Xbox 360 Costs $715 to Make

Joystiq Joystiq is reporting that per a tip from a “high ranking friend at IBM that worked on the Xbox 360 chip design,” that Microsoft is losing roughly $300 per Xbox console sold.

“‘It costs Microsoft approximately $715 to make, the manufacturing costs are still too high, another reason why they’re producing relatively small quantities.’””

Of course Microsoft, like other technology companies, uses the hardware costs as a loss leader and hopes to make up the difference in game titles, and other revenue generated from the device. It is also worth noting that the Xbox 360, as an extender unit, will play an important roll in Microsoft’s ultimate domination of the home.

Back in November, Davis Freeberg had cited a lower number of $525 per Xbox 360 citing hardware analyst iSuppli.

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