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View Full Version : Xbox 360 Costs $715 to Make!


evo_supra
12-29-2005, 07:45 PM
Gamershell: A high ranking friend at IBM, one that worked on the Xbox 360 chip design, tipped us regarding the real expenses involved in manufacturing the Xbox 360, and when we mentioned the $126 Microsoft loss, he said:

“$126? It costs Microsoft approximately $715 to make, the manufacturing costs are still too high, another reason why they’re producing relatively small quantities, Microsoft can take it though”

http://hardware.gamershell.com/news/xbox_360_costs_036715_to_make33/

I didnt realise they were losing this much per console...is the gamble gonna pay off you think? hmmm...well at least they can take the punches :cool:

A. Wright
12-29-2005, 08:18 PM
My friend knows somebody that's already had to RMA twice, seems they've got a lot of bugs. I'm sure Microsoft can take the hit though, I think the goal right now is just to get control of the market and hope PS3 has trouble taking hold.

NeOmega
12-29-2005, 08:19 PM
Wow, A surprise they lose anything, but I believe it. That means they are counting on the consumer to buy at least 12 games.... that can't be right. 12 on average I think is too much and too risky. If it is true, margin on MSFT.

Hazdaz
12-29-2005, 08:53 PM
I would really take that $715 figure with a HUGE grain of salt.

First off, it wouldn't shock me to hear that the first batch is that expensive to build, but all components (espesially computer components) drop in price dramatically as the cost of the R&D and equipment is ammortized and the yields improve. By the time that the PS3 hits the market (almost a year from now), I would thjink that the cost to build an XB 360 is gonna only about $50 more than it is selling for.

People that know nothing about manufacturing always are shocked when they read very misleading rumors like this one - yet stuff like this happens every day, with all products sold.

JeroenDStout
12-29-2005, 09:05 PM
Wow, A surprise they lose anything, but I believe it. That means they are counting on the consumer to buy at least 12 games.... that can't be right. 12 on average I think is too much and too risky. If it is true, margin on MSFT.
Market control is worth more as 12 games, though.. if they can knock the other consoles back it'll mean they have a by far larger advantage in the next cat-fight between consoles.

NeOmega
12-29-2005, 09:17 PM
Perhaps, I am more inclined to believe Hazdaz's explanation though.

DevilHacker
12-29-2005, 09:23 PM
That is total BS!
If the 360 costed that much, microsoft would not ship it like they did...
:surprised

Beamtracer
12-29-2005, 09:28 PM
Whatever the Microsoft Xbox 360 is worth, Sony's PS3 will be worth a lot more. The PS3's biggest hurdle will probably be price.

csmallfield
12-29-2005, 10:29 PM
Hazdaz is right, this is nothing new. Every system comes out at a loss, production gets more efficient, design gets better and poduction costs go down to a reasonable amount. Though, this is significant because this is the biggest loss of any system. I believe the original Xbox was losing $200 per unit.

But you get one in every home, and what games are going to sell the most? Xbox 360 games will, if they pull that off. Microsoft could sell at a loss for 10 years if it means driving back the other systems and recouping their profits once they've got a monopoly.

But I still think they screwed up. They didn't create enough, consumers got frustrated and just spent money on other things. Video Game sales went down 20% this holiday season, which is a HUGE amount. Xbox 360 games are everywhere because no one has the system to play it on. I know many hardened gamers, myself included, who are frustrated with what happened to the point that I probably will wait until the PS3 and Nintendo Revolution come out before buying anything.

Titan
12-29-2005, 10:33 PM
First off, it wouldn't shock me to hear that the first batch is that expensive to build, but all components (espesially computer components) drop in price dramatically as the cost of the R&D and equipment is ammortized and the yields improve. By the time that the PS3 hits the market (almost a year from now), I would thjink that the cost to build an XB 360 is gonna only about $50 more than it is selling for.

HEy Hazdaz, how are you so sure about the PS3 timeframe for release?

Hazdaz
12-29-2005, 10:46 PM
Though, this is significant because this is the biggest loss of any system. I believe the original Xbox was losing $200 per unit.
I believe that $200 figure for the XB1 was the estimated AVERAGE loss... I predict the same will happen with the XB360. Right now they might be losing $500 on each now, in 6 months they lose $400 on each, 12 months lose $300... and so on. The average will probably come out to the same as the XB1 average.


TITAN - I just going by what I have read. I think it was in an Ars Technica article that mentioned that the CEO or President of Sony alluded to it being a year away (for the US). As usual, I would expect that Japan gets it much sooner than that.

Harrad
12-29-2005, 11:18 PM
If you think thats mad then check out the bugatti Veyron... Bugatti-cars.de (http://www.bugatti-cars.de/bugatti/index.html)

http://www.wallpaper.net.au/wallpaper/automotive/Bugatti%20Veyron%202%20-%20800x600.jpg

It cost a huge £800 000 to buy but the manufacturing cost is £5 000 000! Now there's a loss. :argh:

PhilOsirus
12-30-2005, 04:37 AM
I believe that $200 figure for the XB1 was the estimated AVERAGE loss... I predict the same will happen with the XB360. Right now they might be losing $500 on each now, in 6 months they lose $400 on each, 12 months lose $300... and so on. The average will probably come out to the same as the XB1 average.


TITAN - I just going by what I have read. I think it was in an Ars Technica article that mentioned that the CEO or President of Sony alluded to it being a year away (for the US). As usual, I would expect that Japan gets it much sooner than that.

Actually Sony has been saying on numerous occasions recently that it will be released in Spring 2006, which I doubt myself, but even Epic said Unreal 2007 would release at the same time as the PS3, in Spring.

Nichod
12-30-2005, 04:58 AM
Microsoft makes a huge amount of profit with xbox live. Which they are doing quite well with at the moment.

sumpm1
12-30-2005, 07:41 AM
I DO believe taht Micro$oft is taking a hit on each console, as each console brand has now done, but not $300. There is no evidence to this rumor. Also, after the first Xbox took a loss (http://biz.gamedaily.com/features.asp?article_id=9522&filter=), Gates said he could fund the division off his personal cash. Obviously the market is huge and MS MUST have a piece of the pie, stating that you could fund a division that has never turned a profit doesn't necessarily fare to stockholders now does it. Stockholders would be vomiting publicly if the 360 was taking $300 out of their pocket every sale> The only way that a stockholder would sign on is if there were some kind of mind control box in the 360!

Para
12-30-2005, 07:47 AM
I believe that $200 figure for the XB1 was the estimated AVERAGE loss... I predict the same will happen with the XB360. Right now they might be losing $500 on each now, in 6 months they lose $400 on each, 12 months lose $300... and so on. The average will probably come out to the same as the XB1 average.

The first and only time XBox has been profitable to Microsoft was the 4th quarter of 2003 when they released Halo 2. Microsoft has been building a brand and is succeeding at it: High quality games and consoles for everyone, Microsoft takes the hit but can take it while getting a lot of new customers.

richcz3
12-30-2005, 08:38 AM
Microsoft will be losing big on the outset, but these early costs are all figured in. They have experience with the xbox now and can better project their long term gains in market share and profits. I don't think for a second that MS would reduce manufacturing to shore losses at introduction though. The shortages of 360's on store shelves isn't helping MS's console market share or mind share.

NeOmega
12-30-2005, 08:47 AM
....or mind share.

How about the people getting Blue Screens of Death on their consoles... that, is scary, and a first in console history, I think.

halo
12-30-2005, 09:26 AM
practically every console is sold at a loss....the loss is made up with licensing revenue from games that are sold.

Lone Deranger
12-30-2005, 10:36 AM
How about the people getting Blue Screens of Death on their consoles... that, is scary, and a first in console history, I think.

That actually happens??? Hahahahahaha... :D :applause: :thumbsup: I knew the thing was flakey, but this takes the cake. LOL

The $350 I spent on JPN Sega Saturn games this week just became an even better investment after hearing this. :cool:

NeOmega
12-30-2005, 10:47 AM
http://www.xbox-scene.com/xbox1data/sep/EEFEkAEFAkTlDmtsQO.php

just a quick google... :P

There are more screenshots and reports... it is actually a Black screen of death.

Lone Deranger
12-30-2005, 10:59 AM
Thanks for the link NeOmega. That pic is funny. The text on the printed board beneath the Monitor says 'Only on XBox 360'.... ooh the irony of that statement! :D

Cronholio
12-30-2005, 11:27 AM
Microsoft makes a huge amount of profit with xbox live. Which they are doing quite well with at the moment.

They are hoping to make a huge profit with Xbox live. Everything I've read points to MS being anywhere from 2-4 billion dollars in the hole on this experiment (Xbox, Live, 360, Games) at this point. They are going to attempt to nickle and dime their way to profits with micro transactions. It's like wireless service. They'll give you a 200 dollar phone for free then make money on the service.

rakmaya
12-30-2005, 11:30 AM
Unlike the old times, MS is not locked in at any price on their system from individual system component designers. So initial loss regardless of how much it is is not going to hurt them as it did with xbox. However, their initial game lineup still fall too behind on first impression for ps3 maniacs. If they are looking to get some control, they will have to do better than this to get those ps3 people on their side. If he was willing to spend his personal money to fund for xbox, then an intelligent thing is to create on or more MS Game Studios to create such games that interest people who owns PS2.

Cronholio
12-30-2005, 11:37 AM
Unlike the old times, MS is not locked in at any price on their system from individual system component designers. So initial loss regardless of how much it is is not going to hurt them as it did with xbox.

I would think that they would lock in prices this time around. I read an article once that claimed MS got screwed on the Xbox by their HD supplier. The manufacturer moved on to making 40, 60, 80, 100 gig discs and didn't want to waste their manufacturing capacity on small orders of 8 or 10 gig discs for MS. As a result, the price of the harddrives for the Xbox supposedly escalated later in the console's life cycle.

Sakester
12-30-2005, 11:49 AM
yeh its true, sony inperticual when realsing there consoles they sell them at a huge loss, but make up by charging companies for the licence for developing on there console

white dragon
12-30-2005, 12:56 PM
While working in a retail store over the launch period of the 360 I think only 2 machines out of about 95 (mostly premium systems) had any problems, and these were both to do with the power supply. If you want to round that up you could say about 2-3% of the machines we sold were faulty. That's really not that much when you compare it to the amount of faulty DS and PSP machines. And the amount of PS2 machines sold, in the UK at least, I'm sure is only so high because you have to keep replacing them after 13 months after the laser dies. As for the loss on the machines sold, I doubt we'll really know the true amount till we hear it from MS themselves. I’m more curious to find out how much MS and the other companies make on Xbox Live downloads. The Arcade is an excellent feature and I can't wait till more people start putting their old games up on it.

PyRoT
12-30-2005, 01:48 PM
Isn't it entirely possible that these crashes are caused by the actual software / games that are running on the x-box rather than the x-box itself?

Hazdaz
12-30-2005, 02:01 PM
Actually, weren't most of those crashes proven to be poorly ventilated store display units that were running 24/7 in semi-sealed plexi containers??

The disc scratching is a whole other matter all together though.

Either way, WHITE DRAGON made a good point in that 2-3% is really a small number, and probably below what the PSP and PS2's original defect rate was.

Sociapath
12-30-2005, 02:07 PM
Thanks for the link NeOmega. That pic is funny. The text on the printed board beneath the Monitor says 'Only on XBox 360'.... ooh the irony of that statement! :D


Haha, that is hilarious :scream:

They just made a Port from the pc, and made it black...say bye bye to ur Xbox.

Para
12-30-2005, 03:25 PM
They are hoping to make a huge profit with Xbox live. Everything I've read points to MS being anywhere from 2-4 billion dollars in the hole on this experiment (Xbox, Live, 360, Games) at this point. They are going to attempt to nickle and dime their way to profits with micro transactions. It's like wireless service. They'll give you a 200 dollar phone for free then make money on the service.

Don't forget the accessories: Accu capacitor for wireless controller, wireless control with an actual wire for the technically challenged, remote control, bigger hard drive, earphones with microphone, changeable front panels...

thatoneguy
12-30-2005, 08:05 PM
But I still think they screwed up. They didn't create enough, consumers got frustrated and just spent money on other things. Video Game sales went down 20% this holiday season, which is a HUGE amount. Xbox 360 games are everywhere because no one has the system to play it on. I know many hardened gamers, myself included, who are frustrated with what happened to the point that I probably will wait until the PS3 and Nintendo Revolution come out before buying anything.

Hahahaha, yeah because based on the PS2 release, I'm sure Sony is going to be on top of demand in the US.

The reason there aren't enough Xbox 360s is because people wanted it "yesterday". So they shipped before building up a rediculous warehouse of unused 360s. Imagine: November rolls around everyone is drueling over the 360 but Microsoft releases a press statement: "We're not going to release the 360 until we have enough in our warehouses to sell one to everyone who wants one." Now THAT would piss me off.

Cronholio
12-31-2005, 02:14 AM
Don't forget the accessories: Accu capacitor for wireless controller, wireless control with an actual wire for the technically challenged, remote control, bigger hard drive, earphones with microphone, changeable front panels...

Accessories traditionally haven't been big revenue generators for consoles. I think most gamers would agree that for say, the PS2, a memory card and a second controller are pretty much a requirement of all gamers. You would expect the vast majority of gamers have at least bough a memory card or extra controller. In reality only 30% of the people who own PS2's have bothered to buy a second controller and/or a memory card. Specialty items like face plates, and head phones will sell even less. I think the majority of people are going to buy core systems and not bother to buy a harddrive at all, much less a harddrive upgrade. Not making the harddrive and a few months of free live service standard issue was a mistake on MS's part and is going to hurt their potential to generate revenue with Microtransactions.

white dragon
12-31-2005, 03:20 AM
I think you'll find (in the UK certainly) that people DO actually want the hard disk, which is why the premium packages always outsell the core units, and that when they've been on sale, all the core units have sold with a hard drive. I have no figures to quote to you on that, just from what I've seen and heard from other people working in retail over the country. The HD allows people to play their old games and also download stuff on Xbox live, it's a fairly substantial piece of kit.

As for your second point of MS missing the boat by not offering free Live service... they have. Every machine has free Silver Service and they're offering a free month of Gold access. I'd expect a very high percentage of people that try the gold version for a month will then pay for a yearly subscription, not to mention some credit.

I'd be interested to know where you got your information about the 30% from, and how that coincides with the percentage of people that have had to buy more than one machine. If you're buying a replacement/upgrade machine you don't need to spend another £20 on a memory card if you already have one.

Cronholio
12-31-2005, 03:33 AM
HD may seem to sell in high volume currently, but you have to realize these people buying the console now are early adopters who have to have the latest greatest regardless of cost. These guys will get the console the, the HD, headset, 2-4 wireless controllers and an armful of games. Over the life of the console as more and more casual and joe six-pack type customers start buying the console, more and more of the installed base is not going to have a harddrive. They will buy the console and a couple of games, 5-7 maximum over the life of the console, and mostly rent games from the video store. The market has demostrated this repeatedly.

I personally do not know a single person, save my little brother, who does not own at least one memory card and extra contoller for their PS2 or Xbox, but the fact is my friends are not representive of the average gamer. My brother is representitive of the average gamer. The average gamer would rather spend 40 dollars on a game than 30-120 dollars on a peripheral, even if hardcore gamers and early adopters believe those peripherals are absolutely necessary.

My information comes from trade reports mostly based on NPD sales data. There have been several articles about peripheral sales. The last figures I actually saw (maybe a year ago) showed that only 18 percent of PS2 owners had bought memory cards and 27 percent had bought an extra controller. For the PSX I beleive the number for the extra controller was 34% for the life of the console and that was the best selling PSX peripheral. Again I don't think people buying multiple consoles is a factor worth considering. I personally have owned 2 PS2's, my nephew has had 2, but we aren't representitive of a large portion of PS2 owners. Most people buy one PS2 and it works fine for as long as they play it. For many of the small minority who's PS2 breaks, they just don't buy another one.

richcz3
12-31-2005, 05:00 AM
Knocking the 360 for defects and not acknowledging that both the original Xbox and PS2 had techical glitches at launch is not taking everything into account. Does anyone believe that the PS3 will skate through its introduction trouble free? I know two people with PS2's that still get the occasional freeze ups while playing.

As for shortages of the 360 I can say that weighed heavy on my recent purchase decision. When store clerks shrug they aren't sure when they will get new shipments in, entertainment dollars will be spent elsewhere. Leveraged with alternate buying decisions. I haven't owned a console since the Sega Genesis. I Purchased a new PS2 the day before yesterday.
And my NEW PS2 "froze up" while playing King Kong yesterday. So lets not get too carried away with 360 launch issues.

xino
12-31-2005, 05:37 AM
I Purchased a new PS2 the day before yesterday.
And my NEW PS2 "froze up" while playing King Kong yesterday. So lets not get too carried away with 360 launch issues.

That's because the "new" slim-line PS2s don't have fans. They're cheaper to produce and less plastic used for production. It's also Sony's way of telling gamers "Take a 15 minute break for every 2 hours you play." ;)

Kion
12-31-2005, 07:13 AM
That's because the "new" slim-line PS2s don't have fans. They're cheaper to produce and less plastic used for production. It's also Sony's way of telling gamers "Take a 15 minute break for every 2 hours you play." ;)

or it could be a bug in the game. it happens

richcz3
12-31-2005, 06:48 PM
That's because the "new" slim-line PS2s don't have fans. They're cheaper to produce and less plastic used for production. It's also Sony's way of telling gamers "Take a 15 minute break for every 2 hours you play." ;)I believe the reality is that both the Hardware and Software are increasingly complex. Older PS2's are as prone to crash as my new one. Madden 2006 crashed on my nephews older PS2 when we played yesterday.

With the 360 and PS3, these types of problems will become an increasing part of the price gamers pay for increased power and visuals for the price range. Even dedicated harware can miss a beat, or two, or three. :)

thatoneguy
01-01-2006, 01:01 AM
My Xbox has never locked up. My PS2 stalls repeatedly. My friend's Xbox occasionally crashes, but not in comparison to his PS2. They're unbelievably complicated contraptions, I hold no ill against either brand.

xino
01-01-2006, 09:00 AM
or it could be a bug in the game. it happens

Well seeing as how most of the electronics retailers I've been to in the Dallas area have signs up everywhere stating "The slimline PS2 has no fan and is prone to overheating", I'll blame the console long before I blame the game.

I have a first generation PS2, and I've yet to experience any crash. Of course, my GC and XBox have never crashed either. My first generation Playstation never once crashed and the "thumbtack" trick allowed me to play Japanese games. Man I miss those days.

Either way, I've never had any system crashes on any system I've owned since the atari, master system, and nintendo. The nintendo dust debacle is an entirely seperate issue in my eyes though, that was just a design flaw. I guess I'm just one of the lucky few that have pristine systems.

richcz3
01-01-2006, 09:04 PM
Getting back on the subject of the 360's Cost vs. it's SRP. As others have stated there is an acceptable percentage of system failures. Based on whta I have heard and read online from people who work at stores selling the 360 system, the returns due to crashes or other technical glitches have been pretty low.

CupOWonton
01-01-2006, 09:53 PM
the returns due to crashes or other technical glitches have been pretty low.

Mainly because most people put fans on their power supplies to fix the problem rather than return it. Looks like crap though.

So far it seemed like there was a general 15% of people reporting glitches on various websites. 15% is HUGE. I dont think Microsoft is going to make nearly the same size income on the XB360 as it did the XB1.

I do like the idea the 360 is supposed to link up with a mediacenter, but, people have already hacked PSP's to do just about the same thing. And if the rumors are true, the region on PS3 may be global meaning no more immaginary borderline between country's and what games you could play. Though, since PS3 is not tangable here, we can not make viable comparasons.

richcz3
01-01-2006, 10:55 PM
So far it seemed like there was a general 15% of people reporting glitches on various websites. 15% is HUGE. I dont think Microsoft is going to make nearly the same size income on the XB360 as it did the XB1.
People like us who post on Forums do not represent the mass general public. People who post on forums are more likely to be very vocal about things they are passionate about. As for people putting fans on their 360's, that solution is a bit more "gearhead" than the average consumer. As you can surmise, I don't give average people much credit than simply returning a unit that doesn't work as it should.

Like I wrote and as others have mentioned in this thread, the overall returns vs. units sold per store is reasonably low so far. Really it's all speculation for now. I am sure by at least February there will be a sales made vs returns stats for most major retailers.

BillB
01-02-2006, 01:40 AM
So far it seemed like there was a general 15% of people reporting glitches on various websites. 15% is HUGE. How was that figure derived?

3-5% is pretty normal for any product, manufacturers budget on about that much in warranty returns. I'm guessing the 15% above is a pretty baseless from the way you said it.
Not that I care about X-Boxes especially, no plans to get one, just hate seeing baseless statistics thrown around. You open yourself up to a libel lawsuit if nothing else.

Beamtracer
01-02-2006, 07:17 AM
As for people putting fans on their 360's, that solution is a bit more "gearhead" than the average consumer.
It's now apparent that xBox 360 stands for 360º Fahrenheit.

Para
01-02-2006, 08:23 AM
It's now apparent that xBox 360 stands for 360º Fahrenheit.

It certainly does not since only a small part of the power supplies overheat and those can be replaced for free.

Beamtracer
01-02-2006, 08:47 AM
I was just reading an Ars Technica review of the xBox. It seems that 360º really is the temperature that the machine will heat to...

Quote:
"The 360 runs hotter than any other console I've ever seen, hotter than my computer, and a touch hotter than the space heater I'm using to keep my feet warm right now."
http://arstechnica.com/reviews/hardware/xbox360.ars/5

Para
01-02-2006, 09:56 AM
Instead of using adjectives a Finnish hw site called Muropaketti (http://www.soneraplaza.fi/tietokoneet/artikkeli/0,2998,h-9112_a-319785,00.html) actually measured the actual temperatures of XBox360. Because I doubt you can read the graphs which are in Finnish here's a short translation of each:

-- All temperatures are in Celsius degrees --

format: [what is] [idle temperature]/[stress temperature]
room 22,5/22,5
PSU top 31,1/32,5
PSU bottom 39,3/42,7
XBox 360 bottom 40,8/42,7
Xbox 360 behind 46,9/49,5

Yes, it's a bit warm but I wouldn't say it's overheating or even hot. My current computer's processor is running at 53 Celsius degrees while typing this so albeit XBox360 is an extra source for heat in the room it's not some sort of Hell-in-a-box360 as some like to think it'd be.

Cronholio
01-02-2006, 08:02 PM
Instead of using adjectives a Finnish hw site called Muropaketti (http://www.soneraplaza.fi/tietokoneet/artikkeli/0,2998,h-9112_a-319785,00.html) actually measured the actual temperatures of XBox360...

I'm not sure exactly what you were trying to prove by posting this, because that's pretty damn hot. Especially if what they were measuring was the case and not the componnents inside. 40-49.5 degrees is much much hotter than the casing of a typical space heater. If the case is 40-49.5 degrees the CPUs are no doubt much higher than that, and much higher than the 55 degrees your cpu runs at.

PhillipCrond
01-03-2006, 02:24 AM
You've gotta understand where the money goes in the games industry, then the console's cost of manufacturing doesn't seem so bad.

Of any xbox360 game disc sold, 40% of the retail price will go to Microsoft. This is third-party published games, also, not just MS titles. This cut is sortof a "we made the console that's making you rich, so pony up!" fee to the developers. If they sell a handful of games with every system (i.e. incentives for package deals), they've made back the money they lost, and every accessory or xbox game sold from that point on is gravy.

Same goes for Sony, they get a 40% cut of every PS game sold. I think Nintendo's cut is closer to 50%, from what I've heard.

Para
01-03-2006, 11:10 AM
I'm not sure exactly what you were trying to prove by posting this *snip*

My point is that while it surely produces a noticeable amount of heat it's on-par with computers (since that's what an XBox360 technically is). The main reason for posting the actual numbers was Beamtracer's quote from Arstechnica which uses adjectives which may look very biased to someone who has no idea of console and hardware temperatures in general.

richcz3
01-03-2006, 10:54 PM
The operating heat isn't as big a deal as the environment MS expects a 360 to function ideally/properly in. That's to say that if a 360 requires an inordinate amount of ventilation or air circulation or the system crashes, then theres going to be a problem.

I am sure (or I hope) that the engineering team put the 360 system to test in less than ideal situations. Meaning, cramped stereo cabinents with other heat producing equipment. Simulating rooms wih less air flow and higher ambient tempertures. Some people don't realize hwo much heat a stereo, large screen TV and video game system can add to the ambient room temperature. Hearing that some systems crashed in their enclosed plexiglass displays is not a complete surprise but it does raise a few eyebrows because the retail displays were ok'd for use.

Neil
01-04-2006, 01:46 AM
I DO believe taht Micro$oft is taking a hit on each console...

Congratulations you're the winner of the "First person to replace an S with an $ in a Microsoft thread" award

Neil
01-04-2006, 01:49 AM
And the black screens of death weren't limited to just store displays. Most pictures are from home users. How many people go run out to a store with a digital camera to take a picture of a frozen in-store display?

PhantomDesign
01-04-2006, 03:48 PM
That "$200 phone" probably costs them about $50-$65 & considering they're making $20+ per month profit (guestimation) - you can see how only a small fraction of the two year contract will pay for your phone.

I doubt the loss figures I see floating around the internet about various consoles - if you can directly contract long-term massive amounts of the exact same hardware from NVIDIA, Intel, etc, etc - it's significantly cheaper - easily less than 1/3rd of the off-the-shelf price.

They are hoping to make a huge profit with Xbox live. Everything I've read points to MS being anywhere from 2-4 billion dollars in the hole on this experiment (Xbox, Live, 360, Games) at this point. They are going to attempt to nickle and dime their way to profits with micro transactions. It's like wireless service. They'll give you a 200 dollar phone for free then make money on the service.

sumpm1
01-04-2006, 07:50 PM
Congratulations you're the winner of the "First person to replace an S with an $ in a Microsoft thread" award

Thank You, Thank You....bows to crowd

NanoGator
01-04-2006, 08:36 PM
Sony spent 2 billion (yes, billion with a b) on PS2 development.

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