Feeds

Xbox 360 costs third more to make than it sells for

And that's just the price of the parts

Secure remote control for conventional and virtual desktops

It's widely believed that games console makers sell their hardware at a loss in order to get the retail price down to a level they believe consumers will be willing to pay, but any doubters must surely be convinced by market watcher iSuppli's attempt to strip down the Xbox 360 to find out how much its components cost.

According to the company's report, the top-of-the-range, hard drive-equipped Xbox 360 costs Microsoft at least $525 in parts alone. That's already $126 more than the retail price before the cost of assembly, packaging, distribution and marketing are added to the box-cost, and the retailers' cut is deducted from the price tag.

The big winners are IBM and ATI, whose products together account for 47.1 per cent of the Xbox 360's bill of materials (BOM), iSuppli estimates. IBM is supplying the console's 3.2GHz three-core PowerPC processor, which iSuppli claims costs Microsoft $106 a pop - 20.2 per cent of the cost of the console's complement of components. ATI's share is higher - 26.9 per cent - which it gains from its $141 R500 GPU, though it has to pay NEC some of that for the embedded DRAM it uses.

The next largest cost is the 512MB of Samsung DDR SDRAM ($65, or 12.4 per cent of the BOM), followed by the 20GB hard disk (10.4 per cent). You can see the full breakdown here.

iSuppli estimates that rising yields of the various chips used in the Xbox 360 will drive down costs going forward. But even if they don't, Microsoft almost certainly doesn't expect to make money on the console, passing lower costs on to the consumer by reducing the price of the console. Instead, it will be looking to recoup its hardware losses through software licensing royalties and the sale of its own Xbox 360 games. ®

Beginner's guide to SSL certificates

More from The Register

next story
Xperia Z3: Crikey, Sony – ANOTHER flagship phondleslab?
The Fourth Amendment... and it IS better
Don't wait for that big iPad, order a NEXUS 9 instead, industry little bird says
Google said to debut next big slab, Android L ahead of Apple event
Microsoft to enter the STRUGGLE of the HUMAN WRIST
It's not just a thumb war, it's total digit war
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Netscape Navigator - the browser that started it all - turns 20
It was 20 years ago today, Marc Andreeesen taught the band to play
A drone of one's own: Reg buyers' guide for UAV fanciers
Hardware: Check. Software: Huh? Licence: Licence...?
The Apple launch AS IT HAPPENED: Totally SERIOUS coverage, not for haters
Fandroids, Windows Phone fringe-oids – you wouldn't understand
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.