Microsoft Seeing Red With Xbox 360
By Ed Oswald | Published November 23, 2005, 2:03 PM
In order to be first, sometimes you have to pay the price. That's what Microsoft could be doing with its Xbox 360, according to analyst firm iSuppli.
While the firm's teardown of the unit gave a peek into the dominance that IBM will have in the next-generation of gaming consoles, it also showed that the bill-of-materials cost for the Xbox 360 Premium reaches $525 USD, 32 percent higher than the $399 USD retail price of the device.
It should be noted that iSuppli's findings do not include the projected cost of manufacturing each unit, so the total cost to Microsoft likely runs even higher.
According to preliminary findings by iSuppli, the custom-built triple-core PowerPC chip from IBM accounts for 20 percent of the materials cost at a price of $106 USD. In fact, the chip and integrated silicon alone account for $340 USD of the total bill-of-materials cost.
However, the most expensive single part in the new Xbox 360 console is the ATI GPU with embedded NEC DRAM, which cost Microsoft an estimated $141 USD.
But why is Microsoft taking such a big hit on the Xbox 360? More often than not, console makers will take losses on the devices, hoping to make up the difference through software and licensing fees. The lower price also allows for faster adoption of the console.
According to Andrew Rassweiler, manager of iSuppli's Teardown Analysis Service, Microsoft should see at least $50 of savings per unit plus other cost savings as yields improve on the parts within the Xbox 360, such as the CPU and GPU.
No matter what the price, in the next generation of gaming consoles there is one clear winner: IBM. Its chips will power the Nintendo Revolution, Sony's PlayStation 3 and the Xbox 360.
"While it's too early to say whether Microsoft's Xbox 360 will prevail in the gaming market, IBM is a sure winner in consoles due to its across-the-board design wins," the firm said.
I'll stick to computer gaming, thanks.
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Got a lil present for all you M$ fans bashing on Sony :P
http://www.cnn.com/TECH/...comdex/gates.30.240.mov
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hay maniakmx3 you need to shut your mouth about xbox360 or else im going to have to bust you up.
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Dude...grow up ok? No need to be flaming about someones opinion...
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xbox360 is the best system Ive ever had if sony tries to make a better system then xbox360 hes going to make a fool out of him self.
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Wow I love mine no problems at all. What a great system. Watch out Sony your going down!
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ok From what I have heard, the X360 is nothing but a peice of junk, I've gone to EBGames and demoed it, and felt like I was playing COD2 on my PC. NO difference. So how everyone has been saying the 360 is better than PC...Not true, and I am NOT Impressed.
Now, From Press that went to E3, I have heard that the PS3 is "Radical" "Jaw Dropping" etc etc...And it X360 VS PS3 Round ups, the PS3 makes the 360 look like a Gamecube. BUT There are estimated prices UP TO $599 for the PS3. I have read anywhere from the usual price of $299.99 all the way up to $599.99 for a PS3, It seems that the PS3 cost ALOT More to build than the X360 did....
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Oh and by the way, even if the PS3 is $600, it's still worth it, Beacuse once BD-DVD (Blu-ray) replaces your standard DVDs. You're all gonna have to go out and get a blu Ray player, So you're lookin at $399 for your X360, plus another $399 for your Blu-Ray Player, I'd rather buy a PS3 and have a better gaming system, and a blu-ray player :)
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yea sony sure does wish the blu-ray will replace dvd's...just like they wished their mini-discs will replace cd's (everybody now has MD players and buys nothing but MD's right??). Even if blu-ray somehow does become the standard, blu-ray players will hit the sub $100 mark very soon just like dvd players have.
EDIT: good luck sony with yet another propietary format that you're trying to push down everybodies throats:
http://news.com.com/Cost...9815.html?tag=nefd.lede
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Sony isn't the only company supporting the Blu-Ray format, over 70% of the movie industry is also pushing the blu-ray format.
Today everyone is switching to HD-TV, with Blu-ray you can get the full advatage of HD with Blu-ray's capabilities. We're talking a 2Megapixel x 1Megapixel Resolution! Much better than the est 1600x1200 Resolution by HD-DVD.
Just remember...we thought VHS was gonna be around for ever!...oh! wait! look! DVD!! why? who uses analog televisions anymore? We all went Digital, BUT now the Digital Era is over...now it's time for High-Definition. Blu-Ray is the format of choice for HD.
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There goes your precious Blu-Ray: http://www.betanews.com/...16_Terabytes/1133197797
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The movie industry won't use that technology, do you honestly think the MPAA would allow 12 HD Format Movies on ONE Disk?
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Ok, the X360 wasn't meant to replace a PC. At best, it plays games as well as a mid to high-range PC. Most 'real' gaming rigs will play games quite a bit better than the X360. The PS3 will have a better CPU, but the GPU that is on the X360 is poised to best the PS3 by leaps. It will be interesting, however, I will continue to boycott Sony/SonyBMG/SCEA for SonyBMG's failing to act in good faith towards the general public in regards to the rootkit/DRM issue as of late. Sorry Sony, you had 3 chances and blew them all.
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I agree, and sony will be punished and then forgivin as all other companies that have made mistakes. Don't forget, M$ Has made alot of mistakes in the past as well *cough* Windows 97 *cough* Windows ME *cough* lol
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If you haven't already, check out 360forfree.com. I got a free 360 from these guys. They must have had a pretty good stock cause I got it by Thurs. Been playing ever since. Highly recommend COD 2.
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Nice try spammer!
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The main reason not to buy an Xbox is because since microsoft wanted it to be ready for xmas. They still have some problems. I have read and know people that their xbox is given them problems. Just google Xbox 360 problems in google news.
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so a fraction of a million xboxes is causing problems and it's suddenly a huge 360 design issue?? What electronic equipment do you know of that doesn't have a chance of being defective when you buy it? You know what you do when that happens?? You exchange it for another...I know it's difficult to understand but it's true, try it.:)
Problem with xbox is it's so limited that if you get a defective one...they won't have a new one to give you for a while.;/
Also...setting it up ona rug and covering all the vents and then later complaining that it's overheating doesn't count as a design problem.
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i luv microsoft and everything, but I doubt this analysis to be valid.
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You already said that in other posts, and you're wrong... go read the responses, understand them, and get over it.
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pissed off because you bought a 700 dollar xbox360 that's unstable? the ps3 will smoke this thing anyways on hardware even with a crappy rootkit in the background, the overhead would be comparable to xbox live:), red will be something the xbox division must be getting used to. sorry fanbois, the marketing department's "we practically giving this away" doesn't work on used cars and sure as hell not on expensive electronics.
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I've seen some really stupid trolls on this site in the past, but you are by far the biggest idiot in the entire world. Learn to read other posts and you can answer your question.
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i understand the widespread theory, but I will not buy into it until I see actual numbers from MS. As stated previously, they're not making much on the hardware, but this article is a PR release. Projects have budgets, I don't think they give ATM cards to Bill's account to all the employees:) The size of the contract negotiated would have allowed a reduced cost per unit, and when looking at parts used on first Xbox, I think it's safe to assume that quality control was not optimal. they go with the lowest bidder or a subsidary owns the assembly plant. either way it's cheap. as others and I have said there's quite a few more mouths within the company for cost of materals being as high as this release states. The budget of an entire project is a larger entity than cost of materials, asses have to be covered, bills must be paid.
my 2 cents...my opinion is no more valid than you or the person who provided this analysis
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thats what so funny becuase your ganna be wrong. its ganna be to dang expensive.
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How is this a PR release? It would be in MS's interest to say they're making money on the hardware, not losing. This isn't PR, this is just fact. And all your points you're trying to make with no proof whatsoever is true for any company manufacturing any new product, so your precious PS3 that will "smoke the xbox 360" would be no different. I just fail to see any negative points you're trying to make about the xbox that wouldn't apply to the PS3. Nice try tho'.
BTW...Sony will be losing even MORE money then MS per console. They have already said they will be selling at an increased loss in an attempt to get blu-ray into the public hands.
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LOL we got a genius over here that doesn't know how to spell love and capitlize words that thinks he knows better then the expertsby coming out and saying "they're wrong!" with nothing to back up his brilliand statement. I think he wants a cookie!!
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how is a public release stating we're making a bunch of money on these devices that are pretty expensive going to boost sales? haha, i don't care about any consoles. i'm happy to see IBM banking though. iSuppli is speculating and I disagree, chill out kids.
EDIT: I DON'T DISAGREE THEY'RE SEEING RED INITIALLY ON XBOX360 SALES!!! ISUPPLI's BREAKDOWN IS A SIMPLE ANALYSIS, NOT VIEWING THE LARGER PICTURE AND OVER ESTIMATING COST OF MATERIALS.
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They don't need a public release on console profits to boost sales, that's not the purpose of these press releases. How do the stock holders react to a press release that they're losing $126/console? How does the market react to such a loss? That's the bigger picture...coming out and saying there's a loss per sale is not some kind of marketing trick. Trust me they rather not say they lose money, but by law they have to tell the public.
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Oh, and you don't know how to surf? Get your self a browser(www.mozilla.org www.opera.com), install it, type in www.betanews.com in the address bar, and press enter.
BTW. Holloywood is a movie industry, and there are some companies that give away the Xbox at no cost.
And it's Microsoft... even I know that.
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You're a sick little fakir, that's for sure... buzz off spam monkey!
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I don't know why you called him sick, but it is defiantly off topic... :|
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Now lets see for a moment....is it offered as an introductory price or The Price. In the latter, would there not be a lawcase lurking.....is predatory pricing, cornering market, buying market, plain dumping......
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What the hell are you talking about? Predatory pricing? Market cornering? Please! Playstation and Nintendo are going to be comparably priced when they're released.
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I have no idea what he's on about either, but I think 399 USD is still a bit much for a console that'll probably (may not) break in half a years time.
The old PS1's were 100 AUD ^_^
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Considering the functionality and the hardware involved, it's a reasonable price, although I agree that it's a lot for something that *might* break down... I suppose that's what warranties are for.
On the other hand, prices do drop after the first year, and continue to drop after that, so if that's a concern for you then waiting is the best course of action.
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I'm going to wait. Mainly for MS to ship more, but also so that these reports of "bugs" get sorted out and the price to drop :)
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Congrats! You finally made a sensible post! :) I agree too, although from what I've read on various gaming and tech sites (eweek.com and 1up.com), most of the issues have been overheating issues because people decided to set their systems up so that it covered the ventilation holes. Even so, better to wait it out... let the prices drop, let production increase, and let any bugs get worked out.
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In related news, the price of tea in China has just dropped...
What are you talking about again?
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100 comments??? Obviously NOBODY is actually playing the Xbox! ;o)
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lol more like everybody that preordered them in 2004 is playing the 360...and everybody else is here venting since they're sold out everywhere. :)
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Some of you can not comprehend the basic facts of business, sometimes you have to lose a little to make alot.
Why are some of you smashing the PS3, let me guess your father works on the R&D department for Sony and you messed around with it on take your son to work day? Give it up PS3 is going to be one killer machine, and you must remember as much heat as sony has gotten lately with the ROOTKIT, you must understand only us few nerds even know what that is... Most people buying these consoles are parents racing to the stores for you at 5 AM, and most of them don't even know what it is other then the fact you told them SONY PS3. Sony is not new to this market guys, they took on Nintendo years ago whom was the leader and shut them down pretty quick to number 2. Sony PS3 is not going anywhere, and I am sure that it will have stunning graphics and all the goodies that XBOX live has... It basically is going to boil down to whoever has the better games, do you buy a console based on its specs or what you get to play?
Back to Microsoft they aren't quite losing on the systems. They are already paid for and where along time ago. They will have some losses at first, but the liscening fees they will make back along with all the other services, over priced remotes, memory cards, etc... They will make a fortune, it is simple business people, why can't some of you understand this? Of all companies we can all agree Microsoft knows a thing or two about liscensing fees and "strong business tactics" to corner developers, etc. into going with them. They did not become a multi billion dollar corporation because they are just ok at it, no they are without a doubt one of the best!
Compare it to the airlines pre 9/11 etc when some where very profitable. Do you not think American Airlines takes a loss when they lease multiple 32 million dollar 757's? Of course they do, they can't afford thoes planes, they lease them knowing that with ticket sales, proper marketing, and other small areas of revenue they will make up the money. Microsoft is not the first company to use this kind of business tactic, many do thus it is a common practice. As many have stated already if you are not familiar with this, you are either still in high school; or you need to go to your local junior college and take a decent business class / economics class if you ever plan to be in the business world.
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"Back to Microsoft they aren't quite losing on the systems. They are already paid for and where along time ago."
I'd LOVE to know where you got this made up fact. FACT is...MS never made a profit on xbox as a whole (and I don't just mean sales of the system itself). MS finances are public, look them up.
Oh here, these will get you started:
http://www.microsoft.com...nonflash/10k_fr_sp.html
Here's something you might actually be able to understand:
http://hardware.gamespot...tory-ST-9399-1900-4-4-x
Quick quote:
"As it did last quarter, the Xbox is showing signs of improvement. While it won't turn the fortunes of Microsoft Corp.'s game division around--it still loses money for the software giant--it did narrow the losses for the second quarter in a row. "
Read some facts next time before making up your own.
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Well presented! :)
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OK, because I'm bored, I just read through the posts here again... the only PS3-related comments I've read are ones talking about how it will be like previous Playstations and the Xbox systems and take an initial loss. No bashing, no smashing, etc etc. In fact, the only non-cost related comments came from me saying that I preferred Playstation because of their RPG market.
So while your rant is amusing, it's entirely off base. I won't waste time repeating my own posts to others and that of your other commenter, they do a good enough job debunking your tirade.
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Can we lobby BetaNews to turn the comment facility into a blog?
This is nutz.
I'm out.
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haha, somebody in marketing give credible info? they're not selling these units at a loss. The processor is obviously the most expensive item, but the rest is obviously not, sorry rijp.
3 core processor = 105
ati gpu = 140
20 gb HD = 15
motherboard(integrated wifi,audio) = 50
512mb gddr3= 50
dvdrom= 20
case= 20
TOTAL = 400
These are all figuring high costs of manufacturing, but the rest of these items besides the processor are variations of common pc parts made on large scale(the assembly lines have been rolling) for quite some time now. So I believe it could possibly have broken even(maybe) after research and development(directX) and the various other partipating divisions get a check for their work. any idiot that claims pc materials costs are that high(speaking of strictly the components) knows nothing or has personal interests to generate hype or spread propaganda.
A more credible article would have pointed out how the hardware is not going to be where Microsoft reaps the high return on their investment of the xbox360. Charging a monthly fee on Xbox Live for an internet connection you have anyway, games, special merchandise. There's a lot more money to be had in the multiple year life span of the device.
iSuppli =
Who We Are
The electronics supply chain has grown into highly complex web, spun from countless interdependent relationships spread throughout the globe. If everything runs smoothly, the electronics industry can achieve remarkable success. However, if just one link in the chain fails, the repercussions can be catastrophic for companies in completely different industries and regions. It’s not hard to find examples of such supply-chain failures; trade and business publications during the last few years have reported such events
How We Can Help You
iSuppli research is tailored to meet the needs of the supply chain, with frequent updates that stress immediate issues like pricing, lead times and availability.
iSuppli research is intended to help companies:
* Better create and manage demand
* More efficiently allocate capacity
* More effectively manage inventories and production plans
* Enhance targeting and introduction of new products
* Improve delivery and customer service
* Reduce supply chain cycle times and disruptions
* Decrease overall supply chain risks and liabilities
* Cut costs
And unlike many firms that maintain only a regional focus, iSuppli research is global, with analysts or operations located in every major electronics geography of the world, including emerging markets in China and India.
...now back to our featured presentation.
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Well, even with the prices you outline, you barely put it at cost... which still means no profit.
First of all, you overlook the cost of game controllers, cables and connectors, and the power supply (which was obviously a low-end one because of the overheating issues reported).
Second, at no point in your rant do you take into consideration the cost of labor involved in manufacturing. You mention Chinese and Indian labor, but even at "slave wages" you still have a cost that is unaccounted for in your explanation. There are still employees to pay for their efforts.
Third, did you take into account the costs of shipping, packaging, or documentation?
Fourth, even with Xbox Live services, there are servers and bandwidth to pay for, which means yet another cost to add in.
Before you start spouting off nonsense about economics and development processes, I suggest you do your homework and know what you're talking about first.
**EDIT: A couple comments were retracted after re-reading the initial post and clarifying someting I initially misread.
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the article was concerning the cost of materials, but apparently you didn't even read it.
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On the contrary... you tried to argue that the article was wrong. I not only pointed out that you were the one who was incorrect, and then went on to prove that it wasn't just the cost of materials that was at issue.
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" haha, somebody in marketing give credible info? they're not selling these units at a loss."
Your whole argument is based on "MS not selling these units at a loss"...you listed SOME (not even ALL!) materials to back up your statement and he proved you wrong...that's all there is to it.
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Good job for IBM!
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you guys are smoking crack.. M$ ain't losing anything on the 360. the thing is made in communist china by slave labor. almost all the components are made in china as well expect for a few parts... when suppliers can sell the premium units for $275 each in lots of 5, you know damn well it don't cost that much to make. the numbers are highly inflated just like the stock market. and there certainly isn't no shortage. WSJ had a story a week ago that said M$ has 5 factories in China making the XBOX 360 and since Sept. 1st they were churning out tens of thousands of them each day.. so do your math. 75 days since Sept. 1st and the tens of thousands claimed to be churning out. They have well over a few million ready for sale... M$ is holding back the supply to inflate the demand... and it's working...
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So... you are saying that somehow the Xbox 360 is magically cheaper than the production of the Xbox (which MS still hasn't made profit from yet).
That somehow they are able to buy silicon wafers for cheaper than any other company, and have significantly better yields than Intel or AMD?
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Yields for the ex-box360 will be VERY low compared to Intel and AMD desktop CPU's, as desktop CPU's get graded by speed capabilites. Console CPU's either work, or get scrapped...
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Are you pulling this info out of your ass? I have a marketing rep that works with MS, they know the head of the Research and Development team. First of all, China may have 5 factories, but they can't produce 10's of thousdands a day.. I don't care how much slave labor they use. MAYBE 10,000 a month. Then, the XBox costs over 550 dollars EACH, you twit. The orginal Xbox costs MS over 400 to make, and they sold those for 299 orginally and as low as $129.00. So they were losing on the other Xbox from day one. They make it up in licensing software, why do you think MS wants to get vendors? So they can get licenses.
And shipping those units, even though they are manufactured, is a whole nother matter. Packaging, shipping, marketing, delivering.. You obviously don't know anything about supply chain.
So go back and play with your game boy, because you are not ready for an Xbox. Just because you are jealous you didn't get an XBox 360, don't try and slam the product. They aren't holding anything.
And you have a VERY short memory, EVERY new console from Xbox, Sony PS2, Dreamcast, Commodore, Atari, Gamecube, they ALL do the same thing, EVERY new product.. It takes time to ship and get ALL the units ready to sell. You can't produce 10 million units if you can't sell your first million, then you just wasted all that money, its called supply and demand. They ramp up production, get enough units to generate interest and go from there.
So pipe down, because your knowledge of what's going on, is severely lacking.
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Easy on the coffee there....
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Slave labor! Woooo! What century are you living in kid? This is Microsoft, not Nike...
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Ahh, this isn't news to me. Microsoft is famous for taking losses with the original X-Box. And they can do it too, they are filthy stinkin' rich.
Their original plan for taking such a huge loss was to muscle their way into the market. Now they are doing this to sucker punch Sony in the groin.
And to clear things up, not every console manufacturer takes losses on their systems. Nintendo generally doesn't take losses, and they make it clear. They end up sacrificing raw power for innovation, which is of course...cheaper.
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Why does this debate have to happen with every major system release? It happened with the original Xbox, Playstation 1 and 2, as well.
Anyone who foolishly believes that there isn't a loss on the cost of the hardware doesn't have a clue about how businesses operate.
The simple reality is that these companies make their money on the services--- the Xbox Live network fees, the game licenses, etc etc-- not the hardware.
As I've told others... do your homework and know what you're talking about before you post rants like this. If you looked at the Annual Report for Microsoft for last fiscal year, you'd know that one of Microsoft's biggest "drains" is the Xbox.
Microsoft doesn't care though, for now, because they're in this for the long run. Over the long term, they know they're going to be making money from the services involved.
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All professional trolls inject their coffee direct.
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Slave labor = 5/5 stars
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Oh, they're gonna get even more red as the players see this stinker's instability... :(
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Yeah, can prolly blame most of that fault on ATI.
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Either one of you kidz (excelon2005 / Don Juan) got ANY proof of those allegations?
Thought not.
Just fanboiz shooting off their mouths again...
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Here's the proof you're looking for: http://news.google.com/?...Full%2BReport&hl=en
As much as I love Linux and open-source, the unreliability makes me wince because what profession will be blamed for this? Engineering, one way or another. What profession am I aspiring to be? Electrical Engineering.
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Yea...proof of what?? That some people got defective consoles?? Is that a surprise?? All electronics you buy have a risk of being DOA...you got a few xbox 360's out of a million that are crashing and suddenly "oh there's a big problem with the xbox's!!"...the 360 is such big news and is so limited in supply right now that ofcourse you're gonna hear about every one that's defective.
Just about all new hardware releases have initial production problems.
PSP had a problem with the screen, how many people bought a PSP with dead pixels?? I traded mine in twice to get one that had no dead pixels. Didn't the PS2 had some problems with its CD drive? Matter of fact I think the PS2 had alot of problems...there were 12 revisions to that console.
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Eh, minor stuff. It's to be expected that a few units will be gonzo when that many are dumped out on the mass market. Now if 10% or more are FUBAR then THAT is a problem.
As to EE, good profession to be in. And no, we don't blame 'em when things go wrong.
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So the reports of the Xbox 360 overheating because some morons placed the ventilation directly on the floor/desk/whatever and blocking off the airsupply qualify the system itself as "unstable" ?
Wow... that's profound.
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I don't see what the fuss is over the Xbox 360.
I own the original xbox and must say that, while I think it's good, I prefer PC gaming over any console.
Through... one thing my PC provides that my Xbox doesn't is extreme graphics lag and freezing... *walks about muttering*
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I agree in that I enjoy X-Box, however,
find PC Games better. The one major reason for
this is, Console's don't let players make maps,
levels, and the things that usually make a game
thrive. Take starcraft, warcraft, duke3d, doom, doom2, 3, heretic, unrealtournament, simcity(all versions), the sims(all versions). They all allowed making maps or levels, and all thrived.
And on Consoles, they all were stuck with default maps.
(unless bonus packs or xbox live updates count, I count them as bonus defaults.)
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I agree. The lack of map-making on consoles is a let-down. Map-making in Unreal Tournament gave the product several more years of life than it would otherwise have had. It also gave developers a useful insight into what gamers atually wanted. They've even been known to recruit good map-makers. Age of Empires offered a new map every time, which is why I still play it today.
On the plus side, I think PGR3 is to include the ability to make custom tracks, which can then be played solo or shared online via Xbox Live.
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There are 2 major benefits to a console. Patch level and hacking.
Everyone with a console with the same game, is on the SAME exact revision. There is not difference.
ALL consoles play at the same level (at least at the time of production)
And you can't hack a console game and put cheats like you can on a PC. That's why people like console gaming..
ITs basically an even playing field. Another reason why games like online game play..
I like PC game better myself, console games also appeal to those families that can't afford to buy a new video card, hard drive, OS, and CPU every few months, so you buy a console game for 400, and you are done. Nothing else to buy.
That's where the appeal comes in.
I would wager, your machine is probably a lot like many games, like myself, we invest hundreds, maybe thousands to build the perfect PC, so of course your machine and my machine would be better, because we built them with our own specs..
But you are on your own with respect to compatibility.
A console game doesn't suffer from these problems, all the games are compatibile, all the games work the same way, and all the games play the same way, all this for 3 or 4 hundred bucks..
Not a bad deal if you have 3 or 4 children.. buy a new game every now and then and you are good.
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They don't need to make maps. All they need is to be hooked online to a server and have the admins make maps.
Done deal.
And that IS the marketing model of the future.
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These consoles have hard drives so custom maps are not totaly out of the question in fact Microsoft would be smart to do it as a feature if you and your friends have the same custom maps xbox live could hook you up together of course you would need a gold subscrition to do it.
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My problem with Xbox isn't the system or company that makes it... in fact, the specs of the system are outstanding.
My issue is that I'm an RPG kinda person (single player, not multi-player), and the number of enjoyable RPG's on Xbox is exactly... zero. Should that change, I will look into it more.
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MS has key developers that worked on the final fantasy series making two games for the 360. It won't be "final fantasy", but it might as well be considering the developers. I don't have the details, but I'm sure you can find it.
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Star Wars: Knights of the old republic. Star Wars: Knights of the old republic 2.
Just to name 2 RPGs.
Enjoyable, even if your not a SW fan ^_^
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For once I don't have much reason to argue with rijp.
"There are 2 major benefits to a console. Patch level"
Patch level is a problem is a bug or exploit is found.
"And you can't hack a console game and put cheats like you can on a PC. That's why people like console gaming.."
You can, but it's not easy and can break the console.
"I like PC game better myself, console games also appeal to those families that can't afford to buy a new video card, hard drive, OS, and CPU every few months, so you buy a console game for 400, and you are done. Nothing else to buy."
I know what you mean here. All my hardware is at least 2 years out of date cause I don't have the money to buy new stuff.
And I was wrong when I said above that my Xbox doesn't lag. Today, it offered a bit of lag during a major battle. (A bit meaning 2 minutes worth :( )
"Not a bad deal if you have 3 or 4 children.. buy a new game every now and then and you are good."
If you have children, you really should be encouraging them to go out and play with other kids, spend time outside instead of couped up in front of a TV/Computer/Console ^_^
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Your problem is that single player RPG is a dying breed. It's like the old Freespace saga - going, going...
...gone.
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So why would I play them on Xbox when they're also available on PC or Playstation?
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That's not really true at all... there are actually a lot more RPG's today than there were back in the day. You should check out a site like RPGamer.com if you need more evidence that there are plenty of RPG's out.
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As I said, if something worthwhile comes out on Xbox, I'll reconsider my intentions to purchase one. :)
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Carefully re-read what I wrote. I said "single" player RPG. RPG is indeed increasing but the trend is multiplayer online RPG and that will only accellerate.
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Less hassle than a PC, better audio and graphics than a Playstation.
Not too hard to figure out.
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I read and understood what you said... I was stating that you are incorrect. :)
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Not really less hassle than PC considering that Tech is my life, so I keep up with the hardware. I've seen plenty of dazzling effects on both systems in terms of graphics, and as far as sound goes-- that's really more dependent on the quality of your TV or stereo system, wouldn't you say?
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Fable too...
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Damn, just when I'm convinced that you are totally useless...you go and make sense! Well said!
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Nope...single player RPG's are FAR from dead, there are MANY GOOD single player RPG's out right now and many more coming out soon (heavy hitters oblivion and NWN2 comes to mind). MMORPG's are popular ofcourse (look at WoW! 3.5 Million subscibers!) but it's certainly not a "replacement" for single player rpg's, it's a different market and a completely different play style...there's room for both. :)
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Hmm, if I listened to my parents every time they told me to get off the computer/game system and go outside... I'd have been one miserable kid, lol... I hate being outside any longer than I have to be. :)
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Got mine in today. So far I like it. Been playing CD 2. Great game. Did I mention the xBox was free! Joined 360forfree.com and signed up for a free trial of efax (which I canceled) and received it today. Highly recommend the site.
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I bet. Can somebody delete his post? He's advertising like all the other scumbags for their stupid free scam sites.
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how many referals did you need?
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Yeah...sure you did. Whatever, he is promoting the 360forfree.com site..
Don't believe the hype..
I don't believe you won a free Xbox, sorry.
They aren't going to give you a free Xbox for nothing, you have to sign up for credit cards, stuff you won't use, trips.. Yeah, you got a free Xbox.. Whatever.
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I smell fresh, hot SPAM!
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Microsoft might as well not even bother working so hard on the Xbox. They will build another empire that within 10 years they will abandon, just like they're doing with MSN.
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Dude they are not abondoning MSN they are renaming it to Windows Live Messenger.
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Seems like IBM screwed microsoft sony and revolution with their expensive cpu. I wounder if Sony or Microsoft evens knew that IBM was also making a processor for their rival. Imagine IBM's face at E3.. lol "um um it wasn't me"
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well that what sony is doing. what the PS3 is goign to sell for is going to cost them about at leat 3 times what its going to sell when it comes out.
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Give me a break... I'm sure Microsoft and the other companies had a deal. Plus, they buy these stuff in bulk (millions) anyways... I'm sure they get a 60% discount on everything. It probably only costed Microsoft $145.99 per Xbox 360 core system.
Again, we're talking about Microsoft here; the software supergiant. They're not stupid. They wouldn't sell you a product that would COST them more money to make.
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It's a known fact that they sell for less than it costs to make, don't waste your energy trying to despute it. And the retail stores sell them for only $1 profit. Don't try and despute that too, cause I know that first hand.
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Microsoft are only recently making money on original XBox hardware, for a very long time, the hardware has been a loss leader.
The XBox360 will be the same.
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You are the one that is stupid.. MS isn't looking to make money on hardware.. they never have.
They are looking to get you BUY software, so they reduce the cost to the consumer for buying the hardware, because you won't KEEP buying it, you only buy it once, but NOW there are hundreds of games that you COULD potentially buy, and each one is 50 bucks. That's where they make the money..
This is the same strategy other companies use, its called marketing. They will give away a Razor. Make you KEEP buying the blades for life.. that's how it works. When you graduate, junior high, maybe you can take a night class in community college for Economics, then maybe you will learn something.
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Wow a dollar? It depends on your level of buying power, so I will dispute this. It may be a MSRP of 400 but it doesn't mean they have to SELL it at that rate.
So you are telling me, that Bestbuy buys them at the same price as Walmart? BS! Walmart has a much, much, much higher buying power. They will buy these units at maybe.. 225, or even 250.. then sell them at 300 or 400. I can guarantee Walmart is making a higher profit then best buy on EACH unit, so I WILL dispute your findings, because $1 profit isn't the same for EVERY vendor, that's crap. Each one has a different profit margin... And its more than a dollar.. sorry, you are wrong.
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rijp,
You need to calm down and stop acting like an a** towards people who are posting here. I'm just quickly looking and seeing just how condescending you're being towards almost everyone. Relax please.
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LOL...it's funny how you come out and make these great "guarantees". Walmart is buying 360's for 225-250 huh? Walmart WISHES they could do that, go talk to a walmart manager and tell him what you think and see if he can keep a straight face while you're tell him that you "KNOW" that they have this magical "buying power" with MS to reduce the price down to $250.
Retailers probably are making a little over $1...but I'd be very surprised if they were making anything over $20/console. I can't guarantee it like you can...but I can guarantee that I'm MUCH closer to the mark then you are.
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You idiot. What software is out for Xbox 360? Do it require additional software? No!
Microsoft would not dish out the system to get rid of their money. They are selling cheap defected products to make money. That's why they're recalling a bunch of them right now.
The only game from Microsoft that is making money is their Halo game. Everything else comes from EA and other big video game companies.
You would be stupid to believe that firm's research.
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Selling "cheap defected prtoducts"?
Ahhh - typical anti-MS bias.
Given the amount of units hitting the market, some defects are to be expected. Guess the Sony PSP and iPod Nanos were all paragons of perfection, eh?
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"Everything else comes from EA and other big video game companies."
--- It's called licensing revenues. You should research it before continuing your rambling and insults about other people's ignorance.
In fact, I recommend an economics or business accounting class before you ever post about the business process again.
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He may be a condescending a**, but most of the time he's right on the mark with his analysis. I can't verify his claim on this one to the dollars, but he is right that businesses are making more based on buying and selling power. Best Buy and Wal-Mart are both making more on their sales than your local GameStop or Electronics Boutique store at the mall, unless of course those stores are the only "game" in town, and then you can probably argue that they are making more on their higher volume sales.
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I thought I had read the most stupid assumptions passed on as actual facts on other threads, but you sir take the cake.
The whole point of making a console is to make money from LICENSES!!!!
For example, EA wants to make the great new uber football game for the 360. First and foremost they have to dish out the cash for the devkits (500k per kit I believe it is). Now out of every single copy of said game that is sold, Microsoft recieves a little chunk of it due to the license fee.
Thats why Microsoft and any other Console Maker doesnt mind loosing money on the console, they get it back through other sources of revenue.
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Yup, it's the printer business model; sell the printer for nothing, make money on the ink. Although, with Microsoft you have to believe they have a little something else in mind, like complete monopoly, world domination, something like that.
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Agreed, but sometimes you can gain a little credibility by NOT being a total d***. That aside, anyone who doesn't think Walmart is making a healthy profit AND good money on volume just doesn't understand the behemoth that Walmart is.
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No, we don't have to believe that at all, actually.
Why does it always have to be something sinister? Why can't it just be that, just like EVERY capitalist business on Earth, they just want to make some money?
I mean, Google is no different, and as much as I dislike AOL, even I concede that money-making is their goal. Just because we don't like their method of obtaining the money doesn't make them a sinister company... in a case like AOL, their method just makes them incompetent.
**Flamers be warned: Don't waste your time by going off topic and debating the issue. We all know about the DOJ and EU cases declaring Microsoft a monopoly in some market or other, so big flippin deal... You can cry about it more when the Open Source movement dies... at least, *if* it dies, which I'm not betting on.
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You HONESTLY think that walmart is making over $100 per console sold?? That's crazy, if you can show me some actualy proof of that I'll believe it, but till then walmart is barely making a profit of the xbox's just like everybody else. :)
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Not sure about the others, but I can't identify a price, which is why I didn't mention it in my response. I'm just saying they're getting more than $1, and that's just common business sense of buying/selling power.
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Wow, didn't mean to land on your last nerve there. Sensitive little softie? Forget DOJ...OJ...DJ...whatever. Evidence of predatory practice by your heros are too prevalent to (1) bother to argue about and (2) ignore. Those who do, do so at their peril, which is why no one ignores it anymore. Be a fanboy all you want, just don't be ignorant!
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I said a "healthy" profit, right? Yeah. How much is unknown by anyone here, so you missed the point.
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What do you consider a "healthy" profit? Is $10 a "healthy" profit?
Lets put it this way...if it costs $520+ to make an xbox (as has been said by many expert analysts and will probably be said by MS), and MS says they're losing $126/console...that would mean your all powerfull walmart's "healthy" profit can't be over a couple of dollars. MS isn't selling it to anybody for that much less then $400...otherwise they'd be losing alot more then $126/console.
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I could see these stores selling for next to no profit because they just like the console makers will be raking in money from lots of game sales and some repeat sales since everythings on cds now unlike the good old cartrigages that could take a beating and still work lol
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No, you didn't strike a nerve the first time... buy you sure did this time...
Did you really intend to respond to me just to do what I said some flamer would do... cry about things we already know about (which have already resolved, mind you) and have absolutely NOTHING to do with the topic of this article? Did you really intend to attack me by calling *ME* a ignorant, sensitive little fanboy softie-- simply because you didn't have any other merit to your repsonse? Because that's effectively what you just did.
First of all, let's deal with the name-calling. Calling me a hero-worshipping ignorant fanboy is extremely indicative of your style. Be a flamer all you want-- just support your claims with facts, just don't support it with name-calling. However, since you made the claim, I will say this-- The fact that I have spent my life in a 13-year career that not only requires but encourages me to actually support, use, and know Microsoft's products inside and out does not make me a fanboy, nor does it satisfy your claim that I am ignorant. I've spent the last 13 years supporting and teaching businesses and individual customers how to effectively use Microsoft products without issue... so although I'm heavily invested in Microsoft from a support standpoint, calling me a fanboy is downright pathetic. I support and use a high number of non-Microsoft products as well, and I am prone to criticizing anything and everything incompetent-- whether it's your own responses to me or the fact that some random product, regardless of company, is useless.
Second, let's talk about your claims of predatory practices. I'd be thrilled to entertain the discussion *IF* you could site recent incidents to support your claim--- that don't relate to the long-concluded DOJ trial (unless you can document clearly that the agreements have been RECENTLY violated), or the concluded EU case (which, incidentally, has proven just how incompetent the EU is since they forced a solution that has not accomplished their goals yet ignores the amount of OpenSource and 3rd party competition in the market).
Furthermore, ANY predatory practice that is as prevalent as you claim most certainly SHOULD be argued about, since no resolution will come without appropriate action.
Next time you open a can of name-calling on me, make sure that you do it with a little more tact and a lot more fact than you did this time. That being said, I believe the topic of this article is about Xbox 360, not outdated, resolved court cases.
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Nothing there to change my mind...you still sound like an uninformed (or blissfully ignorant) sycophant. Like that better than 'fanboy'?
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As soon as you manage to get elected to the Walmart board, you can tell us what the profit is. Until then, all you have is mindless speculation. I do know this, like them or not (and I don't) companies like Walmart sell NOTHING without making a good profit.
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Yes!!! That's a fact!
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"I do know this, like them or not (and I don't) companies like Walmart sell NOTHING without making a good profit."
Really? Have you ever worked for a company like walmart?? You think they sell everything at "good" profit? Most big ticket items (especially computers) sell at very little profit...you know where the profit comes from? When they sell you that printer cable for $50...that's about a 200-300% markup...now THAT is profit. When you buy a warranty...that's pure profit, they love those. Computers especially (and the xbox is a computer, only it has an even lower profit margin right now) have very little profit, they sell them to you so you'll buy the warranty and accessories, and they sell it in large volume (so even those few dollars do add up).
and that is NOT speculation. I hope you know that you don't have to be "elected to the 'xxxx company board'" to know their profit margins...if you don't know that then I'm arguing with someone not out of HS yet.
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You can say anybody is making more then $1 with almost 100% certainty. What kind of figure is $1?? Can you say with the same certainty that they're making more then $10?? That's not something you can put your alot of money on...you can't say it's a fact that they make more then $10...you can probably say it's a fact they make more then $1...that's not a very impressive assumption. :)
It's like saying it's fact that I make less then $1 billion/year...you have no idea ho wmuch I make, but you can pretty much guarantee I don't make that so ofcourse you can say "Yes!!! that's a fact!"
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That's what I thought, all name-calling attacks, but nothing to back it up. Moving on to more important matters.
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Gotta love those annual reports, eh? :)
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Oh so one post you're calling me names and the next you're rejoicing in my factual business sense? Niro is right on... it sounds highly plausible so suddenly you jump to my side to make yourself look good. At least when I have facts, I'm not afraid to post 'em, and when I don't, I make it clear that I'm speculating based on good, credible information.
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If you made a decent argument, there would be something to discuss, but all you do is try to deny well established facts. I don't need to back anything up, it's been done by the courts AND public opinion. The fact that you remain unconvinced that Microsoft's motives should be viewed cautiously is surprising, even for someone unconvinced of their guilt. For that reason, I assume you are a fanboy and would think you would be proud of the distinction. As for name calling, you may want to review our thread and see who stepped outside the boundries of polite conversation first.
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My agreeing with you has nothing to do with what Niro said. I agree with people when I agree with them, it's not personal. I've rarely seen someone so offended by a compliment. Panties in a wad?
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"You HONESTLY think that walmart is making over $100 per console sold??"
That's where we started, with a gross exaggeration of my point by you. You still haven't made a reasonable argument to justify your exaggeration OR dispute what I originally said. Try this...take a prozac and re-read the thread. Then get some rest, you're making yourself crazy.
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I see so you pick and choose which one of my responoses you reply to and ignore the rest because you have no idea how to prove your baseless points??
A gross exaggeration of your points by me huh? Lets see:
The only thing you said in this thread is "walmart is making a "healthy" profit" and "walmart is making more then $1/console".
Basically, you didn't say much at all. ofcourse they're making more then $1, and what do you consider a "healthy" profit? You never answered that...$10/console? if they got 10k consoles that would be $100k they made in the 5 mins it took to sell out plus whatever games and accessories they sold. I'd be very surprised if they made over $10/console (if that!), that's all I'm saying. Maybe you should get some facts next time before randomly picking things you obviously know nothing about to argue over.
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Well, you got half of what I said right. And, of course I didn't say how much they are making, I don't know and never claimed to know. The rest of your response seems dedicated to talking to yourself. Seriously, to you often argue with yourself? They have pills for that, you know.
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You obviously lack a few very critical reading comprehension skills...do this, print this thread out and as soon as you get out of HS go back and re-read it just so you can look back and laugh at yourself.
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Dude, some originality in your flames please! ;o)
We're not going to agree, because you're trying to make an argument where none exists. Either get over it, or come up with some new material.
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I personally think that their timing was perfect. Friday is the biggest shoping day of the year and Micrsoft looked at as a potential selling point. A lot of children/teens and even adults have been waiting a very long time for the release and want this for Christmas or whatever. This is what MS wants, $$$. XBox 360 has my vote. OK so the PS3 is going to have some better stats. SO WHAT! Performance will not be any better!
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XBOX 360:
What a waste of money. People who are roped into buying these consoles and games are freaking retarded.
I cannot believe idiots actually lined up to wait for these things.
IT IS A GAMING CONSOLE PEOPLE. IT'S NOT LIKE THEY ARE GIVING AWAY FREE GOLD BARS.
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So you don't do console games.
Too bad.
Consoles will end up leading in market share over PC gaming Big Time by the end of the decade. They're easier to develope for, there are no messy driver and hardware combinations to contend with and as general entertainment centers they give FAR more bang for the buck than any gmaing rig. They're also plug and play in a way that no gaming rig ever could be.
With this new uber powerful hardware platform (more powerful than any gmaing rig), gaming software companies are going to see a way to reduce costs drastically and raise profits accordingly.
It's now commoditized.
The fact that people line up for it is ample proof. No one lines up for a new video card but it's pretty obvious that they do for this. Mass appeal == mass profits.
Now I know all the little fanboiz and l33t crew will flame me massively but it's not about them. It's about profits, a mass market and volume. It's about a mainstream device in people's living room and not upstairs in the room of some pimple-faced geek without a life. No "l33t-ness" can compete with that.
So, you may laugh at the launch and the crowds but they herald a paradigm shift and the beginning of the end of the gaming rig and PC gaming.
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Presumably you are a PC gamer. Nothing against that - I am a PC gamer myself - but you make an interesting point that deserves a reply.
While we all know that a PC offers superior quality graphics and processing power, gaming experience does not depend on these things alone. Many of the world's most addictive games have relatively poor graphics and relatively low processing needs.
If you have young children, you will know that they are very good at screwing up PCs. Consoles are pretty much kid-proof - switch it on, insert a CD and the game starts straight away. Finished playing? Just press the OFF button. Simple. Plus, the fancy screenshots you see on a console game box are EXACTLY what you WILL get on your console. That is often not the case with PC games. Unless you know what graphics chipset, motherboard, CPU speed, sound hardware, memory and so one you've got, buying the latest PC shooter or flight sim can be a bit of a gamble. This is where consoles come in again - by offering a solution that standardizes on platform hardware so people can buy games with confidence, just like buying a DVD. It is plug-and-play in its truest form.
Game developers like consoles because they always know exactly what hardware they have to work with. Thus over time they can exploit that hardware to the full, extracting far more power from it. Conversely, PC hardware changes every day, so for example a graphics chipset comes and goes before the developers every get around to making the most of it. (I know this because I used to work in the graphics hardware market, and I know that a graphics card has about 2 weeks to make a killing before a competitor takes it out.) That surely represents a bum deal for PC owners. It's like buying a Ferrari but only ever using half its power.
I don't actually care whether my Xbox or Nintendo has the up to the minute awesome power of my PCs. My consoles do exactly what I ask of them, and my PCs do too. For me gaming is an entertainment commodity, like DVD and CDs. Yes, I do know plenty about what's inside my PCs, and I've tweaked my hardware to get Flight Sim, Unreal and Quake working optimally, but most people are not server mechanics and they don't really WANT to learn about it. People want to play games. They should not have to be a PC hardware geek to get a game happening. That also cuts down on product support and returns, which makes for happier customers and better profits.
One final thought on this: Gaming has been around on PCs for many years, but like it or not it was the consoles that made the game industry far bigger than the movie industry. It is the console market that has moved games from the geeky bedroom desk to the living room and from solo passtime to family entertainment. (Yes I know people have been PC gaming online for a decade or more, but not on the scale we are starting to see with services like Xbox Live.)
My dear old grandma could buy me a console game if she wanted, but could never have figured out which godammed game might work on my PC. That is the triumph of accessibility, simplicity and pure function, which in my opinion is what consoles are all about.
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Now THAT is classic flamebait. ;o)
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this isnt anythign compared what sony is going to loose whith the PS3.
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Yeah, especially since they already "loose"d customers over the whole DRM rootkit thing.
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Sony's done.
Their PR nightmare, MS' timing and getting there first has cost them the game.
Goodbye and thanks for coming out.
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If you're going to subtly criticize him for his spelling typo, please take into account that your own statement should have read "they already lost* customers", and therefore makes you look like a bigger fool.
Please, if we're going to point out the flaws in posts, let's at least make sure our response is appropriate to the point being made and the article, and not petty grammatical semantics.
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I realized that when I posted, just no easy way to make that comment subtly unless I dedicated a separate sentence about it (which wouldn't be subtle)...for the record, though I disagree about the 'fool' part. My main point was about the sony DRM anyway, not the 'lose' vs. 'loose' spelling.
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Point noted! :)
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wow imagine if The x-box 360 turned out to be a total bomb man that would take a big chunk out of microsoft. well they will be able to make alot of money now. until the other 2 consoles come out.
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At this point it would take a miracle for it to bomb.
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Um.. 2 words. Sega Dreamcast.
... :)
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MS ain't Sega.
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Yea and Sega is as big an empire as MS is...:/
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Did he say it was?
Actually, comparing MS to Sega is a poor comparison any way you look at it, I'll agree there.
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Yea. All I know is when you make millions of these units they arn't paying anywhere even close to 399.00 to make these bad boys, so money's being made.
They'll make a ton on their LIVE feature and other future plans w/ the console.
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Microsoft isn't paying for these units, you newb, they are the manufacturer. its the COST of BUILDING them. The motherboard, components, CPU, video card, its a simplified PC.
There are costs associated with building it. And it COSTS MS almost 600 dollars to BUILD each one. And they sell them at a suggested price of 400 and 300 dollars depending on model.
Just because your limited understanding prevents you from understand the business model, doesn't mean MS isn't losing money..
First off, they aren't losing money, everything has been paid for, they are not Profiting from the units, but they will make it up in license fees and accessorites...
The money isn't coming from the hardware. It will come from all those vendors that will make the games for it...
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"Microsoft isn't paying for these units, you newb, they are the manufacturer."
Sure they aren't.
And I'm the czar of all the Russias.
Um, if you knew anything about large scale distribution projects like this, o "newb", you'd know that a job like this gets contracted out. There is no factory out there with the name "Microsoft" emblazoned on the side of it.
So yes, they pay for it.
*sigh*
Kidz today - ya even gotta connect the dots for 'em...
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Very true... which only strengthens the argument that Microsoft is taking a bigger loss on these systems than some of these posters are accepting.
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The whole point is not to make money on the device. It's to get the device out there and clean up on content, specifically online game monthly fees, games in general and other aspects of the entertainment experience that can be charged for.
Damned good business idea.
As an example from the PC world, if companies like Blizzard had half a brain, they'd GIVE AWAY the game client and charge for the monthly fee online only. Take a page from the tobacco companies and get 'em hooked then feed off of 'em until they drop. :)
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... except that Blizzard doesn't have a game console. I see what you are saying if Blizzard gave away the game, they may get more gamers, but its the most popular game on the net.
They have over 2.5 milliong people playing it, so do the math, if they DIDN'T sell at 50 bucks times 2.5 million customers that's money the wouldn't have made from the SALE of their software... And they still make money in addition with monthly fees...
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That's why I said "an example from the PC world". An analogy in the console world would be an absurdly cheap consoles given what it did besides just play games.
Oh wait, there is one.
It's called XBox360. :)
50 bucks times 2.5 million is a piss drop in the bucket and indicative of nothing but just plain unreasoning and shortsighted greed.
Here's some REAL math for you.
Take 2.5 million.
Multiply by $20.
Multiply by 12.
That's just the first year.
They can afford to give the game away.
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That's to be expected...SNES was the last game system that costs less to produce than its introductory price of $199.99 USD. I can't even hardley get an AMD or Intel DUAL CORE processor for less than $500, so a triple-core had to cost at least $400.
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Hello, McFly, They told you the prices in the article. Did you even read it? The triple core CPU cost $106, with the GPU costing an additional $141.
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Those values are 'guesstimated' "...according to analyst firm iSuppli." I'm saying if we were to see this processor on pricewatch.com, say, then it'd be around $400 to $500 at least. Most of the premium there is with manufacturing, advertising, quality control, etc., and the $500 would more accurately reflect all of those things. Think McFly, think! :)
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As opposed to PC CPUs, these are custom built CPUs for very specific tasks. Also they are bought in bulk which also lowers the price considerably.
The guesstimate for 116 for the cpus seems very very likely.
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An Athlon64 4400+ Dual Core is $600.
Endgame.
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Seems like IBM screwed microsoft sony and revolution with their expensive cpu. I wounder if Sony or Microsoft evens knew that IBM was also making a processor for their rival. Imagine IBM's face at E3.. lol "um um it wasn't me"
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BTW--a couple or 3 weeks ago I bought that EXACT processor for about $489 online. A week later, I saw an ad for the cpu that if you buy it for $600, you get Nero Ultra Edition 7 FREE ($100 value). Coincidence?
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Not sure but I forgot to mention that the price was in CDN$. The US$ is currently $1.15 CDN.
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they forgot those magic 4 letters after the prices.. MSRP for the CPU is $106 and $141 for the GPU... the CPU and GPU are more than likely $15-20 each.. they stamp these out in the thousands by the hour..
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You forget a very important point. With PC CPU's, they are graded by how fast they run. i.e. On a single wafer of 200 die's, some may run at 4.0Ghz, some at 3.4Ghz, they all get graded and sold accordingly.
In a console, the CPU speed is a fixed requirement, i.e. CPU will run at x Ghz, anything that does not meet this cannot be re-graded and sold as a cheaper processor, it's binned.
This makes console CPU yeilds much lower than Desktop PC CPU yields, and therefore bumps the price considerably, until the CPU manufacturing process matures sufficiently (this can take upto 2 years).
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Dude you are a total moron. Hardware companies make very little profit. The markup on hardware isn't even CLOSE to that. IF the MSRP is $106 for a cpu, I guarantee they are buying it for no less than $100. The computer world is very very tight. There is NO profit in computer hardware, unless you are a huge company churning out machines, and making 5 bucks on each unit. A small time vendor may sell 50 or 100 units a month, to them that may be good money. 250 or 500 dollars profit.. But a company like Gateway can do the same thing but they sell 1000 units a month or 10,000.
Thats where the money comes in. Vendors go out of business every single day and new ones sprout up, that's how cut throat it is. They may stamp these things out by the hour, but there are a lot of people between the makers of a product, and where the actual distribution and manufacturing is...
Everyone in between makes there percentage, and that's where the price goes up.
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You are assuming that MS buys these things, and then manufacturers based on current pricing. The bought the hardware for these units Months ago.. probably bought enough for say a million units.
Whatever that price was, that gets figured into the COST of the unit to manufacture.
And its not guesstimated, you can look on the Microsoft site, and see EXACTLY what they paid, for each unit to manufacture them.
Its there in black and white...
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That's patently false. It's a myth that all consoles are sold at a loss. Nintendo has never sold a console at a loss, and not surprisingly, they continue to turn a decent profit despite a dwindling market share. Neither Sega or Sony sells/sold them at a loss either. The only console that has pretty much universally been agreed upon to have sold at a loss was the first XBox. And that's basically because MS has the liquid assets to be able to absorb huge losses just to get a foot in the door. Not too difficult to believe when you looked at the 100's of millions of dollars MS' entertaiment division has been losing every year since the release of the XBox. With not much first party software to balance the hardware loss, the red ink really builds up.
Is MS losing money on the XBox 360? Most likely. $125 a unit? No chance. I would be suprised if it was over $50.
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thefree360.com im waiting on mine. I already got a free video ipod from the company so I know its legit.
forgot to add it is one of those sites where you have to do offers and refer peeps. I did the lasertron offer since It was only 10 (i had already don't all the other offers with other companies so I had to do lasertron). then I just paid my firends 20 each so it works out nicely :)
NOW IF THESE XBOXS WERE AVAILABLE ID BE HAPPIER
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Yeah, the price was around $600 USD here too...ahh! Nero deal has gone away, and magically the price is reduced to $485 on pricewatch.com!
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So, if you figured THAT out, how come you couldn't go the rest of the way and figure out that they paid someone to build the units for them too?
Thereby incurring a cost?
Huh huh huh?
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Mmmmmmmm...spicy spam!
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this is hilarious...
no really...
everytime there is a MS issue (whether is xbox/xp or whatever product) there are some weird stupid posts...
after 20 minutes of reading all these posts, only a few have debate meaning...
others? pure stupidity...
i just wonder if betanews will ever decide to create a forum instead of this.. coz this is funny as hell... no really....
some people dont read posts.. others forgot their brain cells in their bed... others have acutally common sense in posting some info/debates...
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Where else can ya find such great entertainment at such a cheap price.
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Xbox 360 at ...18000$!
http://cgi.ebay.com/NEW-...054QQrdZ1QQcmdZViewItem
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