Xbox 360 news just gets worse by the day.

iSupply.com have done a breakdown on the Xbox components, now that the machines are actually available. The news is much worse than Microsoft would like us to believe.

The materials inside the XBox360 cost Microsoft $564 before assembly. Semiconductors alone account for $340. The IBM-designed chip at the center of the console costs about $106. The Seagate hard drive costs $53, and the Samsung memory chips $65. The console sells at retail for $399, meaning a loss of $165 per unit just in parts. ie. it doesn't include labour costs. And that's just the tip of the iceberg. There's more than just the console in the box - the power supply, cables, and controllers add another $55, pushing the loss per unit to $220. And these prices include the assumption that Microsoft are getting discounted prices on their components. Now take into account the actual cost of assembly, labour, the case manufacturing, switchgear, smaller items (like screws to hold it all together) and packaging and distribution and you can safely guess that adds another $50 to the unit. That gives a rough guesstimate of $270 loss per unit.
I'll make that bigger because it's an impressive number:

$270 LOSS per unit


As with the Xbox, they'd like us to believe that they'll recover the cost on the games. But the maths doesn't add up there either. They assume people will buy 10 games at $60 a pop, but that simply won't happen. The only reason the original Xbox sold anything like the numbers it did was because of the hard drive and the fact that you could hack the machine to easily play pirated games. Most people own pre-owned games where there's no money to Microsoft anyway so they'll only get a profit on it the first time it's sold.

On top of all of this, Microsoft have made the Xbox360 so much like a PC and so far removed from a games console that the internet is already flooded with reports of crashes, buggy behaviour, running hot, random reboots, and get this - the black screen of death. Nearly 15% of XBox 360s are defective by early estimates.
[source][source].
They've missed the point - it's supposed to be a games machine. Turn it on, pop in a game, play. People don't want buggy Microsoft shit in their games console. Most of us have to put up with it 10 hours a day on our PCs.

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