greenmedic88 said:
I don't think MS is selling Kinect peripherals at anything even approaching a loss. I know there's been quite a bit of talk from them as to how much they cost to produce, but my gut tells me they would actually be making a pretty tidy profit on each unit sold were it not for averaged per unit marketing costs, which as you've pointed out have been pretty huge. I can't think of anything that any game company has promoted so heavily with special preview events, etc. since Wii Fit. And Kinect promotional efforts have easily outstripped what Nintendo spend promoting Wii Fit so far. |
Im not saying that:
Kinect = $110 ASP - $120 manufacturing costs etc = loss of $10 per unit.
Im saying that:
Kinect = $110 ASP *3M units plus games = ~$600M overall revenue or thereabouts and then you take away $200M in marketing, $100M in product development, $100M research and development and $200M physical hardware costs or thereabouts = roughly break even.
Im just saying that their profit point is early 2011 even though they are likely to sell a lot of units in 2010. In many ways the cost of Kinect is actually beside the point when talking about Microsofts profitability in Q4.
Tease.