drkohler said:
Please explain to me, in detail, why iSupply (we are not even talking production costs, we are talking manufacturing costs) estimated manufacturing costs at around $310 in its detailed teardown of the XBox Slim. I'm really curious to see why you think MS can make a profit selling the product at $199. |
Assuming companies still run on contracts, they are not paying the full price of individual components like most of us do. Consoles represent an steady supply of die sets which will otherwise see poor or low sales. I am saying that as someone who once dealt with a computer building company who told me if I bought around thirteen hundred chipsets for mass production of cheap computers, they'd sell them at around fifteen thousand... The actual teardown put them at around two hundred per unit. This was slightly less.
drkohler said:
Of course estimates are not exact. I am reasonably experienced in the mass manufacturing industry to estimate manufacturing costs of consoles within probably 10-15% accuracy (I get lower values than iSupply, but whatever). The ever so popular argument "it will likely be cheaper in a year" is completely false. It is true for an initial production run compared to later "routine" production runs. For example, manufacuring PS3s and X360s now is _considerably_ more expensive than it was 2-3 years ago. This is a simply law of numbers (and increasing labour costs everywhere, even and particularly in China). As to who is opposed to losing money or not (and at $199, we are not talking about "some" losses, those are massive losses on a per unit base) is anyones guess. Sony obviously is less willing than MS, as the price of the PS4 in Europe has - after some short promotions - regularly been jacked up to full MSRP during the entire year while X1s were cheap all through the year. You will see it in the quarterly fiscal reports. My guesss is, as last year, record sales but profits will be considerably down (I think Sony even reported a small loss, not sure tho). |
Of course, even if there are losses, take into account the consoles have never been a source of revenue. The Online Services are...
