Microsoft Trims Xbox 360 Manufacturing Costs by 40pct

Baine

Baine

Baine

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Microsoft Corp., the world's leading maker of software, is earning money selling the Xbox 360 hardware, according to updated teardown analysis from research firm iSuppli. The information means that the software giant has managed to lower the price of its latest game console by nearly 40% in one year.

According to iSuppli's most recent analysis, the premium version of the Xbox 360 game machine equipped with hard disk drive has a manufacturing and materials total of $323.30, based on an updated estimate using costs in the fourth quarter of 2006. This total is $75.70 less than the $399 suggested retail price of the Xbox 360. Even though it is obvious that Microsoft still has to subtract freight, toll, retail partner's profit and other possible charges, it is highly likely that Microsoft has either managed to reduce its loss to minimal, or is making a tiny profit selling the $399 flavour of the Xbox 360.

A year ago the total bill of materials (BOM) cost for the Xbox 360 Premium, including hard disk, the DVD drive, enclosures, the Radio Frequency (RF) receiver board, power supply, wireless controller, cables, literature, and packaging, reached $525, well above the retail price of $399, according to iSuppli. Considering the up to date BOM, Microsoft has managed to reduce the pricing of its console by over 38.5%.

This is good news for xbox fans as it gives microsoft some room to play with console price cuts something sony cant afford right now

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Baine said:
This is good news for xbox fans as it gives microsoft some room to play with console price cuts something sony cant afford right now
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I highly doubt just because microsoft are now making a gross profit on each console they produce that we (the consumer) will see price cuts. I would imagine microsoft will keep the prices the same to try and recoup the costs they had in actually investing in the 360 project to begin with.

Of course this doesn't stop the fantastic bundles that are currently available here there and everywhere.
 
True it just gives them more options the PS3 cant come close to the value of the 360 right now and if sony try then microsoft might just counter price drop

All good news for us the gamers really it about time we had a proper battle sony have had it there way to long and as a result have made the market stale microsoft,nintendo,sega whoever need to be there keeping standards up
 
Until christmas 2007 I wouldn't expect to see many (if any) RRP price drops on any of the consoles.

Microsoft have only officially dropped the RRP price of the Core unit in the UK by £10 where as the premium has remained at RRP of £280.

The availability of special retail bundles has been a far better offering to consumers than a fixed fee discount on the current Premium unit.
 
It was reported a few weeks ago that the 360 project has come down to only around $100 million in debt. They will keep chipping away at that before they they drastically reduce prices.
 
SC04 said:
It was reported a few weeks ago that the 360 project has come down to only around $100 million in debt. They will keep chipping away at that before they they drastically reduce prices.
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Thats loose change for old Billy Gates hehe
 
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