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Blappo on 03 December 2008
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TheBigFatJ said:

No one outside of MS knows for sure, but here is a likely scenario:

- They lose money on the Arcade unit (probably about $90)
- They approximately break even on the Premium 60GB unit
- They make money on the Elite unit (probably about $95)

However, these were closer to accurate estimates before the price drop. Microsoft could very well be losing money on each 360 sold on average.

The Arcade, Premium and Elite all cost about the same to manufacture.  The Premium has a hard drive, which is probably $10-$20 for MS to purchase, the Elite comes with a larger hard drive which likely costs exactly the same as the Premium's drive, and it comes with an HDMI cable which costs about 50 cents or a dollar for MS. 

So expect quite a loss on the $200 unit and quite a profit on the $400 unit.

The relative cost difference between a Arcade and a Pro is probably $60.  MS is getting good deals on HDD but for $20.  Online retailers with razor thin margins are selling the smallest 2.5" HDD for about $50.  MS cost is probably $35-40.  The Pro model also comes with a headset and network cable which may add $3 to the cost.

I agree that the cost of the Elite models are probably only $5-10 more than the Pro.  The Pro is probably near the break even point (+/- $10) but that is just a guess.