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  • Free Xbox 360 available

    Why is everyone so shocked?

    By Stuart Gorman: Sunday 27 November 2005, 12:06

    THERE'S BEEN a lot of talk about the fact that the retail price of an Xbox 360 is $126 lower than its production cost. However, I'm almost surprised Microsoft isn't giving them away for free.

    It's just like desktop printers and cell phones. The printer only sets you back a few pennies, but if you ever want to use the thing, buying ink will feel like giving birth. A cell phone comes free with a two-year plan, but the monthly rate is inflated to cover their loses, and not paying means your free phone is useless.

    Microsoft has done the math. They know how many games the average gamer is going to buy, and they'll get money every time someone buys one. Look at the pile of games next to your PS2. How much did they all cost? A lot more than the console, I'll bet.

    There will be some game that sells many millions of copies. If Microsoft designs the blockbuster game themselves, they'll have to pony up for the development costs, but they'll make more off it in the end. If another gaming house has the winning lotto ticket, it's just as well. Microsoft still gets about ten bucks a disk, and they don't have to risk a dime making the game.

    I guess those guys in marketing aren't such idiots, eh Dilbert? µ

    Tuesday, March 20, 2007 4:28 PM


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