magik Posted November 22, 2006 Share Posted November 22, 2006 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%. X-bit LabsGreat news indeed. With the PS3 already costing Sony roughly $300 or so per sale Microsoft may have a distinct financial advantage especially when the price-cut war ensues in another year or two. Wow, just think about it, if they're already aout ~40% cheaper in just 1 year, imagine what they could get it down to in a couple more years. :D Link to comment Share on other sites More sharing options...
John Veteran Posted November 22, 2006 Veteran Share Posted November 22, 2006 Wow, that's very impressive... :yes: Link to comment Share on other sites More sharing options...
P!P Posted November 22, 2006 Share Posted November 22, 2006 Nice but I wonder how they trimmed costs so fast. I thought it would took longer than a year to become profitable. I get a little worried with a trim like that. Link to comment Share on other sites More sharing options...
AlphaPrime Posted November 22, 2006 Share Posted November 22, 2006 Now would be a good time to price drop. I wonder how much further it'll drop when they move over to a smaller die process next year. US$300 for the Premium would be a big blow to both Sony and Nintendo. Link to comment Share on other sites More sharing options...
P!P Posted November 22, 2006 Share Posted November 22, 2006 Now would be a good time to price drop. I wonder how much further it'll drop when they move over to a smaller die process next year. US$300 for the Premium would be a big blow to both Sony and Nintendo. Microsoft is used to huge loss. If they reduced the price to $350, they'd be cutting about even and I'd bet that'd very possible. I wouldn't be surprised to see a $50 price cut in the next 6 months. Link to comment Share on other sites More sharing options...
Danrarbc Posted November 22, 2006 Share Posted November 22, 2006 Now would be a good time to price drop. I wonder how much further it'll drop when they move over to a smaller die process next year. US$300 for the Premium would be a big blow to both Sony and Nintendo. Maybe not Nintendo. They already make money on Wii, so a drop to $200 or lower probably isn't out of the question for them whenever they have to. Link to comment Share on other sites More sharing options...
AlphaPrime Posted November 22, 2006 Share Posted November 22, 2006 Maybe not Nintendo. They already make money on Wii, so a drop to $200 or lower probably isn't out of the question for them whenever they have to. True, but if Microsoft keep the Core 360 and bundle it with a memory card (which would cost them next to nothing to do) while dropping the price to $200-$250, it may give the Wii a hard time. Link to comment Share on other sites More sharing options...
magik Posted November 22, 2006 Author Share Posted November 22, 2006 Nice but I wonder how they trimmed costs so fast. I thought it would took longer than a year to become profitable. I get a little worried with a trim like that. Nothing to be worried about, Microsoft has it's production costs projections all planned out on a year by year (or even month by month) basis. They have done extensive planning and preparation for price-cuts throughout the life of the console. There was a whole article about it on TeamXbox.com a while ago, if I can find it I'll be sure to link it here for you. Link to comment Share on other sites More sharing options...
+dnast Subscriber² Posted November 22, 2006 Subscriber² Share Posted November 22, 2006 That's a huge drop for such a short amount of time. That's amazing if the estimates are correct. Now would be a good time to price drop. I wonder how much further it'll drop when they move over to a smaller die process next year. US$300 for the Premium would be a big blow to both Sony and Nintendo. I agree. I know some people feel that a price drop will devalue the product in some people's eyes, but if MS wants to pull away from the rest of the pack they are going to have to get closer to the mass market price range. Just like people say that many consumers looking for PS3s will end up "settling" for a 360, the same will happen when parents see that the cheapest 360 is still nearly $100 more than the Wii (when you include the necessary 360 memory unit). Link to comment Share on other sites More sharing options...
Salohcine Posted November 22, 2006 Share Posted November 22, 2006 They are producing the CPU and GPU on 65nm process now so they get more chips per 300mm wafer, Link to comment Share on other sites More sharing options...
+dnast Subscriber² Posted November 22, 2006 Subscriber² Share Posted November 22, 2006 They are producing the CPU and GPU on 65nm process now so they get more chips per 300mm wafer, I thought that wasn't supposed to happen until January? Link to comment Share on other sites More sharing options...
MGS4-SS Posted November 22, 2006 Share Posted November 22, 2006 Will we see a price drop soon? I sure hope so. Link to comment Share on other sites More sharing options...
magik Posted November 23, 2006 Author Share Posted November 23, 2006 Will we see a price drop soon? I sure hope so. I wouldn't bet on a price drop at least until next year. Link to comment Share on other sites More sharing options...
Ji@nBing Posted November 23, 2006 Share Posted November 23, 2006 I've been waiting for a price drop. As soon as it drops by about $50- 100, I'll pick it and a bunch of games up. Link to comment Share on other sites More sharing options...
ZEROarmy Posted November 23, 2006 Share Posted November 23, 2006 I hope they drop the Core version instead of cut its price. It's the most butchered piece of technology. If you want to save your game progress you have to spend at least $40 for the memory card, or $100 for the hard drive. Link to comment Share on other sites More sharing options...
kingroach Posted November 23, 2006 Share Posted November 23, 2006 make me wonder how much markup we are giving for pc parts.. I bet I couldnt buy a GPU like 360's for less than $200.. Link to comment Share on other sites More sharing options...
Spartan_X Posted November 23, 2006 Share Posted November 23, 2006 well... maybe not a price drop per se but something that could happen is a little change on the SKUs. "MAYBE" (this is me not MS) you could get something like this: Core: 20gb HHD and everything else stays the same way. 3 XBL Arcade games preloaded on the HDD. 3 months of XBL free. Premium: 80gb HDD and everything else stays the same way. 3 XBL Arcade games preloaded on the HDD. 1 year of XBL free. additional wireless controller or a play & charge kit. :happy: :yes: Link to comment Share on other sites More sharing options...
+dnast Subscriber² Posted November 23, 2006 Subscriber² Share Posted November 23, 2006 ^ That would be pretty cool and make me not hate the Core system. :p Link to comment Share on other sites More sharing options...
magik Posted November 23, 2006 Author Share Posted November 23, 2006 ^^ Won't happen. Link to comment Share on other sites More sharing options...
Sheppard Posted November 23, 2006 Share Posted November 23, 2006 ^^ Won't happen. I think hes in a position to know a little bit more about it than you, they will have to do something to combat the 20gb and 60gb PS3 bundles, adding 20gb to core and higher capacity to the Premium is the logical update. Link to comment Share on other sites More sharing options...
magik Posted November 23, 2006 Author Share Posted November 23, 2006 I think hes in a position to know a little bit more about it than you, they will have to do something to combat the 20gb and 60gb PS3 bundles, adding 20gb to core and higher capacity to the Premium is the logical update. Actually, no, he's not in any more of a position about the situation than me since he said himself that those bundles were his opinion and not reflective of Microsoft. The reason why I say it won't happen is because including a Hard Drive in the Core package completely negates the idea behind the Core package to begin with. The reason why a Core package even exists is for the casual gamer that doesn't care for backwards compatibility and online gaming. If they started including Hard Drives in the Core package then every Xbox 360 sold would include a Hard Drive and that would effectively segregate the 360 community as well as alienate the early adopters. Including a Memory Card and a Game with the Core system, however, is a much more likely possibility. Link to comment Share on other sites More sharing options...
Sheppard Posted November 23, 2006 Share Posted November 23, 2006 Actually, no, he's not in any more of a position about the situation than me since he said himself that those bundles were his opinion and not reflective of Microsoft. The reason why I say it won't happen is because including a Hard Drive in the Core package completely negates the idea behind the Core package to begin with. The reason why a Core package even exists is for the casual gamer that doesn't care for backwards compatibility and online gaming. If they started including Hard Drives in the Core package then every Xbox 360 sold would include a Hard Drive and that would effectively segregate the 360 community as well as alienate the early adopters. Including a Memory Card and a Game with the Core system, however, is a much more likely possibility. Afaik he works for Microsoft, so he might have an idea about what direction they are going even if its his own opinion. Yes i agree it negates the idea, but the reason was cost, for the people that didnt want to pay the extra ?80 to get the higher bundle they could buy the core and save money, if they include a hdd and other goodies to the core version at little or no costs then it would be an added bonus. I dont see how it would segregate the community, in your own words you said people who bought the Core are casual gamers that dont care for BC and online gaming. They would continue not downloading media or playing on live while the new adopters have the ability out of the box should they wish to if the prices stay the same. Link to comment Share on other sites More sharing options...
gunnerhkjp Posted November 23, 2006 Share Posted November 23, 2006 Afaik he works for Microsoft, We really don't know that :shiftyninja: Link to comment Share on other sites More sharing options...
Sheppard Posted November 23, 2006 Share Posted November 23, 2006 Im sure i remember him ages ago taking some pics from microsoft campus. Link to comment Share on other sites More sharing options...
+dnast Subscriber² Posted November 25, 2006 Subscriber² Share Posted November 25, 2006 We really don't know that :shiftyninja: I saw him mopping the floor when I broke into J. Allard's office. Link to comment Share on other sites More sharing options...
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