| nightsurge said: Microsoft Kinect: Reports have been coming in that the components of Kinect cost just $56 total. Now granted this is not the entirety of the costs. There are also production costs, shipment costs, packaging, etc. The breakdown of all those costs, however, I would estimate to be no higher than an additional $20 per Kinect. That adds up to a total production cost of just $76 per Kinect. Kinect Retail Price: $149. Now I'm sure some of you will want to say "But the Retailers get a cut so the price MS sells them to retailers is lower!" and you would be absolutely right! However, unlike most accessory markups, Kinect is seeing more similar to Console Markup rates. According to a distributor that handles many electronics, video games, computers, etc. D and H, the cost per Kinect for their account holders is $138 per Kinect. Granted, I'm sure this drops if you are ordering them in the alotments of hundreds to a thousand per shipment. I would venture to say at most, though, you would be getting a Kinect for around $125 per unit. That leaves the total profit per Kinect sold to be ~$50 USD. Summary: To wrap this up, Microsoft has been making strong profits for the last 2 fiscal years even during heavy Kinect R&D times. With the costs of production so low and profits per item so high, it would seem very plausible that Microsoft is in the perfect situation to have competitive price cuts in 2011. I am not forgetting the massive $500 million ad campaign for Kinect. I have no idea if this budget comes from EDD or another section of the Microsoft quarterly reports. Even with that massive budget, after 5 million Kinects we would be at $250 million profit already..., |
what? so you say costs are $75 and they get $125 right? so $50 profit.
then you say they make $250m profit with 5 million sold kinect?
5m kinect x $50 profit = $250m profit
$500m ad campaign - $250m profit = $250m loss after 5m sold kinect!
and you forget taxes (in germany like 30€ for the 150€ retail price), development and operating costs like the service (more people for call center, warranty)
ah yeah kinect adventures costs a little bit as well to develop and produce.
sry if i dont understand you because english isnt mine but i think your calculation is a big fail.
