Making money on the products you’re offering is usually considered a given, but when it comes to the video game market things are a bit different. There it’s the games that is suppose to bring in the money while the consoles are sold at a loss, to begin with. The same goes for Xbox 360 and especially PlayStation 3, which is extraordinary expensive to make. When we last reported about PS3 and its manufacturing costs it turned out that Sony loses up to 306 USD per sold console. This information came from analyst company iSuppli and the same company had earlier reported that Microsoft was losing 126 USD per sold Xbox 360 console. iSuppli now claims that these figures were incorrect and that Microsoft is actually making money on its console.
According to iSuppli’s newest survey of Xbox 360 the manufacturing cost of the video game console with a 20GB harddrive, the Premium model, is at 323 USD while the store price is 399 USD. In other words an earning of 76 USD. The difference is staggering when compared to Sony’s current situation and it would mean that Microsoft has been able to lower the manufacturing costs with nearly 40% since the console was launched.
“A year ago the total bill of materials (BOM) cost for the Xbox 360 Premium, including hard disk, the DVD drive, enclosures, the Radio Frequency (RF) receiver board, power supply, wireless controller, cables, literature, and packaging, reached $525, well above the retail price of $399, according to iSuppli. Considering the up to date BOM, Microsoft has managed to reduce the pricing of its console by over 38.5%.”
Whether Microsoft can make us consumers happy with a price cut remains to be seen, but it’s pretty clear that Sony has little to counter with if a price war would break out.
