It appears that even though sales of the new Microsoft Xbox 360 are through the roof Microsoft may still be losing money. The premium edition Xbox retails for 399.99 but cost 525 to produce.

This loss may have been avoided if Microsoft had raised the initial release price of the Xbox because they were selling on EBay between 690.00 and 1800.00.


This loss may be being taken up by more than just Microsoft; some of the hardware manufacturers may also be taking a hit. The most expensive part of the Xbox is the chips inside for a total of around $340.

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They took a loss at the beginning of the XBox as well; this tends to be a standard of sorts; they usually make back their money and then some through licensing and homebrewed games...

One big part of this is that they wanted to blow sony away, by sony waiting to hear final spec's of a finished product they can bump up features...

I was going to say that too. Though it is unusual for a console to loose money from the initial release. X-box took a loss right from the start last time. The prices on all consoles PS2, Game Cube, X-box are now all taking loss on the console, but what they make in accersories and games creates profit. The console is the loss leader.

Usally a console comes out at break even prices and lowers to loss sales. But the sale of games has sored by them. Microsoft seems to have re-writen this model. However you can bet if they do get major market penitration they will be able to release at a profit.