Saw on [url=http://www.gamesindustry.biz/content_page.php?aid=9320]GamesIndustry.biz[/url] that Microsoft is set to lose $75 on each Xbox 360 console it sells. This information is based on the fact Microsoft is going to sell the Xbox 360 at $299 but analysts at investment bank UBS are predicting that they will have to pay $375 for its manufacture.
"The $75 subsidy reportedly required to hit the launch price is quite high, but not unusual for a new console. Platform holders routinely subsidise their consoles at launch in order to build an installed base, and then make back the money from software sales and the rapidly falling price of hardware manufacture late in the lifespan of the console.
However, Microsoft found it more difficult to do this with the original Xbox, since it had to continue buying components from partners such as NVIDIA and Intel at high prices - unlike Sony, which has been able to hugely reduce the manufacturing cost of the PS2 as it builds most of the core components itself."