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Kyyle23

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http://www.gamespot.com/news/6140383.html

 

Microsoft taking $126 hit per Xbox 360

 

BusinessWeek commissions study, which says the software giant is paying a premium on next-gen hardware.

 

When Microsoft got into the console game in 2001, much was made of the fact that it lost an estimated $125 per console on each Xbox. Four years later, that per-console-hit has tallied to $4 billion of red ink for the Redmond, Washington-based software colossus, whose current-fiscal-year forecast calls for $44.5 billion in revenue.

 

However, Microsoft seemed all too happy to fork out billions to become the number-two console maker in the world. The approximate 22 million Xboxes it has sold surpasses Nintendo's to-date sales of over 16 million GameCubes--but still lags far behind the 90-million-plus Sony PlayStation 2s in homes worldwide.

 

Now, it appears that history is repeating itself. According to a study commissioned by BusinessWeek, Microsoft is again losing around $125 per hard-drive-equipped unit of its brand-spanking-new console, the Xbox 360. To perform the study, tech researcher iSuppli took apart an Xbox 360 and examined the cost of all its components. It concluded that the hardware of each unit cost $470 disassembled. That means Microsoft loses $71 before each HDD-equipped 360 console goes to the factory, right around the $76-per-unit loss analysts predicted for the core Xbox 360, which has no hard drive, back in June. (Those same analysts also predicted shortages of the console, which then was believed to come in only one model.)

 

However, when iSuppli said the HDD-equipped 360 console cost $470, that's exactly when they meant--just the console itself. They didn't include the cost of the wireless controller, headset, Ethernet cable, universal media remote, combination high-definition component/standard A/V cable, and bricklike power supply that come in the box of the $399 Xbox 360 "Premium Pack." Factor those in, and Microsoft's per-unit-loss on each Premium pack comes to $126--just above the per-unit loss of the original Xbox--before one penny (or, more likely, yuan) is spent on labor.

By Tor Thorsen -- GameSpot

Posted Nov 23, 2005 1:32 pm PT

 

Bill Gates must REALLY want people to buy this machine

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QUOTE(Spiff @ Nov 25, 2005 -> 04:33 PM)
They make it all up on software.

This remains to be seen.

 

 

Costly games will now cost around 10 million dollars to make, nearly double that of what it was with XBOX/PS2/GCN.

 

Games are only 10$ more too.

 

I just don't think they will be able to compensate.

 

 

It seems Microsoft is just trying to be the industry leader with the 360, rather than try to make money off it as it stands. And if one company could afford to do it, it is Microsoft.

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QUOTE(Buehrle>Wood @ Nov 25, 2005 -> 01:05 PM)
Sony is going to take a 300$ hit per unit sold with the PS3, after announcing they will go ahead and luanch it at 400$.

Looks like I'll be sticking with Nintendo and their 200$ unit.

We are the Knights of the Revolution.

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QUOTE(southsider2k5 @ Nov 25, 2005 -> 11:32 AM)
They make it all back in spades on the games.

 

 

Tell that to the fellas who created Sega Dreamcast :P :D

 

Great Games + Great System dont always = Great Money Maker.

 

I also know that if any company could absorb that kind of hit, it would be Microsoft. It cannot be pleasing to them to know that both times they launched a console, they took the same hit.

 

QUOTE(3E8 @ Nov 25, 2005 -> 01:09 PM)
We are the Knights of the Revolution.

 

Im part of this club!

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QUOTE(kyyle23 @ Nov 25, 2005 -> 04:59 PM)
Tell that to the fellas who created Sega Dreamcast :P  :D

 

Great Games + Great System dont always = Great Money Maker.

 

I also know that if any company could absorb that kind of hit, it would be Microsoft.  It cannot be pleasing to them to know that both times they launched a console, they took the same hit.

Im part of this club!

 

Sega didn't sell Dreamcast games because people figured out how to rip/download/burn them.

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QUOTE(3E8 @ Nov 25, 2005 -> 01:09 PM)
We are the Knights of the Revolution.

 

Can I join?

 

 

Sega didn't sell Dreamcast games because people figured out how to rip/download/burn them.

 

:D

 

I was soo happy when my friend sold me a used Dreamcast and about 15 ripped games (NBA 2K and World Series included :D )for 15 bucks (memory didn't work). Sadly, I left it on accident when I moved out of my apartment.

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QUOTE(Buehrle>Wood @ Nov 25, 2005 -> 10:09 AM)
It seems Microsoft is just trying to be the industry leader with the 360, rather than try to make money off it as it stands. And if one company could afford to do it, it is Microsoft.

"It seems Microsoft is just trying to be the industry leader with their internet browser, rather than try to make money off it as it stands. And if one company could afford to do it, it is Microsoft."

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QUOTE(Spiff @ Nov 25, 2005 -> 11:32 PM)
no...

 

Whatever. My buddies were ripping gamediscs and modifying their PS1's before Dreamcast came out. Dreamcast was a poorly launched system, they didnt collapse because their games became downloadable.

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QUOTE(kyyle23 @ Nov 26, 2005 -> 09:47 AM)
Whatever.  My buddies were ripping gamediscs and modifying their PS1's before Dreamcast came out.  Dreamcast was a poorly launched system, they didnt collapse because their games became downloadable.

 

Modifying, yes, so they could play games from Japan. Nobody even owned cd burners when the PS1 was around.

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