Dead console walking?

[Dodece]

You are never going to have concrete production costs provided by the manufacturers. They treat them as corporate secrets. Worse yet they are never going to leak due to the spread out nature of manufacture. Few are privy to all the figures. You may get a piece here or there, but your never going to see the entire picture.

What we are left to work with are precedent, deduction, and calculation. They are not necessarily very specific, but they can get you fairly close to the actual figures which are changing all the time. We have a good estimation of how quickly manufacturing costs decline over time. How much the given components cost wholesale. We can even parse statements out to verify our range.

That all said its fairly safe to say the 360 is being sold at a profit, but I wouldn't wager that it is a large profit. I would say it averages out to twenty percent. With the Arcade probably making less then ten percent, and the Elite probably closer to thirty percent. Then you also have what are called the secondary streams. Those are subscriptions, accessories, licensing, and advertising. So there is really very little doubt that Microsoft on average has probably made money for every machine they have sold.

You can even find proof of this in comparative analysis. The PS3 launched in the United States for six hundred dollars. Today it is four hundred dollars, and Stringer says the machine isn't quite breaking even on manufacturing costs yet. No matter how you parse it that means Sony was able to cut the cost of their console by almost two hundred dollars off of the retail price, and as we all know its basically a matter of precedent that even at that price the PS3 was being sold at a significant loss. Billion dollar losses have to come from somewhere after all.

Even though Microsoft hasn't taken a cutting torch to their console. You have to at least expect them to have matched that performance with an additional year of manufacture under their belt. So it is safe to say even if your extremely pessimistic the 360 is profiting off of two of the models. Which make up the majority of their sales.