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shikamaru317 said:
Dr.Henry_Killinger said:

Manufacturing costs do not drop that fast.

I'm sure that it's at least down from $397 to $365 in the last year. Pretty sure that 500 GB hard drives are down about $10 in the last year.

Also, like I said in the other post, they're almost assuredly making back anything they're losing on consoles in accessories, game sales, and XBL subs. Many Xbox One accessories are selling for double what they cost to make or more. 

Everything else you said is true. But MFQ costs does not drop anywhere near as fast as that. Especially when considering components like HDDs.

The HDDs in the PS4/XB1 actually cost them around $23 right now. Thats including whatever profit the HDD manufacturers are making per HDD sold to sony/MS. Things like that never really drop in price. If anything, and this is the funny part... they get more expensive. Heres why; a 500GB HDD may be the highest demanded model the OEM provides. Economies of scale means that they are also the cheapest in their range of HDDs that are still in production. When the industry starts demanding bigger HDDs, then their manufacturing floor goes up to say 750GB as their base model. At that point, a 750GB HDD would cost $23. Then the lower demanded 500GB actually becomes more expensive. Thats why you see HDD revisions across the generation for consoles.

Manufacturing costs really only drop when the APU is made on a smaller fabrication process and thus costs less. Or theer is a board revision where certain components are combined...etc. MS would be really lucky if the XB1 costs tehm $10 less to make right now than it did at launch. Another thing to consider is that this is MS we are talking about. Agressive hardware designs or revisions is not their strong point.

Having said that, MS can aford to take a $150 hit if it means boosting tehir market share. Cause they really can't afford to let the PS4 pull away with the generation this early in the cycle. They should jsut hope sony doesn't match their price. Cause I don't se sony not being able to make a $350 PS4 bundle with some of their older first pary tites. Technically nothing stops them from doing that.