People are also ignoring the cost of all the IP that is going into this system. MS have bought (or extensively licenced) all the hardware, and spent huge amounts of money on the software. Last time I checked coding software to run on a proprietary hardware like the xbox 360 is extremely expensive. And to get good coders, the kind MS would require for stability and security, this is potentially going to cost more than the hardware itself. Its like saying sales of Windows are 100% profits. In actual fact the software coding costs can be just as much as hardware costs.
In addition MS have created a huge central server system called Xbox Live which will need to be completely fail safe and have enormous bandwidth as every Xbox 360 is setup to connect to the service from the get go.
Come to think of it, the hardware costs for the Xbox would be probably low compared with the backend Live stuff and the software coding.
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People are also ignoring the cost of all the IP that is going into this system. MS have bought (or extensively licenced) all the hardware, and spent huge amounts of money on the software. Last time I checked coding software to run on a proprietary hardware like the xbox 360 is extremely expensive. And to get good coders, the kind MS would require for stability and security, this is potentially going to cost more than the hardware itself. Its like saying sales of Windows are 100% profits. In actual fact the software coding costs can be just as much as hardware costs.
In addition MS have created a huge central server system called Xbox Live which will need to be completely fail safe and have enormous bandwidth as every Xbox 360 is setup to connect to the service from the get go.
Come to think of it, the hardware costs for the Xbox would be probably low compared with the backend Live stuff and the software coding.