charlequin
Banned
Probably a little less than 360. And that came in at 525$ on day 1.
It's going to cost a hell of a lot less than that. Pretty much the entire point of this discussion is how important it's going to be to keep the future systems relatively close in cost to their sale price and be able to price drop them quickly.
That's where an important source of money is. If they can sell 100$ of apps to each console owner in the life span of the console they have their 35$ back.
Well, a) you can't, really, and b) this is still an entirely wrong way to think about the cost of manufacture on a newly-launching console.
Pretty sure E&D division has been profitable for the past few years, or maybe it was just Xbox. Those losses are in the past, sunk costs incurred to get into the business. Nobody is counting that against them any more.
That's not entirely right. Costs on the OG Xbox are indeed entirely sunk and irrelevant at this point, yes. Costs on the 360, however, are still quite relevant. Game consoles operate on a generational cycle where companies take on massive losses at the start in terms of R&D, manufacturing costs, loss on hardware, and other upfront costs which are then (if they're successful) counteracted by profits at the high-yield tail years of the gen. Proper accounting for the business is going to (at least in part) consider each generation as a whole and determine the return-on-investment that the late-gen profits produce on those upfront costs.
In the case of the 360, they'll probably wind up being very slightly net positive for the 360 project as a whole, but not producing a profit at the level Microsoft really needs its divisions to produce going forward. The per-year profitability of the department these last few years (in the console's naturally profitable endgame years) won't really matter for their status next gen unless they can continue to lower costs and increase revenues for the next console cycle as a whole.
And only fanboys/us do the accounting that way. In the real world the losses have been written off and it makes a profit
Long-term investments always have to be accounted for as a whole when judging their value and rate of return.
It's true that on a quarterly basis, past losses are sunk costs, but all that means is that Microsoft isn't going to shut down the Xbox division while it's still making a quarterly profit. The actual success of the 360 as a system is still rightfully judged in a manner amortizing over its whole lifespan.
You need to factor in R&D.
Err, no I don't. I'm not talking about R&D, and it's entirely irrelevant to this discussion. R&D is a fixed cost and the entire issue of packing in an extra peripheral has to do with how it increases marginal cost.