[Aka]

I think they're sold at a loss, but not that big a loss. Concider the bulk they're buying the parts. Also, where did these people get their numbers? it's not like you can call up IBM and ask "how much is MS paying for your processors?"

That said, overtime it wont be sold at a loss, only in the beginning. Most consoles are sold this way. They're expensive at first because production at the beginnings costs more, it's an unknown as to how many will sell. But the more you sell/buy the cheaper parts become. You're no longer developing new technolgies, you're only trying to develop ways to save. And as the technology matures, it becomes easier to produce (generally), which means cheaper to produce. Which means eventually it wont be sold at a loss.

Bad example, but the past what, 2 years? you could buy a Dell with a flat panel screen for what? $500? those were generally 2.4-2.8 GHz machines. So now concider the xbox is only a 700 MHz? celeron? it's dirty cheap, the parts were probably dirt cheap by for a conciderable amount of time. Take the hit in the beginning, if it's good, you'll make it back over time, and then some.


I think.