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Cost to make Xbox One

Demon_Skeith

Demon_Skeith

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A teardown of the Xbox One – console, Kinect, and controller – reveals an overall manufacturing cost of $471 (£289) – approximately $90 (£55) more than Sony's PlayStation 4.

The hardware breakdown of both consoles was done by research firm IHS, with the results being exclusively revealed to AllThingsD.

The main source of the price disparity is the Kinect sensor, which costs at least $75 to make and comes included with the Xbox One. The PlayStation camera is not bundled with the PS4.

The "biggest cost driver", though, according to Andrew Rassweiler (the IHS analyst who oversaw the teardown, is AMD's microprocessor. Similar to the one found inside the PS4, the chip combines a CPU and a graphics-processing unit. Its cost was estimated at $110, around $10 more than the AMD chip in the PS4, and was highlighted as the most expensive component in the box.

Memory also contributed to the price difference between the two consoles. The Xbox One contains older, more commonly used chips – DDR3 memory – compared to the PS4's newer GDDR5 memory. The Xbox One's memory cost around $60 – that's $28 less than what's in the PS4.

Here's the full breakdown:

  • Console: $332
  • Kinect: $75
  • Controller: $15
  • Power brick: $25
  • Headset: $10
  • Production: $14
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wait wait wait wait! It costs $15 to make the controller? Why the hell is it being sold for $59.99 USD?
 
Got to admit, like Sony with the PS4 these companies are definitely making money on their controllers, from what I understand it costs Sony £11 to make their controller and they sell it for way more than what it costs to make.
 
That's so easy for someone to say that isn't in the position. You have no idea what you would actually do unless you were in that position, you would only know what you would "like" to do.
 
Demon_Skeith said:
I go by the term less is more, I would market it $40 and make a nice profit.
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I agree, I sell controllers for $40, or less if I can, and make a nice profit by selling to many more people since it worked out well for other companies like Amazon, Samsung, Google, and Walmart at getting more people to buy stuff they want sooner.

Amazon sold the Kindle Fire for $199 or less while the iPad cost $500, so Amazon still made a huge profit on tablets by selling to many more people who would only pay $199 for a tablet. Now, the Kindle Fire is one of the most popular affordable tablet brands in the US, Canada, and other countries it sells in.

Samsung also earns a lot of its sales from the many cheaper phones they sell to buyers.
 
GamerPerfection said:
That's so easy for someone to say that isn't in the position. You have no idea what you would actually do unless you were in that position, you would only know what you would "like" to do.
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that's very true, but it's what I'll say to I learn of the entire process of behind the scenes of market and selling systems and accessories.
 
$30 a console is not a lot of cash, but MS is hoping to sell a lot of consoles, so they make a lot from the millions of buyers like how people can buy a Gateway SX Windows 8 PC for $229-299 with 4GB of Memory, 500GB hard drive, DVD burner, AMD E1-2500 Processor, Radeon HD 8240 graphics, and Memory Card reader.

Gateway may only earn $20-40 per sale, but they will sell millions of desktops worldwide, so it adds up to a lot of cash in the long run.
 
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