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post #11 of 43
Quote:
Originally Posted by DigitrevX
explain how that works when a 360 is only 400bucks..
and not all 400bucks go into the rendering hardware..
My oven-stove cost at least twice my BBQ grill... yet I can't cook a decent steak using my oven

Same general category of items, different functions. In one hand you got the 360, a rig (if you want to call it that) designed to mainly play games, with everything streamlined to yield max performance in gameplaying experience.. and in the other hand you have a PC, which has a wide-range of functions.

Actually, we don't even have to go that far for a comparison, just compare a professional graphic card, and a gamer graphic card. Prof-gfx-card, powerful? Yes, and pricy.. would you be able to get amazing game performance? Probably no.

Plus, most console units are sold below their manufacturing cost, or at least really close to it. Most of the profit comes from games.
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post #12 of 43
Its been said many times u just can't compare a gaming console to a computer.Mainly because games for consoles are specificly optimized for that console.Unlike computers which can have very different hardware and software differences.
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post #13 of 43
Quote:
Originally Posted by diveAddict
My oven-stove cost at least twice my BBQ grill... yet I can't cook a decent steak using my oven

Same general category of items, different functions. In one hand you got the 360, a rig (if you want to call it that) designed to mainly play games, with everything streamlined to yield max performance in gameplaying experience.. and in the other hand you have a PC, which has a wide-range of functions.

Actually, we don't even have to go that far for a comparison, just compare a professional graphic card, and a gamer graphic card. Prof-gfx-card, powerful? Yes, and pricy.. would you be able to get amazing game performance? Probably no.

From your theory. It would be the software that determines the hardware price and performance. I don't believe that.

Are xbox games optimized for that hardware yes will it shave off some of the price. maybe. but thousands of dollars off, absolutely not..

If your theory was correct the only way for a PC to be on equal levels with a 360 is to make games optimized for curtain types of pc. And if that was correct it proves your reasoning wrong because the 360 is in fact weaker than the best PC gpus on the market and the only reason it apears to be stronger is because the games are optimized for it.

Quote:
Originally Posted by diveAddict
Plus, most console units are sold below their manufacturing cost, or at least really close to it. Most of the profit comes from games.
Where do you get this info? Unless you got access the microsofts xbox manufacturing records how do you know for sure what kind of profits they make on each unit? I can bet you they are not taking a hit. This is Microsoft we are talking about.
post #14 of 43
also because when they make a game console, they are making the same thing over and over and over again. Which means massive bulk ordering. Im pretty sure there is a price difference between ordering a single cpu and ordering millions of them. Same goes for all the other components in the system.

And yes they lost quite a bit of money on making the console. Almost all their revenue comes from games and accessories.

Thats actually the reason why sega went kaput. Because they were at such a loss with their dreamcast, that it wasn't economically feasible to stay in the hardware business. Its a lot cheaper and profitable to make the software.

Oh and Digitrevx its a pretty well know fact that they sell the consoles at a loss. You don't have to have access to any companys manufacturing records, just look around and you will see it. Microsoft is taking a big loss on every single one of the xbox 360's sold. But guess what, they are willing to take that loss, because they will get all that money back + a hell of a lot more in the games and accessories. Just think, a years live subsription costs what 70 bucks, now times that by millions. Thats where they get their money from.
    
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post #15 of 43
Quote:
Originally Posted by atomicfission92
Oh and Digitrevx its a pretty well know fact that they sell the consoles at a loss. You don't have to have access to any companys manufacturing records, just look around and you will see it. Microsoft is taking a big loss on every single one of the xbox 360's sold. But guess what, they are willing to take that loss, because they will get all that money back + a hell of a lot more in the games and accessories. Just think, a years live subsription costs what 70 bucks, now times that by millions. Thats where they get their money from.

like I said you nor I know how much each console cost them to make so please to do not asume or believe everything you hear or read on the web.

So please point out absolute evidence that microsoft is taking a hit..

btw: Its not as strait forward as multiplying 70 to a million and stating thats their source of income. The company is a giant and diffrent departments support one another. Xbox is not its own entity and supports itself
post #16 of 43
i think he is just pointing out the obvious........you can't build that much rendering power into a machine for $300 (or whatever they retail at) and make a profit, but by offering a "loss leader" i.e. the console, then the user wants all the peripherals and extras, software/hardware/books/toys the works.
its a common business strategy, on a grand scale.
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post #17 of 43
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post #18 of 43
Quote:
Originally Posted by DigitrevX
like I said you nor I know how much each console cost them to make so please to do not asume or believe everything you hear or read on the web.

So please point out absolute evidence that microsoft is taking a hit..

btw: Its not as strait forward as multiplying 70 to a million and stating thats their source of income. The company is a giant and diffrent departments support one another. Xbox is not its own entity and supports itself

Im not saying that their complete source of their income, I am saying that is where they are making a lot of their profit. Selling a Controller for 50 bucks when it only cost 10 to make. Seling a little piece of plastic for the front of your console for $20 when it only takes penny's to make.

You also have to realize they are buying cpu chips and graphics chips. That are locked into their own mobo. So they are getting each one of those chips for a lot lot lower cost then if you were to pick up the hottest graphics card off the self. They are buying parts, You are buying components.

So say they lose $150-200 on every console. Big whoop. They now have you locked in. Now you will go out and buy all the games and accessories till your hearts content. Big Business will take a profit loss to ensure that you are going to be a long time customer. To make sure that you are gonna folow that platform. That profit loss is insurance to them. Its basic economics.

-edit- Thanks Nuclearcap, I was looking for all the links I was reading a while back.


"Microsoft was eager to tout the console's success, announcing that it shipped over 1.8 million Xbox 360 units during the quarter, bringing its international installed base to 5 million. Microsoft also took the opportunity to retout the fact that 60 percent of Xbox 360 owners--some three million consumers--use Xbox Live, its online gaming service. " Source from Gamespot July 20th, 2006
    
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post #19 of 43
Quote:
Originally Posted by DigitrevX
like I said you nor I know how much each console cost them to make so please to do not asume or believe everything you hear or read on the web.

So please point out absolute evidence that microsoft is taking a hit..

btw: its alot more complex then multiplying 70 to a million and stating thats their source of income. The company is a giant and diffrent departments support one another. Xbox is not its own entity and supports itself
Hi DigitrevX,

You have a valid point, we have NO absolute proof in regard to the console units being sold at a loss. Like you said, unless we actually work in the plant ourselves, we would probably never know.

What I wanted to know is, are you a console gamer? A hardcore console gamer? The reason why I'm asking this is because there have been tons of articles from gaming & business magazines that discussed the strategies behind the electronic entertainment industry, namely the console market. Profits for console manufacturers are never gained in the short-run,always in the long-run,and a big chunk of the profit comes from the games. You're probably right that the price probably cover the basic cost of the console (who knows?), but other than the basic manufacturing costs, there are still the R&D cost, the marketing cost, etc. And my guess is those are the costs that were not calculated into the console selling-price.

But then again the publishing companies might all in the same fold and this is all a big conspiracy to cheat us users from our money

There are indications that what we're saying it's true tho.. EQ:
One of the largest software raid in Asia was initiated by MS,and specifically targetted the XBOX pirated-games. A multi-national raid cost big bucks,and if MS is already gaining huge profits from the console sales, why bother? W/ the availability of pirated games,the console sales would surely soar. It would've made more sense if the raid was organized by game developer unions.

All console manufacturers require the game developers to pay license to release a game on their consoles. Nintendo had a big case about this years back,and that was the main reason why there aren't many 3rd-party games on Nintendo. Again, this "paying tribute to the console maker" move can be seen a little harsh to the developers,but it is a necessary move, presumably to help the manufacturers "break-even" with the loses. Whilst it's true that this might be simply a case of a console manufacturer being greedy, consider the opposite, with the high-competition between consoles, if I was one the CEO of one of the console companies, my strategy would be to forego the licensing and devastate the competitions. Since I'm already racking big money from the console sales, I could afford the revenue lost from licensing in exchange for market dominance... a diveAddict console in EVERY HOUSE

That's just what I think, in reality it might be a conspiracy But then again, of all the things in this world, what do we know with absolute certainty? *You think that's air you're breathing?*

As for the hardware issue, I wouldn't say it "optimized" exclusively in a software perspective. We're talking about streamlining each component to gaming performance here Probably won't make thousands of dollars difference, but it should be big enough. Considering building a rig for a server, and as a dummy terminal. The price difference would so big, that we could afford installing hundreds of dummy terminals,simply by removing all the un-needed components from each terminal. The server could cost well over thousands of dollars, whereas an individual dummy terminal could cost just a few hundred bucks or less. Well, not quite the same case w/ console vs PC, but same analogy.

If we really want to know for sure, then we'll just have to look for a "deepthroat" from one of the console manufacturing plants

My and now I really need to get back to work
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post #20 of 43
Quote:
Originally Posted by atomicfission92
Im not saying that their complete source of their income, I am saying that is where they are making a lot of their profit. Selling a Controller for 50 bucks when it only cost 10 to make. Seling a little piece of plastic for the front of your console for $20 when it only takes penny's to make.

You also have to realize they are buying cpu chips and graphics chips. That are locked into their own mobo. So they are getting each one of those chips for a lot lot lower cost then if you were to pick up the hottest graphics card off the self. They are buying parts, You are buying components.

So say they lose $150-200 on every console. Big whoop. They now have you locked in. Now you will go out and buy all the games and accessories till your hearts content. Big Business will take a profit loss to ensure that you are going to be a long time customer. To make sure that you are gonna folow that platform. That profit loss is insurance to them. Its basic economics.

-edit- Thanks Nuclearcap, I was looking for all the links I was reading a while back.


I apologize if this is kinda harsh but I just skimmed your post because honestly, I'm kinda tired of people lecturing me with facts from unreliable web sources and thinking they are on top of a situation that takes hundreds of mathematicians and accountants to crunch. Do you really think microsoft is honest when they release info on their economic status!?? Its all gossip and hype. Whens the last time microsoft hasn't lied to you. Do you recall the hype with the consol shortage during launch. nuff said...

sidenote: When I say absolut evidence I mean documents from MS not a bunch of news links
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