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* Great media player capabilities: Though it won't play DRMed content, it plays standard Divx and MP3s with free software from the Web. (The video player software that came with it was some annoying proprietary thing. The MP3 player was fine, but the free media player I got plays OGGs too.) Battery life can be a problem with long movies, but not for episodes of The Venture Brothers, well if only there were some way to get episodes of that show in DiVX format, I mean. (Oh, The Simpsons, The Tick, GitS: SAC , Paranoia Agent Futurama whatever turns you on... live action TV too, an hour is no problem.)

* Great gaming capabilities: I mean it has a touch screen and an analogue stick... but unfortunately not so much commercial software. Stuntcar Extreme which came with it, is great for showing off it's 3D graphics, rumble feature, and smooth controls using the analogue stick and buttons. For a game that uses the touch screen, the Warfare Inc. demo is kind of fun, and it comes with a version of Solitaire. Homebrew has been sort of hit or miss for me. I like Beats of Rage, but most of the other stuff I tried to install required a memory wipe.

* All the note taking, life organizing, alarm clock type features you would want. Oh, and I downloaded a Tone Dialer for it that works but you have to get the speaker of the Zodiac really close to the reciever.

Annoyingly, the Tapwave Zodiac failed marketwise, I'm not sure why. I'm guessing they had too much debt and needed to hit it big right away. Or perhaps it was simply to beautiful for this world.

Anyway, buy a Tapwave Zodiac! It will make your life better! Chicks dig them... well, ok not all... maybe not even most, but I'm sure some do. Besides it's cheaper than a porsche!

AcidSolitaire Collection with winnable games. Enough to keep you busy for years. 4-suit Spider with known winnable games is da bomb. http://www.red-mercury.com/products_windows.html

The bottom line is that console manufacturers often heavily subsidize their new machines, swallowing huge losses up front in hopes that they'll make it all back selling games...

Sony didn't and doesn't sell PS2 at a loss, nor does Nintendo and their game cube. The only console maker selling at a loss is MSFT and their XBox. I saw another article somewhere that proved it in Sony's case by looking at Sony's financial statements, but I can't seem to find it right now...

It comes from two sources. Firstly, standard practice in the console biz is to start selling the thing at a loss, with the expectation that you can optimise the production pipeline, so that you can make a profit on the boxes sold later. That's actually quite a specific price bracket, and is chosen to reduce the cost of entry, maximising profit from the system in totality (including game royalties). In effect, the hardware is being subsdised from the game royalties. Note that Sony started like that for both the PS1 and PS2, and now makes a small profit (I think it's around £20 a box) on the PS2.

Second piece: The original market price of the Xbox, claims that they were not going to drop the price, and then the round of price cuts. That's circumstansial, but if they were not selling the boxes at a loss [0] after those steep cuts, I'll be very surprised.

Interesting economics point: How many games does the average console owner have, per console? I'll take a stab at 4. Therefore, the correct thing to look at, from a business point of view, is not the profit per console - but the profit from console + 5 games. Me, I'd price the box so that the initial loss on the hardware is around the profit on 4 games [1]. Keep the initial cost's low, more adoption, and leach the money out of the customer base over time.

Now, that's all well and good, but none of that says how much profit is made on each box right now , only what they would have done at launch (loss), and near the end of the xbox lifetime (profit).

I'm going to accept that after the price dropped to 200, they were making a loss per box. They seemed quite forced into it, mainly by Sony, who had probably already improved the manufacture of PS2's, so they were not worried by the price cut.

Do they make a loss now?

Let me evade that for a moment, and discuss the development costs of the console. Aught they to be included in the 'cost' per unit sold? From a strictly business point of view - yes. You need to make back that money, before any profit is generated. From the 'does the manufacturer lose money on this sale' point of view - no. You can make the dev costs back from other sales. This complicates the whole question.

Note that this is based on economic arguemnts, and this sort of anaylsis will applie to any sales model that has a buy in cost that is greater than the per unit cost (printers, razor blades etc).

Let me link to a few facts: BBC: Microst loose $177 million. Note that that's from September last year, and is for 3 months preceding, off revenue of $1.28 billion

Q4 2002 (CNET) made a $348 million loss for the division.

Next quarter (Q1 2003) at CNET, and it's $190 million loss.

And it's too early for Q2 2003 data (rember that we need by divisional break downs, not overall profits for this).

So, they're definitly making a loss somewhere in their buisness, within the division that handles the Xbox. Is that on the xbox itself, or something else? [2]

No one can answear that. Apparently Mircosoft have confirmend that they make a loss on the hardware.

I'll take a different take to the linked article. The initial launch price was $300. Assume microsoft get $7 per game (average of the 5-10 range), and that would put the manufacturing costs at $330, or so; consistant with the analysts estimates in the above link.

They were forced to drop the price to $200 before they wanted to - I think that's clear. So suddently they were makeing over $100 loss per system. How much had they managed to reduce costs by? The above link trys to assert that they drop in lines with Moores law - that's crap [3]. My guess is that the cost is sliding down into the $220 to 250 range, based off the fact the M

The reason they don't want you to be able to run other operating systems on their hardware is that they depend entirely on licensing fees from software sales to make their money. If you buy an XBox, mod it, and run Linux on it, they very likely have lost on the order of $10.

The XBox is probably in trouble as it is.

Good post, but you missed something here.

Microsoft (and most of the other console vendors) actually sell their consoles at a loss. They make up the profit by getting a cut of every game sold. By hacking the box and running Linux on it, you are completely removing their profit potential for that unit. Effectively, they just paid you to have a new Linux box in your living room.

And according to this guy, they do not.
Nintedo's advertising for the cube has been very low key compared to the other 2 this time around. Furthermore the fact that Nintendo and Sony own their own FABs means they can refine their production process in such a way that the consoles come with a healthy profit margin 2 years or so down the line (you can bet Sony is making a mint on those PSones still being sold for 50 Euros). I doubt Microsoft is capable of convincing NVidia and Intel that it'd be a good idea to combine their 2 xbox chips (exactly what Sony did a few months ago in the PS2).

You are 1000% correct.

I am tired (oh so very tired) of all this authority being used when discussing price/profit/cost of game consoles.

its all mostly conjecture - these slashdrones (nor I (or yourself)) have ANY idea what the reality is..

here is a past article on /. talking 'bout Xbox economics (and the other consoles) that deflates (i believe) the "consoles are always sold at a loss" -- i would guess this is not true... but thats just a GUESS...

Nope, you're wrong. Microsoft do make a loss on every xbox, but that doesn't hold true for other manufacturers - even at product launch. You should read Monday Morning CEO If you haven't already for a detailed breakdown on how the economics of selling games consoles works.

It is official; Red-Mercury confirms: XBOX is dying

One more crippling bombshell hit the already beleaguered XBOX community when Red-mercury confirmed that XBOX market share has dropped yet again, now down to less than a fraction of 1 percent of all game consoles. Coming on the heels of a recent survey which plainly states that XBOX has lost more market share, this news serves to reinforce what we've known all along. XBOX is collapsing in complete disarray.

You don't need to be a Kreskin to predict XBOX's future. The hand writing is on the wall: XBOX faces a bleak future. In fact there won't be any future at all for XBOX because XBOX is dying. Things are looking very bad for XBOX. As many of us are already aware, XBOX continues to lose market share. Red ink flows like a river of blood

Let's keep to the facts and look at the numbers.

As the red-mercury states " The XBox hardware has been estimated to cost Microsoft $320 to $400 to build in 2001. They have been selling the box for $299, and this month they have dropped the price to $199 to keep up with Nintendo and Sony. Even after six months of cost reduction, they may still be losing $100 on each XBox sale. Nobody knows how much Microsoft is really losing, but they have confirmed that they are selling the hardware at a loss. Will they really be able to make up all of these losses with software sales?

"Microsoft is the only one that has bought in to this 'lose money on the hardware' idea."

All major surveys show that XBOX has steadily declined in market share. XBOX is very sick and its long term survival prospects are very dim. If XBOX is to survive at all it will be among OS dilettante dabblers. XBOX continues to decay. Nothing short of a miracle could save it at this point in time. For all practical purposes, XBOX is dead.

Fact: XBOX is dying

(The contents of this post are released under the BSD license, feel free to copy, improve, and repost-it. v0.0.0.2).

It is official; Red-Mercury confirms: XBOX is dying

One more crippling bombshell hit the already beleaguered XBOX community when Red-mercury confirmed that XBOX market share has dropped yet again, now down to less than a fraction of 1 percent of all game consoles. Coming on the heels of a recent survey which plainly states that XBOX has lost more market share, this news serves to reinforce what we've known all along. XBOX is collapsing in complete disarray.

You don't need to be a Kreskin to predict XBOX's future. The hand writing is on the wall: XBOX faces a bleak future. In fact there won't be any future at all for XBOX because XBOX is dying. Things are looking very bad for XBOX. As many of us are already aware, XBOX continues to lose market share. Red ink flows like a river of blood

Let's keep to the facts and look at the numbers.

As the red-mercury states " The XBox hardware has been estimated to cost Microsoft $320 to $400 to build in 2001. They have been selling the box for $299, and this month they have dropped the price to $199 to keep up with Nintendo and Sony. Even after six months of cost reduction, they may still be losing $100 on each XBox sale. Nobody knows how much Microsoft is really losing, but they have confirmed that they are selling the hardware at a loss. Will they really be able to make up all of these losses with software sales?

"Microsoft is the only one that has bought in to this 'lose money on the hardware' idea."

All major surveys show that XBOX has steadily declined in market share. XBOX is very sick and its long term survival prospects are very dim. If XBOX is to survive at all it will be among OS dilettante dabblers. XBOX continues to decay. Nothing short of a miracle could save it at this point in time. For all practical purposes, XBOX is dead.

Fact: XBOX is dying

(The contents of this post are released under the BSD license, feel free to copy and repost-it).

http://www.red-mercury.com/N710Ctech.html

Red Mercury writes: "Sony has just announced their much anticipated high resolution (320x320) Palm OS-based PEG-N710 Clie Handheld. You can read their press release, and check out Red Mercury's experience with a pre-production unit here."

A total of three links to his site in the first three lines. Not bad for a shameless self-promotion :-)

Red Mercury writes: "Sony has just announced their much anticipated high resolution (320x320) Palm OS-based PEG-N710 Clie Handheld. You can read their press release, and check out Red Mercury's experience with a pre-production unit here."

A total of three links to his site in the first three lines. Not bad for a shameless self-promotion :-)

Red Mercury writes: "Sony has just announced their much anticipated high resolution (320x320) Palm OS-based PEG-N710 Clie Handheld. You can read their press release, and check out Red Mercury's experience with a pre-production unit here."

A total of three links to his site in the first three lines. Not bad for a shameless self-promotion :-)