get them far cheaper than if you bought a whole batch seperately, many of you will know this, but im pretty sure Microsoft has something like this going on.

If it still equals to a loss, good luck to Microsoft, thats $525 for $400, and people sell on ebay easily over the $600 mark, maybe Microsoft should do a rethink about their strategy?

[Shorty]

It was just a joke kids :) I use Windows faithfully - so why would I be wishing on that turn of events? :p

[Schpickles]

a loss of $125?! Wow... Nintendo will hopfully get the Revo down to $250 and make a profit. Remember that the GC is Nintendo's console that makes them the most money per unit, so they can probably make them for around $70-$80. If they can do that thenm surely they can get the Revo down to $250... surely.

Every single console is sold at a loss initially - even the GameCube was sold at about a $25 loss when it first came out.

The idea is the hardware vendors make all that money back through the licensing fees on games (which are substantial, and effectively pure profit). Additionally, over time, the parts can be condensed into smaller units and items can be amalgameted (e.g. the PSOne and the Slimline PS2 both had all of their earlier console versions' silicon condensed onto one chip), whilst many of the component parts will also come down in price. So in the long term, the console will probably be sold at around the breakeven point. In Nintendo's case, the hardware itself often turns a profit as well, over time.

MS and Sony are packing as much as they can into their consoles whilst turning a decent profit in the long term (over 4 or 5 years). The business model shifts over time, as the consoles move towards break even point (at which point platinum ranges are often introduced). With the cost of manufacture falling, this also enables price cuts, and a shift towards different sections of the market (i.e. not just hardcore gamers).

[Darv]

I'm confident Nintendo can produce and sell the Revolution at a better price. I was looking at 360 accessories and saw the wireless adapter was £60! The DS has a much smaller wireless adapter built in and in total it only costs £90.

[mike-zim]

i really dont care how much they cost to make i just care how good it is to play and the 360 has not attention from me what so ever.

i would have thought at that price they would be a bit more reliable though. i heard somewhere that there were loads returned in america because they were faulty. rushed production was blamed.

[Kurtle Squad]

I don't think they're that bothered. They get pleanty of money from the software sold.