Xbox 360 reportedly costs around $525 to Microsoft

Xbox 360 reportedly costs around $525 to Microsoft

It is not a hidden fact that Microsoft is selling the recently launched Xbox 360 at a loss considering the specifications are pretty impressive. The company has revealed no details on how much they lose on each Xbox 360 sold in the market. However, industry research group iSuppli has done some research work on the internal components present in the Xbox 360 and have revealed that the gaming console would be costing the software giant around USD 525.

This means that Microsoft is subsidizing the Xbox 360 by around USD 126 with the basic model of the console selling at a price of USD 399. Microsoft has usual has declined to comment on this information released by the El Segundo, California-based microchip research firm. However, the fact that the company is making a loss on every unit of Xbox 360 sold is not surprising.

Most console developers tend to sell their machines initially at much lower prices to attract the consumers and try to make a profit on accessories and gaming software. They also collect licensing fees from third-party game publishers. Some of the games for Xbox 360 sell for as much as USD 65. IBM seems to be the hot property at the moment as they are supplying one of the most expensive parts of this console, the processor.

And if we consider the fact that IBM also is part of the group, which develops the Cell processor that would power the upcoming Sony Playstation 3, we do know who gets the benefit the most from this war between the next generation gaming consoles! Interestingly, Nintendo Revolution too would be powered by a custom IBM chip as its centerpiece.