"Other Dave",
Don't worry, even here on the MSFT thread, people aren't so petty that they would ignore you just because your screen name resembles that of somebody who disagrees with them about MSFT's prospects.
Anyway, I sincerely doubt that the R&D and design work is factored into the per-machine costs, since as NRE it cannot be figured per machine. After all, what percentage of the cost of developing Windows CE should be applied to XBox's NRE? How about the DirectX game development libraries? How about the purchase price of Bungie? How about the lost revenue due to cancelling the Macintosh versions of the Bungie games that were under development?
By the way, if you decide to purchase MSFT shares, I recommend against doing so on the basis of XBox's potential. Even if hell freezes over and MSFT rapidly monopolizes the game market, killing PlayStation and Nintendo, that would only allow MSFT to justify its generous P/E for another year or two. Also, consider that when they lose $150/machine, they need to sell an average of ten games at $15/copy royalty just to break even, not counting development or marketing.
Now since the xbox sells for ~400, is this b/c the "guts" cost 550?
No, the build cost would be lower. Remember, MSFT doesn't sell XBox to distributors and discounters for $400. It's probably closer to $240-280 (at 30-40 points discount). So adding that $150/box, the cost of goods is probably around $390-430.
Dave |
