Wiitard said:A lot more then $40 on premium? Counting money they spend to honor the warranties? Don't think so.
Losing $100 buck right now if the sold Core at 199 is optimistic, even considering profits from memory card.
You mentioned high attach rate. You realize, of course, that people who buy premium at $400 might have a slightly different attach rate that people who would buy a core at 199.
Finally, Core at 199 will pretty much mean entering into price war with Nintendo. I see exactly zero evidence right now that MS is anxious for this fight - competing against a 179 Wii without Wii sports with Nintendo ramping up the production and dropping the price.
Now comes the 65mm. Are you saying in will reduce the cost of procucing the core by over $100? Do you have a source for that? How much does the stuff excluding the processors cost: you know RAM, drive, power unit, motherboard?
PS2 dropped $100 in 18 months, why can't the 360 do the same? What's in the 360 that would make it more expensive than the PS2 at relative time periods? Remember technology has been getting cheaper over time. A PC is much cheaper now than in 2001/2002. The 360 is also selling more software and has more expensive accessories to help the bottom line. Honestly, I think there's at least a 75% chance MS will drop the core to $200 this year (and the premium to $300).