taxman said:
NYANKS said:
rocketpig said:
MS will definitely drop the price. They can't maintain sales with only a $50 price drop in 36 months.
It's pure fanboyism to think that the RRoD will affect them that much. They wrote it off in fiscal 2006. It's a done deal. |
Okay, I admit I don't really understand this. Did they write off future repair costs for the next few years. It seems like RRoD is still quite a large problem. Are they not incurring debts on top of the 2006 write off for the still significant amount of failures? |
To make this clear, every company that offers a warranty must set aside money to cover the future warranty cover. This will become part of the cost to manufacture a console and lower the profit margin. e.g If the 16% failure rate is correct than for every 7 consoles microsoft manufactures about 1 will fail and this means that for every 7 consoles sold, it actually costs them 8 consoles (very simplified). The write-off in 2006 was because they didn't set enough money aside for the consoles already sold, not future console sales.... |
Incorrect. The $1 billion is expected to cover repair expenses for the past consoles that will fail and also for the reduced number of recently sold or sold in the future failing consoles.
