Xbox 360 Production Costs Dwarf PS3's

[doobiwan]

That the article title, I think it's somewhat misleading.
(As in the Author doesn't speak English!)

http://www.next-gen.biz/index.php?option=com_content&task=view&id=5502&Itemid=2

The total cost of producing a 60GB PS3 therefore stands at $840.35 compared to $323.20 for an Xbox 360 Elite. The 60GB PS3 retails at $599 while the Xbox 360 Elite can be purchased for $479

 

[Swift-wp]

Doesn't that mean the playstation is sold at a loss?

 

[GavinMannion]

Yeah most consoles are sold for a loss in the beginning and they make their money back in software sales.

Only the Nintendo Wii went against this tradition...

Microsoft is now in a very strong position as they can cut $150 off the price and still be happy... that must worry Sony

 

[doobiwan]

Which is why it was so important for Microsoft to launch early. Their years lead has put them in the drivers seat. If PS3 starts to impact their plans negatively, they simply cut the cost of the 360, because they can. Sony is soaking up such a loss per unit, they couldn't respond.

The irony, is that it's exactly what Sony did to Microsoft in PS2 vs Xbox 1.

As much as it also makes me go "Oi what about a price cut?", I realise that they're frantically trying to make the division profitable, and it seems to be working for them.

EDIT: Microsoft about to break even http://www.gamesindustry.biz/content_page.php?aid=24765

 

[nocilah]

i heard from a friend of a friend who knows a friend at MS SA that Xbox only breaks even once you buy the XBOX + 3 Games.

So not sure how accurate the article goes and i am not sure if this 3 game story only applies to SA.

 

[doobiwan]

It could depend on when you heard that. But could also be quite true. These production costs of the consoles don't take a lot of things into consideration in the retail price. Namely: Shipping, Tax, Retail Margin. So while the production costs may be below retail, "cost to get it to the customer" may still be at a loss.

Having said that, can you imagine how much more Sony must be losing per unit!

 

[GangStarr]

Which is why it was so important for Microsoft to launch early. Their years lead has put them in the drivers seat. If PS3 starts to impact their plans negatively, they simply cut the cost of the 360, because they can. Sony is soaking up such a loss per unit, they couldn't respond.

The irony, is that it's exactly what Sony did to Microsoft in PS2 vs Xbox 1.

lol Payback is a b!tch