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[Jonlisle81]

As per the front page,

QUOTE

MS's Xbox 360 will be priced at $299 when it hits shelves later this year, according to analysts at major investment bank UBS, with MS subsidising each console to the tune of $75 in order to meet that price point.
Predictions by the analysts, reported last week in the Toronto Globe and Mail, suggest that MS will pay $375 per unit to its manufacturing partners, with the final retail price of the console pegged at $299.

If this is true, I'll actually be able to buy a game or two at launch. Anyway, how do you think this will effect MS overall? Think they will make up for it with software? Market share? I don't know a whole lot about it, so I was wondering what you "more informed" fellas think.
Just wondering, how much do they lose on every xbox currently?

[{Sephiroth}]

Well think about it, £35 games (I don't know, $50?) and most console users have over 2 games. It doesn't cost much to produce games. Of course some goes to the game makers some goes to ms, not sure about the ratios or whatever. I don't think it should take too long for MS to break even on the 360, but don't forget unit production costs will drop significantly over the years. This year it may cost $375 to produce, next year it may be $300 etc.

[xfool2004]

As far as I understand it, M$ just started to make profit on "regular" xbox with a mere 63m proffit in the last Q after how many years of 7or 8 figure losses...

[-XboX-Abuser-]

does anyone really give 2 shits if M$ takes a loss on their game consoles? They already own a large share of the PC market.. They make billions upon billions each year on software sales and support. So what if they have a 200-300 million loss on their consoles...

-XBA

[Deftech]

MS lost 150 or more on each xbox sold, so 75 is nothing.

[Slikmastah]

i think M$ can handle themselves, we don't need to worry about it. They have the richest man on their side. just let me get my xbox 360 at 299 and smile

[Jully]

now that blockbuster has no lat fees then i would only buy it if it was fun on live. the only game that i won that is own a disc is GR2 and thats for the live play only, so i could deal with $60 or $70 games

[Deftech]

regardless of Uncle Bill being the 1st, 2nd or 3rd richest man there is, thats not the big picture.

MS has 66 Billion in Cash Reserves. Thats just disgusting  

[nwo504]

QUOTE(|Buddha| @ Jun 7 2005, 11:26 AM)

Not the richest anymore i believe. Isn't that guy that started IKEA the richest now? Only by a mere billion or so.

[Slikmastah]

QUOTE(nwo504 @ Jun 8 2005, 10:57 AM)

mere and billion shouldn't be used in the same sentence

[twistedsymphony]

When the Xbox was launched MS took a $155 hit on every console...
(it cost $455 USD to manufacture ship etc.)

Today MS still takes a hit but only about $52 (so today it costs them about $202 to manufacture ship etc.) Which is substantially less however it's still a loss

By comparison Sony MAKES $48 on every slim PS2 sold.

The biggest cost savings as mike said is in royalties.

Sony owns all the tech in the PS2 so they pay NOTHING in royalties (well except maybe rumble now but...   )
The Xbox probably had to pay royalties to Intel for the PIII, nVidia for the GPU, Sony and the DVD consortium for DVD playback and DVD formatted discs, more royalties for whoever owns progressive scan/ HD etc.

This is why the xbox was so "broken up" and also why the 360 will be broken up as well. The Xbox was so front loaded with Royalty costs for the CPU and GPU alone that the everything else was sold EXTRA.

for instance... the cost of the DVD video playback royalties were part of the DVD playback kit's cost. the cost of progressive scan and hd video playback, and surround sound were built into the cost of the Advanced AV pack (which is why consoles use a custom AV port).

We're getting some of this stuff built into the Xbox360 but really only the techs that have come to maturity and are available for "public use" without royalties. such as DVD video playback and progressive scan. (things like this are part of the reason they are able to drop the price of the console as time goes on).

MS was really smart this time around and they own just about all the "rights" to everything in the 360 so there will be little to no royalty costs involved. The royalty costs would however come in the format of things like the wireless networking and DVI/ HDMI ports, which is why those will most likely not be included... so they can break out the cost of those royalties into the add-on devices.

The sad part is... I think the biggest royalty payment MS has to make in the 360 is to nVidia for BC  

[Andy51]

I believe M$ won't have to pay nVidia anymore once they do all xbox games?

[Twasi]

I believe the way they plan to make that up is with not including the wireless adapter, It will probably cost pretty close to how much they are loosing on each box, Loosing 75 is nothing seeing as they almost break even as soon as someone purchases 1 game and on launch people will be buying multiple with their new system.
The magazine that said Ingvar Kamprad (ikea founder) was the richest made a mistake, they calculated his fourtune at $57 billion which would only be true if he owned the entire company which is not true, that number was calculated if he owned the company and every store, which he donate to Dutch Stichting INGKA Foundation in 1982. He doesn't take part in running the store anymore, he only has $18.5 billion. They say Ingvar is a very cheap man and thats helped him get rich, he stays at ratty hotels takes the subway to work instead of paying for gas or a car, and he told a magazine he drinks $4 waters out of hotel mini bars and buys cheap replacements later from mini-marts so he doesnt have to pay the hotels. Warren Buffett is the second richest man who is still 3.7billion behind Bill Gates. Although if Sam walton the man who opened Wal-Mart was alive today he would be worth twice as much as Bill, currently his family togther are the richest family on earth. I wounder what it's like to have 50 billion, being able to watch tv and know youre making thousands of dollars a minute doing nothing.

[CattyKid]

Ahhh..

$299 is such sweet music to my ears.  That means only $250 left+about $500, even for launch titles.

XBox360, $299.
Game, $70.
Pwning your friends on release day, priceless.

[twistedsymphony]

QUOTE(Ickypoopy @ Jun 10 2005, 12:51 AM)

What in the hell would make you think that you have to pay royalties for components you buy?  You only need to pay royalties if you are creating something that is covered by someone else's patent.