The verdict from a report that IHS will release later today was shared exclusively with AllThingsD: The combined cost of parts and manufacturing everything that comes with the Xbox One — the console, the Kinect and the controller — comes out to $471, or about $90 more than the cost of Sony’s PS4, which debuted last week.

The Xbox One sells at retail for $499, giving Microsoft little, if any, room for much of a profit for now.

At least $75 of that cost is derived from the Kinect motion-sensing add-on that comes bundled with the console. (The PS4 has nothing comparable in its box.) But the biggest cost driver inside the Xbox console, said Andrew Rassweiler, the IHS analyst who led the teardown team, is the microprocessor from chipmaker Advanced Micro Devices. Like a similar AMD-made chip found inside the PS4, this one is a combination of a CPU and a graphics-processing unit (GPU) that handles gaming graphics. At an estimated cost of $110 — about $10 more than the AMD chip found in the PS4 — it’s the single most expensive component in the system.

The other major silicon inside the Xbox One (shown in an exploded view above) is the memory. Unlike the PS4, which used higher-end GDDR5 memory chips, the Xbox One contains older — more common and less costly — DDR3 memory. Memory chips came from SK Hynix, and added about $60 to the cost, or about $28 less than what’s found in the PS4.

The parts used to assemble the console itself — not including the Kinect, the controller or anything else — cost $332, Rassweiler estimated, meaning that the other items add about $139 to the cost. The controller costs about $15, and contains Wi-Fi and Bluetooth components from Marvell Technology.

http://allthingsd.com/20131126/microsofts-xbox-one-cost-90-more-to-build-than-sonys-ps4-teardown-shows/

Stolen from Gaf.

They already said the are making a profit or breaking even on each console sold. This was back in September.

http://www.dailytech.com/Xbox+One+to+BreakEven+or+Make+Profit+on+Each+Sale+from+Launch/article33324.htm

Its a different architecture. In the right hands things like Ryse happen. In the wrong hands things like Ghosts happen.

First parties will blow 3rd parties away on Xbox One. Just watch.

Can somebody break down the costs of the main components except for the Kinect? I just like to see how the costs in each machine compare. This whole thing seems quite ironic or a bit dubious. How can XB1, with lower performance, more common components, in a much less compact design, cost more? Why would the AMD chip inside XB1 cost more than in PS4?

So sub-1080p console games happen? ;D

lolol I kid, I kid. Ryse looks phenominal, I just can't tolerate sub-1080p games on my projector anymore due to the screen size, but I'm an outlier I imagine. 

edit: forget it. i read it wrong

Nintendo said close to the same thing. We know how that turned out

In all honesty the AA must be phenominal on Ryse. I have a 50inch HDTV and theres hardly any jaggies. Seriously shocked by how crisp it looks. For example other lanch 1080p titles have more jaggies. Not naming I dont want a war.

chip manufacturing costs largely depend on yields and size of the chip, so if the XB1 APU is bigger in size with compareable or slightly weaker yields then the chip ends up being more costly

additionally ofcourse there are big R&D cost attached to chips, which are bigger the more prototypes they made/chip architects they employed/time they needed

The number of hardware specialists on Gaf is overblowing.

Microsoft should fire all its engineer with 20+ years of experience and graduated in the worlds bests universities, because Gaffers know better... because... a guy... Mark Cerny I think, said so. And this single guy is God.

OT: those estimationss are just estimations, more than half the prices they give are taken from their asses as educated guesses.