Retailers Demand PSP Price Drop

[Sintinel]

kber81 said: Sintinel said: Actually, MS broke even on the 360 about 9 months ago, and have been making a profit on them since a little after that. "The PS2, meanwhile, long ago turned profitable as component prices have plunged and development costs have been written off. Even at $130 a pop, Sony earns about $8 on each PS2 it sells, compared with an estimated loss of $250 per PS3. (Nintendo is believed to break even on the Wii, while Microsoft takes a loss on the Xbox 360.)" - Source - December 28 2006

http://arstechnica.com/news.ars/post/20061116-8239.html

It's a gloomy picture, but there is light at the end of the tunnel. When iSuppli tore down an Xbox 360 around this time last year, the firm estimated that Microsoft was losing $126 on each 360 sold. Microsoft is whistling a much happier tune now. Revised component costs for the Xbox 360 indicate that costs have dropped to the point where each $399 Xbox 360 sold costs $323.30 to make—leaving Microsoft $75.70 in the black on each system, before marketing and other costs are figured into the equation.

November 16, 2006 This source is credible enough to be used for Wikipedia's article on the Xbox360.

The strategy of selling a console at a loss or near-loss is common in the console games industry, as console makers expect to make up the loss through game licensing. Since Microsoft owns the intellectual property rights to the hardware used in the Xbox 360, they can easily switch to new fabrication processes or change suppliers in the future to reduce costs. Thanks to streamlined processes and ample component supplies, a report from iSuppli released on November 16, 2006, estimates the total cost of components in the premium bundle is US$323.30.