Kinect Only Costs $56 to Make
- Thread starter Greg Tito
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What about the people putting the fucker together? I mean, that's gotta be worth something, right?
Em as far as I remember from Junior Cert Business studies I think I remember the thign fairly well Loss Leaders are actually illegal.
eh, this article is misleading...there are many other factors which will cost MS money, just because the hardware may cost $56 doesn't mean that they are getting the full profit of $93.99.
to remind you idiots that delivering(transporting),retailing, production and the packaging have a fair bit of a cost in itself.
to remind you idiots that delivering(transporting),retailing, production and the packaging have a fair bit of a cost in itself.
Not considering research, marketing, prototype and copyright expenses.
That's like saying movies only cost what the plastic for the dvd costs.
That's like saying movies only cost what the plastic for the dvd costs.
Well I don't know it may differ from countries but I am quite sure that it is illegal in Ireland anyway.tk1989 said:
Thirty-five thousand for a prototype? Man, we've got to hire these guys to do government work.Jkudo said:
Seriously, the average salary for a single hardware designer is $95k a year. That's one person who is focusing on crafting a piece of hardware. How many designers were on the Kinect team? How many years did they work on this thing before they were able to craft something that wouldn't be as delicate as an eggshell, would actually do what it's supposed to, and would not bankrupt Microsoft to build and sell?
The cost of the physical materials to make something are almost invariably the largest costs which means they usually get the most fanfare, yet there are dozens if not hundreds of smaller costs that can change the price of an item dramatically.
How much more would these parts have cost if the Kinect was made solely in America (keep in mind now, it's an Israeli company that makes the chips)? How much is being spent to ship those parts to the manufacturing plant? How much are the factory workers who have to assemble all those parts pulling down? How much are their bosses getting paid and their bosses' bosses? How much is being paid to the shipping companies that bring these units to market? How much profit are retailers being allowed to keep for putting Kinects in their stores? For pity's sake, take the marketing budget by itself. If Microsoft were to sell a Kinect to every single person in the United States (300 million, give or take a few million), that would mean $1.33 of every single unit would go towards paying for the marketing of that unit. And there have already been extremely cynical opinions directed at MS for thinking they could sell five million of 'em. Five million units sold would equate to $80 of marketing cash per unit.
All of a sudden, that $94 difference between base elements and final price tag doesn't look all that big, eh?
Actually, tripling the base cost to set the retail price is not that uncommon. I used to work in a restaurant and the way the meals would be priced was to take the cost of the main entree, say a nice steak, and triple it. Soup, salad and sides wouldn't be counted but they're cheap so they're easily covered. So a $20 porterhouse steak would go for $60. Beef is expensive but it comes with endless bread sticks.
So this price point with that cost is not that unreasonable nor surprising.
So this price point with that cost is not that unreasonable nor surprising.
Good thing there are people like you to make up for those of us that are either too lazy, hypocritical, or indifferent to evoke change with our own cash.randomrob said:See this is why I've never paid Microsoft for anything ever. Because they're cheap, greedy bastards and I can get anything they release (that I actually want) better and/or cheaper elsewhere. I write this from an Ubuntu operating system.
I don't care how much R&D went into this thing, that markup is way too high to be remotely excusable. Not that I care, since I have never intended to buy one anyway. Way to piss on your users, Microsoft.
You know exactly what company exec think when they sell gaming hardware that isn't lossleader:
"Hey, we don't even have to make any good games to serve our customers, just reach for a wider and wider and wider audience and everyone who buys one... well fuck that, we've got our profit from them"
Look what happened when PS3 was a huge loss leader, how much time, money and effort Sony spent on building an amazing games collection for PS3:
SHOOTERS: Resistance (2, 3), Uncharted ( 2), Killzone (2, 3), SOCOM (Con, 4), MAG, Warhawk, Super Stardust HD, Pixeljunk Shooter (2)
PLATFORM: Folklore, Heavenly Sword, Ratchet & Clank (Tools, Booty, Crack), Infamous (2), Demon's Souls, God of War 3, LBP (2), Dark Mist
DRIVING: Motorstorm (PR, Apoc) Wipeout HD Fury, Gran Turismo (Pro, 5), Twisted Metal
3rd Party choosing PS3 exclusive: MGS4, 3D Dot Game Heroes, Ridge Racer 7
Now that's a company making money off GAMES, the things that really matters when it comes to gaming... not mere hardware.
"Hey, we don't even have to make any good games to serve our customers, just reach for a wider and wider and wider audience and everyone who buys one... well fuck that, we've got our profit from them"
Look what happened when PS3 was a huge loss leader, how much time, money and effort Sony spent on building an amazing games collection for PS3:
SHOOTERS: Resistance (2, 3), Uncharted ( 2), Killzone (2, 3), SOCOM (Con, 4), MAG, Warhawk, Super Stardust HD, Pixeljunk Shooter (2)
PLATFORM: Folklore, Heavenly Sword, Ratchet & Clank (Tools, Booty, Crack), Infamous (2), Demon's Souls, God of War 3, LBP (2), Dark Mist
DRIVING: Motorstorm (PR, Apoc) Wipeout HD Fury, Gran Turismo (Pro, 5), Twisted Metal
3rd Party choosing PS3 exclusive: MGS4, 3D Dot Game Heroes, Ridge Racer 7
Now that's a company making money off GAMES, the things that really matters when it comes to gaming... not mere hardware.