Xbox 360 Causes Microsoft to Lose Money

Microsoft recently released its new game console, Xbox 360. Strangely enough, Microsoft is losing money on the Xbox consoles. According to the article, the cost of building a console is greater than the console's price. The cost of making and testing the Xbox 360 is around $552.27 while the retail price is only $399. The article also explained that the chip that runs the console costs $106 while the graphics processing unit costs around $141. However, these two costs are projected to decrease as their manufacturing processes become more efficient.

Even though Microsoft is losing money by selling Xbox 360's do you think that they should continue producing them at this point in time?


http://money.cnn.com/2005/11/24/technology/xbox_loss.reut/index.htm