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Cost of revenue decreased $103 million or 10%, primarily due to decreased Xbox 360 platform costs, offset in part by increased royalties to partners related to increased Xbox Live transactions," the company noted.

This means that 360 console cost to produce dropped upwards of $50 per console compared to a year ago. $103 million divided by 2.1 million consoles. Yes all of it isnt Xbox but primarily it is.



Its libraries that sell systems not a single game.