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Home Manifesto Kinect is Cheap to Make, Microsoft Sees Large Profit Per Unit

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Kinect is Cheap to Make, Microsoft Sees Large Profit Per Unit

Posted on Friday, November 12 @ 07:38:27 Eastern by
Just how much does Microsoft earn by making you the controller?



With Kinect currently selling like crazy, even fetching premium prices on Ebay, you can be sure that Microsoft is making a killing this holiday season on their new controller-free motion sensor. But how much they actually make per unit, largely depends on how much it costs to produce each Kinect in correlation with the retail price.

According to a complete Kinect "teardown" conducted by TechInsights, a division of United Business Media, Kinect costs a mere $56 in materials. That's nearly a $100 markup at retail. I guess they had to pay for their 500 million dollar marketing campaign somehow.

Passing cost onto the consumer isn't anything new with Microsoft. Just last week we reported that the Xbox LIVE price increase was due to Microsoft securing exclusives to the service.

[Source]
Tags:   kinect, Microsoft, xbox, Xbox 360, sales


Comments
  • Incipio
    Incipio
    Joined: Nov 2010
    Posted: Nov 12th, 2010 at 10:16 am
    While there's also labor cost and cost of shipping, etc etc it still would amount to nearly the price they charge. Oh well, typical I guess.

    I read somewhere that Microsoft is going to have to sell about 3 and a half million of these things just to make back the 500 million they spent on advertising...lol
    0 0
  • Incipio
    Incipio
    Joined: Nov 2010
    Posted: Nov 12th, 2010 at 10:16 am
    It still *wouldn't* amount
    0 0
  • mrallamericanboy
    mrallamericanboy
    Joined: Jun 2006
    Posted: Nov 12th, 2010 at 10:50 am
    so don't buy it. if you don't like the price no one is holding a gun to your head forcing you to buy it.

    health care on the other hand, everyone deserves it and must have it. otherwise you will be shot in the head. thanks liberals...
    0 0
  • danielrbischoff
    danielrbischoff
    Joined: Nov 2009
    Posted: Nov 12th, 2010 at 12:31 pm
    Buy one - Pay for one to be given away at Burger King
    0 0
  • MrrClean
    MrrClean
    Joined: Aug 2010
    Posted: Nov 12th, 2010 at 1:37 pm
    I don't have an XBox, and have no intention of buying one, the reasons mentioned above among many helping to make the decision. Don't gotta pay **** to use the PSN... they get my support!
    0 0
  • BelgianROFLs
    BelgianROFLs
    Joined: Jun 2008
    Posted: Nov 12th, 2010 at 6:40 pm
    Possible holiday sale? $99 Kinect?
    0 0
  • BenWuLovesYou
    BenWuLovesYou
    Joined: Jan 2007
    Posted: Nov 15th, 2010 at 10:38 am
    Holiday sale when it just came out and they can reap the benefits of people buying it brand new for Christmas at full price?
    0 0

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