iSuppli: Xbox 360 Costs Continue Decline

[Zoglog]

roduction costs of the Xbox 360 Elite have dropped to $323.30 per unit based on the latest estimates by research firm iSuppli.

ImageThe lowered production costs are good news for Microsoft, while Sony’s production costs remain far higher than the PS3’s retail price.

The following is based on iSuppli figures compiled and published by DigiTimes.

PS3 motherboard, CPU, graphics processor and chipset costs total $352 compared to $204 for Xbox 360.

The PS3 optical disc drive/player costs Sony $125 compared to just $19.45 for Xbox 360.

The power supply and hard disc drive for the PS3 are each $10 more expensive than Xbox 360 costs. PS3 Bluetooth functionality and network modules account for $20 per unit, costs not relevant to Xbox 360.

The research also cites further PS3 costs of $150 per unit for extra components not required for Xbox 360, $35 greater chassis related costs, and PS3 assembly costs of $40 per unit compared to just $6 per Xbox 360.

The total cost of producing a 60GB PS3 therefore stands at $840.35 compared to $323.20 for an Xbox 360 Elite. The 60GB PS3 retails at $599 while the Xbox 360 Elite can be purchased for $479.

http://www.next-gen.biz/index.php?option=com_content&task=view&id=5502&Itemid=2

cost breakdown chart here

http://www.digitimes.com/systems/a20070507PD200.html

Elite = $$$ :D

[Apossum]

I'd like to know the profit margin on the $180 hdd and the $100 wi-fi adapter

[mykevermin]

There's an interesting omission in the article you're quoting; others have popped up, covering the same data, but also mention that the number and reliability of Blu-Ray diodes is increasing significantly. Better yields = cheaper manufacturing costs; the speculation is that it may reduce the per-system cost of making the PS3 roughly $100.

Personally, if the BR drive is $125 versus under $20 for the 360's DVD, I don't forsee such a drop in cost for the PS3. After all, that would imply that the cost of the Blu-Ray drive would only be a few dollars more than the 360's DVD drive (if we assume that the cost savings due to BR diode yields will be solely located in the cost of the drive, which is pretty reasonable to think, IMO).

The cost of the HDD for Microsoft infuriates me, given the $180 sticker price of it separate from the Elite system. No way in hell I'll buy one now, knowing it has a likely profit of $100+ built into it. Fuck 'em for that price.

[botticus]

So... no where does the 360 have a component that is not required by the PS3?

[ananag112]

I wonder how much the Wii makes...

I hear the figure is anywhere between $75-$170

[Chacrana]

I'd like to know the profit margin on the $180 hdd and the $100 wi-fi adapter

Heh, beat me to it. As it turns out, MS is selling those at cost.

[Zoglog]

I wonder how much the Wii makes...

I hear the figure is anywhere between $75-$170

at launch it was around $40

[Wolfpup]

Long term the PS3 will probably end up cheaper to produce than the 360...if Sony can continue absorbing the costs.

Heh, beat me to it. As it turns out, MS is selling those at cost.

You're joking, right? If those are going at cost, Microsoft needs to fire their guy who negotiates component prices. I could do a better job for crying out loud!

[dallow]

and PS3 assembly costs of $40 per unit compared to just $6 per Xbox 360.

No wonder 360s have a high fail rate. ;)

[jer7583]

Makes it even more inexcusable that the Elite recieved a price increase. They could have easily made that the new $400 unit, and dropped the premium.

[Wolfpup]

No wonder 360s have a high fail rate. ;)

I wouldn't even bother with the winky face. If those numbers are actually true, there's something really messed up about that. It could also be because at least some PS3s are built in Japan by people who actually get payed money for their work :D

Makes it even more inexcusable that the Elite recieved a price increase. They could have easily made that the new $400 unit, and dropped the premium.

Yeah, that's the obvious thing to do. I think the early rumors made sense that said Microsoft was going to introduce it at $480, then drop it down to $400 in a few months...but they've flat out claimed they're not doing that.

Doing that would have let them milk early adopters more, while possibly making people who JUST bought the $400 model feel better...and then by changing the color to white, the people who bought the $480 one could feel like they got something for it (even if it is just a different color...one that I think looks worse...)

They probably need to drop the Elite to $400, drop the Premium to $300-330ish (and possibly can a few accessories if need be), and either drop the "Core" to $200-250ish, or just drop it entirely.

This is totally nuts that this is the first generation where the consoles have gone UP in price after launch.

[Apossum]

Makes it even more inexcusable that the Elite recieved a price increase. They could have easily made that the new $400 unit, and dropped the premium.


well, as soon as MS gets leeway, they like to start screwing their customer base. this has been known since the beginning of teh internet.

people forgot this when the 360 came out though and now a lot of people's fears about MS charging whatever they want when they get popular are coming true. the accessory prices for the 360 have been pretty outrageous.

$180. $180. 180 fucking dollars for an hdd. just say it to yourself a few times.

[Zoglog]

$180. 180 fucking dollars for an hdd. just say it to yourself a few times.

On the flip side the expanded HD isn't really necessary. The HD price gouging was to be expected

[jer7583]

yeah, I do have to say in MS's credit that at least their raping prices are mostly optional items. You CAN play everything (except XBLA type titles) on the Core, so if you just wanted to play Oblivion and Dead Rising, or some other single player games, and don't have online, $300 is the entry price for 360, half of what PS3 costs, and pretty close to Wii.

Me, I'm happy with my $400 unit and I see no reason to ever get an elite, I'm just saying MS is really stretching things with the Elite Pricing. The real sad thing is last week I saw people lined up, trading in their old systems for Elites at a few gamestops, while I was getting b2g1 games. It's so sad that people will just bend over for this stuff.

We're a grand economic experiment this generation, and guess what, we're sending a clear message that we're willing to pay more, it's really too bad.

[mykevermin]

Long term the PS3 will probably end up cheaper to produce than the 360.

Where do you see that? Now, more of the components have a "longer drop" than the 360 does (compare the difference b/w the disc drives in both of them, for instance), but seeing as how the manufacturing costs are over 2X greater for the PS3 at the moment, of course it has a longer way to go down. I still don't see how you can see it getting cheaper for the PS3 than 360. That's just silly-talk.

[Apossum]

yeah, I do have to say in MS's credit that at least their raping prices are mostly optional items. You CAN play everything (except XBLA type titles) on the Core, so if you just wanted to play Oblivion and Dead Rising, or some other single player games, and don't have online, $300 is the entry price for 360, half of what PS3 costs, and pretty close to Wii.

Me, I'm happy with my $400 unit and I see no reason to ever get an elite, I'm just saying MS is really stretching things with the Elite Pricing. The real sad thing is last week I saw people lined up, trading in their old systems for Elites at a few gamestops, while I was getting b2g1 games. It's so sad that people will just bend over for this stuff.

We're a grand economic experiment this generation, and guess what, we're sending a clear message that we're willing to pay more, it's really too bad.



yes, the system is cheap in price and it's arguably cheap in quality as well. the 3 red lights are this gen's DRE (or blue screen of death)

optional or not, the prices are ridiculous. (and the $100 wi-fi adapter isn't optional for everybody.)

[PyroGamer]

If this is anywhere near the truth why in the fuck did they release a fucking Elite at a price-hike?


MS could easily win this whole thing with a price-drop right now. If they don't cut the price SIGNIFICANTLY in conjunction with Halo 3 or Holiday '07, they are fucking insane.

PS3 assembly costs of $40 per unit compared to just $6 per Xbox 360.Welcome to the wide wide world of Chinese worker exploitation. Communist state my fucking ass.

[terribledeli]

MS could easily win this whole thing with a price-drop right now. If they don't cut the price SIGNIFICANTLY in conjunction with Halo 3 or Holiday '07, they are fucking insane.



You're completely right. Still selling a product at the maximum price the market will tolerate to make the maximum amount of profit is "fucking insane". Microsoft is completely nuts. Why would they want to turn a profit? Didn't get the memo? They created the Xbox 360 to bring peace and joy, not money.

Microsoft won't drop horseshit till the market says "Nah, not worth the price tag." I doubt it'll be the holiday season.

[PyroGamer]

You're completely right.
Thanks, I agree.

[Apossum]

If this is anywhere near the truth why in the fuck did they release a fucking Elite at a price-hike?


MS could easily win this whole thing with a price-drop right now. If they don't cut the price SIGNIFICANTLY in conjunction with Halo 3 or Holiday '07, they are fucking insane.




that's the problem with game forum analysts. they think economics are akin to a basketball game...

[Zoglog]

No wonder 360s have a high fail rate. ;)

you're actually probably correct on that front. Not necessarily the fact that it costs less, but because the PS3 has a much more advanced design, therefore it costs more to construct. Just look at the internals for each system. the 360 insides resemble much of a shrunken down PC. The PS3 Hardware is quite neat and complex.

It's a pity that the 360 breaks down so easily =(.

[GizmoGC]

optional or not, the prices are ridiculous. (and the $100 wi-fi adapter isn't optional for everybody.)

You don't have to buy the $100 Official MS one. There are plenty of other wireless options for $30+.

[dafoomie]

Where do you see that? Now, more of the components have a "longer drop" than the 360 does (compare the difference b/w the disc drives in both of them, for instance), but seeing as how the manufacturing costs are over 2X greater for the PS3 at the moment, of course it has a longer way to go down. I still don't see how you can see it getting cheaper for the PS3 than 360. That's just silly-talk.
The 360 was designed with the #1 priority of getting the cost to manufacture down over time, PS3 was not. MS was getting murdered by their inability to reduce costs on the original Xbox while Sony brought PS2 costs way down.

[jer7583]

I am still stunned that the elite is making them around $150 profit, of which retailers I'm sure are seeing around $5. The game industry is so messed up sometimes.

A $400 elite is completely feasible and cost-effective for MS. The extra $80 is just because they believe it will help public perception of the unit as top of the line and competing with the PS3.

[TimPV3]

I don't understand how it costs Sony $10 more for a 60GB hard drive than MS for a 120GB hard drive, considering Sony's is barebones while MS's comes in a special shell to connect to the 360.

[dallow]

You don't have to buy the $100 Official MS one. There are plenty of other wireless options for $30+.

Oh no you don't.
You said people had to buy the expensive Sony or Monster HDMI cable because they don't know how to look around.

The average consumer is going to see MS Brand Wireless Adapter, that's what I HAVE to get.

Sorry to bring this all up again. Haha.

[dallow]

I don't understand how it costs Sony $10 more for a 60GB hard drive than MS for a 120GB hard drive, considering Sony's is barebones while MS's comes in a special shell to connect to the 360.
I thought that too, then I questioned the validity of these numbers.

[TimPV3]

According to Kotaku, this isn't correct. The data reflects the 20GB model, and not the Elite.

[Kaijufan]

I find this somewhat hard to believe since Microsoft's entertainment division lost more then $300 million from January to March this year. While I'm pretty sure the Entertainment division does include things besides the Xbox like the Zune, I would think that the division would have done better if they were making a profit on each Xbox.

[Morpheus]

^There's more to the cost than just the material cost. Like human resources, marketing, taxes, R&D, overhead, etc.

[Zoglog]

I thought that too, then I questioned the validity of these numbers.

not everyone can get parts at the same costs. But who knows....

[dallow]

not everyone can get parts at the same costs. But who knows....

I know, but 120GB for less than a 20GB?
That didn't make sense.

Though now I see it's not for the Elite.

[MadFlava]

No wonder 360s have a high fail rate. ;)

Are there any figures if the 360 has a higher fail rate than the other systems. I can't imagine that it is any different than the first Xbox or the PS2 in their first two years.

[Redeema]

The article was wrong, go back and look at it, they've updated it. The info is from last November before the Elite came out. Stop the discussion, it's moot at this point.

[Apossum]

Are there any figures if the 360 has a higher fail rate than the other systems. I can't imagine that it is any different than the first Xbox or the PS2 in their first two years.


lets see...the May update just came out, so I imagine the fail rate just quadrupled. Survival of the fittest, your 360 needs to adapt or die when the evil dashboard update comes to eat it.