Some "answers":
1. R&D expenses are for the whole division - which last FY end Jun 08 totalled almost $1.6 Billion. So that is a lot of R&D - granted for the whole division.
Contrast that to Nintendo - $300 million only. So on just sheer numbers, the EDD division spends so much more on R&D. Relatively, it is even bigger, since Nintendo Revenues are much higher than the EDD division.
If you speculate that most of that R&D is for the Zune, Windows Mobile, etc.., then the XBox Platform is actually now "quite profitable".
Hence, MSFT can really afford those price cuts. Think about it, XBox Revenue comprised 71% of the EDD last FY.
If you proportionally allocate the R&D - then XBox spent about $1.1 Billion on R&D alone.
I don't know for sure, but that number sure sounds like a lot, just for the XBox Division.
More than likely, more R&D is allocated to the other segments like Windows Mobile (Danger), IPTV, etc.
Because if you think that R&D for XBox is $1.1 Billion, then either they are already researching the next XBox or some other gaming device.
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