LordTheNightKnight said:
BTW, how profitable is Kinect so far? The $500 million marketing campaign, hardware costs, budget for the controller R&D, and budget for Kinect Adventures likely cut a bit into how much each sale made, and that's assuming Microsoft sold it at a profit (they better have, or else they would be in big trouble).
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Profitable? Well that depends on how you look at it to be perfectly frank.
Heres a pro tip from the mouth of an engineer working at Microsoft EDD/Kinect: The largest proportion of cost at launch are the development costs rather than the hardware costs. Considering the fixed costs / non recoverable expenditure before release against the overall game / game console and Kinect revenues since they are all interlinked I would say that the gross margins would be extremely good but the operational margins would probably range from negative to average.
Since around 2008 Microsoft and Nintendo have both shared similar philosophies on operating margins. Sony on the other hand has continued to think more in terms of gross margins given the statements about PS3 manufacturing costs when you compare that to operational performance. So that is probably another clue as to what their operational margins may be, personally I will say they're average.