Redmond will sell every Xbox console at a big loss, says researcher iSuppli. Not to worry, the profit is in the associated software
Microsoft will carry on its tradition of taking a loss on the console, according to a preliminary analysis by market researcher iSuppli.
An up-close look at the components and other materials used in the high-end version of the Xbox 360, which contains a hard drive, found that the materials inside the unit cost Microsoft $470 before assembly. The console sells at retail for $399, meaning a loss of $71 per unit — and that is just the start.
Other items packaged with the console — including the power supply, cables, and controllers — add another $55 to Microsoft’s cost, pushing the loss per unit to $126. These estimates include assumptions that Microsoft is getting a discount on many components.