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Xbox One teardown: It's close to break-even (just like PS4)

Xbox One teardown: It's close to break-even (just like PS4)

November 26, 2013 | By Kris Graft




Sony and Microsoft have apparently taken careful steps to make sure they aren't taking big losses on each PlayStation and Xbox sold this generation, a recent hardware teardown analysis shows.

IHS, which conducts market and manufacturing supply chain research, told AllThingsD that the Xbox One costs Microsoft $471, including parts and manufacturing, or $90 more than Sony's PlayStation 4.

The console, which comes packed in with a Kinect 3D camera, retails for $500, leaving a slim profit for each console. Selling close to break-even is in line with what Microsoft had stated prior to the Xbox One's recent launch.

IHS recently conducted a teardown of the PlayStation 4, estimating that the console cost $381 in parts and manufacturing, just under its $400 retail price.

These tamed hardware costs are significant to Sony and Microsoft's video game businesses while Nintendo has routinely made sure hardware is sold close to break-even, Microsoft's Xbox 360 and Sony's PlayStation 3 initially took on large losses for each console sold. Those two companies subsequently would fight against high hardware costs until eventually breaking even.

As for Xbox One's components, the most expensive piece is the $110 AMD chip. Additionally, the controller costs come to $15, while the new Kinect is $75.

More information and fancy exploded Xbox One images at AllThingsD.


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