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David Carey

Member since: Apr 2nd, 2006

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Joystiq1 Comment

So how much does Microsoft lose per 360 sold?

Apr 2nd 2006 11:39PM (Joystiq)
Hi folks;

Just wanted to chime in on this thread as the author of our analysis, columnist in EETimes, and Chief Wrench of the company behind the $310 number.

Our analysis is an estimate of the constituent component costs [cost of goods sold / COGS] of the core xbox360 - there are other costs on top of this related to development of the the console and its marketing, distribution, etc. Nothing more or less complicated than that.

I think the article in EETimes speaks to the details; It's a money loser at some level but considering accesories (see our teardowns of the wireless controller and wireless adapter in the articles prior to the console teardown) they don't seem to be in too deep. The exact number of any profit/loss depends on many factors and we're trying to cover what we understand best - cost of good sold. I'll leave it to others to estimate ancilliary business costs that flesh out the entire picture. In other words, your actual mileage may vary.

As to whether we're full of sh*t as poster #32 suggested, I'll stand by our 10 year history of COGS estimation, which as poster #36 points out gets regularly vetted by the engineering community we serve. I can promise any estimate we arrive at isn't perfect but I'd welcome any detailed fact-based view to show where it is wildly off. Keep in mind that the specifics behind our $310 figure are based on very detailed research that we deliver to clients; something not covered in the EETimes column

Thanks for listenting; more comments welcome. I see some very informed views posted throughout the thread.

David Carey, President Portelligent Inc. (www.teardown.com)


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