Posted by Aaron J. Bossig on 01/19/07 00:31

getrich@1upandup.com wrote in
news:1169165483.934864.286800@v45g2000cwv.googlegroups.com:

>> Rich, that's based on retail. Microsoft doesn't make money off the
>> retail price, their money is made off of the price at which they sell
>> it to the retailer or the wholesale price. It's possible they are
>> close to breaking even on the console with games putting them in the
>> profit column.
>>
> According to this article Microsoft is making a profit per each sale,
> as the cost to make it is less than what it retails for. Of course,
> Microsoft sells it for less than the retail price. Point now is,
> according to the article, Microsoft is not losing money per console on
> manufacturing costs. The profits are made in the razor blades, not
> the razors.

Retailers don't make much profit on video game hardware, so the sticker
price you see for any given console is probably going directly back to
the manufacturer. Like anyone else, they make their money on the games
and accessories.

So, comparing the retail price to what MS claims is the production cost
is, actually, a very fair analysis. The only other factor is the shipping
cost from the factory to the retailer.


--

Aaron J. Bossig

http://www.GodsLabRat.com
http://www.dvdverdict.com

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