Seece said:
We hear about hardware cost reductions, nothing has been said about XB1 yet. Kinect is quite cheap to make as well. Factor in the free games and I would estimate around $100 lost per console.
MS don't get costs down as fast as Sony for some reason.
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Yeah I agree. I think the loss is quite substantial at ~$100 per console right now (imo), considering the free games. I also dont think hardware costs come down as fast as most people seem to think.
Just about every time a manufacturer cuts price we see the impact in the financials. With Sony it was glaringly obvious that the cuts to the PS3 heavily imapacted their bad financials, even when we assumed the cost to produce a ps3 must have gone down substantially since release and a $50 cut would be absorbed by hardware cost reductions.
Ultimately though, i dont see MS in the console industry purely to make profit. Which is why cutting the price so fast was a good move given what i think are their goals with Xbox.
The fact that MS can basically cut price like this on a whim makes them a scary competitor. The cut completely changed the landscape in the US this holiday, and i fully expect the momentum to carry on into 2015. And given sony's goals i dont see a reaction from them in the near future.