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Squilliam on 12 September 2008
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drkohler said:
mrstickball said:

If you feel I'm wrong, provide a rebuttal rather than claiming what I say is 'garbage'

As for Arcade profitability. We haven't seen any hard-fact statements since iSuppli deemed that the Arcade was being made for around $280, plus cost on the new free memory card plus games packed in with each Arcade.

If you follow Moore's Law for gaming systems (as you should), then the Arcade should be getting produced for around a cost of $140 USD + 512MB Card and Games (lets factor in a high estimate of $155). So $155 + Misc expenses such as shipping, and other costs. So from my perspective, it's hard to see how the Arcade isn't breaking even, or making Microsoft a little profit too.

Please do not abuse Moore's law to figure out manufacturing gadgets costs, it makes you look really dumb as it has absolutely nothing to do with it. Here are the rough manufacturing costs for you favourite gadgets (now in production, assume +/- 10% for the sake of not arguing about a few $ and c):

PS3: ~$400

PS2: $90

XBox360 Arcade: $250

XBox other models: $290

Wii: $130

If you think that MS can sell the Arcade Model for under $200 and make profit, you are seriously wrong. Not to get drowned in losses, the trick is obvious for the arcade model: sell the necessary stuff (hd) at hightly inflated prices to cover some ground

And before we go into the "who are you to quote numbers" replys, I'm not going to answer any or reveal my sources, just take it as gospel or dream on.

I fixed your PS3/Wii prices because its unlikely that the Wii costs the same amount as the PS2 as it employs more advanced technology and some more expensive motion controls. Also it was stated recently that the PS3 was still losing money on every console sold.

For the Xbox 360 prices you have to remember that its fixed + variable cost. If they sell 10% more systems then the fixed cost goes down ~10% per system. As the Xbox 360 has increased its sales over last year then obviously the fixed cost per system is reduced.

Xbox 360 Jasper Variable cost reductions.

Components

  • Simpler power supply
  • Reduced cooling expenses
  • Reduction in the cost/quantity of power regulation components on the motherboard.
  • Reduction in the cost of manufacturing the GPU/Memory

Manufacturing

  • Simpler to manufacture mainboard with fewer defects on average.
  • Reduction in the number of trace lines/solder points.

Support

  • Lower failure rate within the 1/3 year warranty periods.
  • Reduced cost of logistics and call centre costs for people calling in to complain.

So likely a Xbox 360 Arcade produced under the Jasper specification is likely costing Microsoft a lot less overall than the Falcon specification.

 

 



Tease.