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Microsoft making tiny profit on Xbox One hardware sales

Written by Andre Yoskowitz (Google+) @ 26 Nov 2013 22:04 User comments (4)

Microsoft making tiny profit on Xbox One hardware sales According to research firm IHS, Microsoft, just like its rival Sony and its Playstation 4, is making a very tiny profit on each unit sold of the new Xbox One.
The Xbox One, which costs $499 to consumers, costs $471 to build, not including R&D and advertising costs which could certainly add up to $20 or more per unit.

Sony, which sells its PS4 for $399, spends $381 to build the console.

Microsoft's added costs come mainly via the Kinect motion control sensor, which costs $75 and the AMD CPU/GPU at $110.

Both console makers lost significant money for their PS3 and Xbox 360 consoles, respectively, with Sony losing as much as $300 per unit for over a year. While they may not be making more than a few pennies this time around, the figures certainly seem better than a loss.

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4 user comments

127.11.2013 8:41

This would only be true if the manufacturers were getting 100% of the list price paid by consumers. I gotta assume they sell to a Best Buy or any other merchant for much less so they can get their cut of the sale. That said I bet they are both selling at a loss.


Just my $0.02,

dEwMe

227.11.2013 16:19

that isnt good :o but its early days as well since its a new generation of consoles

327.11.2013 16:39

Either way, this is actually close to break-even than usual for a console at launch. Remember, the actual hardware is a loss-leader for SOFTWARE (and peripheral) sales.

429.11.2013 6:53

They should have used the $75 that kinect cost, on the GPU/CPU instead. More 1080p/60fps

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