bumidan said:
thanks squilliam. though if that is how much it initially cost, that was back in FY Jun 06. we just finished FY Jun 08 - and by all indications, they should be making a positive gross margin on the consoles, in my opinion.
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But they state in the reports (gotta read the text, not just the numbers!) that they has lower than expected profits becasue they sold _more_ than expected XBoxes last year. They admit they lost money on each xbox unit sold. So they are still negative on the units. They might be positive overall for the xbox ecosystem (ie Live games, etc) bit unti by unti they still lose money.
From 10-k "Cost of revenue decreased $683 million or 13%, reflecting the impact of the $1.1 billion Xbox 360 charge in fiscal year 2007 (which primarily related to the warranty expansion), partially offset by increased Xbox 360 product costs related to increased unit console sales."
Cost of revenue would have went down even more if it wasn't for selling all those Xboxes!
Margins on software are huge, MSFT overall margins are in the 70% range. I would crank up the margins on the software, you have it ~ 50% and set each Xbox unit as break even only - ie $0 margin on the actual xbox.
Trying to convince me the Wii is a real adult game machine 'if you play it right' is like trying to convince me Tofu tastes great 'if you just cook it right'
