Xbox 360 Costs still Rising?

[Zeus]

Microsoft has reportedly said that the higher shipment of Xbox 360 units has caused the rise of higher 360 unit costs. Traditionally, the cost should go down as the company reaches economies of scale.


The company stated that the cost of revenue was "driven" by higher shipments of Xbox 360 units, increasing cost of its online services as well as "higher Xbox 360 unit costs." Especially the higher Xbox 360 unit cost is surprising, as the business model of game consoles tends to be at least partially based on decreasing unit costs over the lifetime of a device.


News Source: <A href="http://tomshardware.co.uk/2006/10/26/microsoft_q1_2007/" target="_Blank">Tomshardware</a>

[kronikdaddy]

Didn't they report a few week's ago that the cost of the 360 unit was falling?

Like here: http://www.maxconsole.net/?mode=news&newsid=11402

Where they said: “We’re progressively lowering the manufacturing costs of Xbox 360,” chief financial officer Chris Liddel told Reuters. “For the ones we do sell, we are in better shape from a loss-per-console perspective.”

[nimbus]

HAHAHA serves them right.


NO PROFITS FOR YOU!

[smudgeone]

Its funny that they thought of economics of scale, too bad they forgot to add in the additional cost of diminishing returns :)

[The Bat]

There seems to be a few details missing. The only way I could see costs rising is if they went back to their old shipping methods (flying smaller numbers instead of shipping larger ones) to get a lot of stock out quickly. And that would only be necessary if they grossly underestimated their own sales. Or perhaps the factories weren't having to run 24/7 for the past few months, and they're having to do that again for the upcoming hristmas shopping season? That's the only way this adds up. That is, unless I'm missing something.

[mattrb]

Who cares its the biggest company in the world!

[G0mez]

And that would only be necessary if they grossly underestimated their own sales.
...
That is, unless I'm missing something.
There is something missing, PS3.

While the delays etc will have affected Sony more, the extra demand for 360s in the wake of it will have become a problem for M$ as well.

[nimbus]

There is something missing, PS3.

While the delays etc will have affected Sony more, the extra demand for 360s in the wake of it will have become a problem for M$ as well.
YEAH RIGHT BTCH.

Who da fck want a GLITCHBOX 360?

LOSER

[G0mez]

YEAH RIGHT BTCH.

Who da fck want a GLITCHBOX 360?

LOSER
Those of us with friends could probably point to at least three or four people who've bought a 360 due to being fed up of waiting for PS3. I did because I was hoping to replace a dying PS2 with a PS3, as I did with my dying PS1. In the end, time caught up with my PS2 before Sony could manage to get PS3 out of the door. By the time we get them here it'll be a full year after my PS2 became unusable.

I wasn't prepared to spend £100 on a new PS2, given how poor new releases are on it now only to ditch it in, what was then 6 months time, when for £200 more I could get a 360, with a longer shelf life.

You might be able & prepared to wait for Sony to get their arses into gear, I couldn't, and probably wouldn't even if my PS2 hadn't failed.