Kinect components cost $56 / £34

[DirtyP2002]

kowenicki said:

greenmedic88 said:

scottie said:

I suspecty (assuming that analysis is true) that Microsoft is making a fairly healthy profit margin on the hardware, although that is not overly surprising - accessories have the highest profit margin of MS:EDD products by a considerable margin.

 

Also, isn't there a game bundled for that cost?

Proprietary HDDs, proprietary WiFi adapters, controllers; definitely. Those 1st two are among the most inflated in terms of supply/manufacturer's cost to actual MSRP.

Although I'm still inclined to think profitability on KInect peripherals is second to establishing it as a platform within a platform with the appropriate software sales. 

Call me a cynic, but I more or less believe the initial $149 MSRP is just an inflated price to help pay for the $500m marketing campaign. You're basically paying extra for the advertising that went into selling you the product. 

Thats not cynical, thats common business practice.  Who doesnt do this?  All products cost more early on to pay for R&D, Marketing etc.

 

$600 PS3 sais HI!

I think every single product in this industry has the same pricing-curve. Start expensive, get cheaper later (the direct way - cut the price, or the indirect way - add more stuff).

Somehow MS is the devil if they do the exact same thing.

 

And could we PLEASE get rid of this 500 million marketing stuff? There are some things to consider:

1. MS can afford this and Kinect alone will amortise this
2. It is a budget for a longer period of time
3. It is not unfair business!
4. Sony has two of the mainsponsor slots for the UEFA Champions League (Bravia and Playstation 3) for years now and was the mainsponsor for the Fifa World Cup 2010 in South Africa. That is way more than 500 million USD. Somehow I never see people saying anything against it.
   I found this:
   
   

   (2) Advertising costs:

   Advertising costs included in selling, general and administrative expenses for the fiscal years ended March 31, 2007, 2008 and 2009 were 505,462 million yen, 468,674 million yen and 436,412 million yen, respectively
   
   http://www.wikinvest.com/stock/Sony_(SNE)/Filing/6-K/2009/F3523752
   
   If this is true and I am reading this correctly, 500 million is nothing. Feel free to correct me!