@ cleveland.
just to update..

you only have $4,571 cost of revenue to play with.. which can not include negative numbers - for obvious reasons - you cannot have items that cost "negatively", you can have zero cost, just not negative cost.

so, like my previous point, it's highly unlikely that consoles are sold at a loss in FY end Jun 08.
8.7 million consoles
zunes, pc and xbox games, accessories, etc.
even if you assume live, windows mobile has no cost.

if you just divide 4,571 and 8.7 million consoles, then it cost an average of $525 per console.
but how about all the other stuff?

in FY jun 07, cor is 4,194 divided by 6.6 million consoles = $635 per console.

again, where would you put all the other stuff?

im pretty sure zunes, pc games, xbox games (1st party), Live Points (the ones that are packaged for retail) and accessories do cost money.

oh squilliam, i read the article, its for nov 2006?

so its been a while. how much do you think those components dropped in cost again?
starting july 2008?

$325 for an Xbox360 pro. Zephur model - It goes Original -> Zephyr -> Falcon -> Jasper.

For the Jasper shrink heres some new info.

Die sizes, Zephur:

• CPU 176mm^2 @90nm
• GPU 182mm^2 @90nm
• ED Ram 80mm^2 @90nm?
• Total: 438mm^2

Die sizes, Falcon:

• CPU 133mm^2 @65nm (25% reduction)
• GPU 156mm^2 @80nm? (14% reduction
• Ed RAM 68mm^2 @80nm? (15% reduction)
• Total 357mm^2 (22% reduction)

Estimated die sizes: Jasper:

• CPU 133mm^2 @65nm
• GPU 100mm^2 @65nm (Aprox)
• Edram 44mm^2 @65nm (Aprox)
• Total 277nm @65nm (Aprox) (22% reduction)

Also shrunk - DRAM dies.

sorry squilliam, those numbers don't make sense to me. I don't have technical knowledge.

How do those numbers translate to actual dollars?

I was indicating gross margin for software.  And I only included six months of sales.  I must be honest I am not totally sure where the $3.5 billion of profit comes from.  Fiscal year (12 months) June 2008 their earnings were $426 million for the games division.  If we look at year 2008 (last six months) only for the games division they have a loss. 

Quarter 3 Jan 1-Mar 31   89 million profit http://www.gamedaily.com/articles/news/xbox-division-posts-89-million-profit-in-q3-on-robust-demand-for-360/?biz=1
Quarter 4 Apr 1-Jun 30  188 million loss http://www.microsoft.com/msft/earnings/FY08/earn_rel_q4_08.mspx

So during the timeperiod I presented, software would have made them a net profit of $533 million while the games division reported a loss of $99 million.  Your good with numbers, but I still think you make way too many assumptions to be entirely accurate.  I also think in the games unit the only known loser is 360 hardware.  If they are still reporting a 6 month loss for the unit, I don't know how they could be making money on hardware. 

Every motherboard revision costs less money. Especially when the Cpu die size is reduced because it simplifies a lot of the power regulation curcuitry on the motherboard.

The Xbox360 has a powerful/hot CPU and GPU all contained on the one motherboard. The power regulation circuitry would be expensive. 200w peak power consumption.

When the motherboard shrunk with Falcon they removed a few of the power regulation components and thats one of the differences people looked out for when looking for the revision.

With Jasper they will simplify the motherboard design still further. But I think you should wait until someones cracked it open. There are smarter minds than myself who will disect the Jasper revision to work out the cost.

As for the chips if they cost say for example $100 for all three in 2006, in 2007 they would cost about $80 for Falcon and about $60 for Jasper.

cleveland124, to reply to your points:

1.  Q3 - profit  - yes

2. Q4 - loss of 188 million.  However, note that in Q4, a lot of the "loss" stemmed from an increase in Sales & Marketing and R&D costs and Headcount costs.

3. Software (XBox) and Consoles are in the same division.  So I'm not sure where you can put the $533 million profit you have for software.

4. Yes, this model can never be 100% accurate.  However, if we can get 5% to 10% variance on our predictions, then I think the financial model will be considered a fairly good working model.

reading the article, I assume they are taking that into account. Nice analysis btw.

Really great stuff bumidan...reading financial records and gleaning enough info off the data provided by corporations is an art/science indeed. I've not done ALOT of analysis for the game makers, but I've have done for other companies in the past, and the first and maybe most important thing that a lot of novices fail to comprehend is this....do analysis with a solid point of reference...perfect example is the M$ EDD loses $188 for the quarter...well...reading the Financial statement show you WHY those cost exist for EDD. They provide you (and professional money watchers) with the data to explain WHY they posted a loss. M$ is a HUGE company, and if they spent $600 million on one-time charges, that's hardly a hit to them, since it's been proven time-n-time again...capital investments will MAKE YOU MONEY in the long run. Thanks again for the analysis...you evidently put a lot of time and effort into it.

Thanks guys for all the replies and comments. I appreciate it.

Keep em coming. It makes posting these threads more fun. Otherwise, no replies means no interest.

Also, if you have any requests for whatever type of analysis - gaming related of course, please let me know. If I have time, I will try to do it not just for you , but for my own interest.

You can message me or wall post if you have any requests.

Thanks.