That just seems too high to me.  The arcade model was on sale a little while ago for $130, so I'm going to assume that this price is Microsoft's break-even point (I doubt they would have wanted to sell it at a loss, even if it was a limited promotion).

The retailer gets $5.  Packaging and shipping materials are $10.  The controller and cables cost at least $15.  That means the actual system costs about $100 to manufacture.  If they can save $50 to $70, that means they can make an XBox for $30 to $50, which just doesn't seem right.

Patcher's prediciton of a $20 to $30 savings seem much more believable, because that would mean they could manufacture a system for $70 to $80.

Even if my original assumption was wrong, and it costs Microsoft $150 for an arcade (this would be my upper limit), then the system itself would cost $120.  Again, a $50 to $70 savings (almost 50%) just doesn't seem right.

Once a system is "cheap", it gets harder and harder to reduce the price by any significant margin.

I fully expect Microsoft to announce at E3 that they will be selling an arcade slim + Natal for $180 to $200, and an elite slim + Natal for $280 to $300, and that they will still be able to make a profit from each unit sold.

welcome to the club!

The irony is that everyone says all the time Pachter doesn't know anything blah blah

when actually a study was done not too long ago where it was proven that Pachter had the highest successful prediction rate of any large scale gaming anylist.

Obviously he isn't going to get everything right, no one does. The guy has a good personality too I dont understand the hate he gets at all he's a cool as hell.

Trademark infringement haha. Yeah!

Now that you mention it, I can't say I have seen it called PS3 Slim by official ads and stuff.

So what do you suggest MS should call the re-designed slimmer X360?

Some people just want something to complain and get angry about. I think he's a cool guy, too, and even if he WAS wrong a lot (which he really isn't like you said), then what would be the big deal? People are just ridiculous sometimes. And I think a lot of people just jump on the "trash Pachter" bandwagon.

the only thing he is wrong about is the price. Slim (no HDD) + Natal will be $199.

Microsoft stated that they "Broke even with accessories" just after the Xbox 360 Arcade was cut to $200 on the Falcon chipset. Now I doubt that Jasper was a significant savings in itself. Every other component is identical and at the bottom of their cost/time curves so I doubt that anything else would have gotten significantly cheaper and at best Jasper probably nets them a $10 saving overall. With regards to the $130 deals, its likely both Microsoft and the retailer were losing money on loss leading deals to get people into stores.

With regards to semi-conductor manufacturing the cost is usually around $5000 per wafer so the savings from moving from two chips to one is about $15 or so given a slightly larger die than one of the original chips and reduced packaging/testing costs.

The chip alone likely eats into half your estimated savings. Then you have to factor in the cooling solution which hasn't changed since launch and could probably be halved in size whilst removing the more expensive heat pipes/copper. Then you have the PSU which could be simplified, the motherboard power supply circuitry could be halved along with the complicated traces between the GPU and CPU as well as the reduced size of the overall board and the case which could be reduced in size and made more out of plastic to save money and finally its likely they have gone back to 4* GDDR3 1Gbit which would likely halve the memory cost and thats a good $10 easily right there if not $15 overall.

lol

This thread is almost at epic levels thanks to our friends with their insightful cost evaluations. ^^

Pachter is right! Rumours are that MS discovered the secret landfill where Intel buried the first Itaniums and now is using them to build XB360 Slims!