Kinect is Cheap to Make, Microsoft Sees Large Profit Per Unit
Posted on Friday, November 12 @ 07:38:27 PST by Anthony SeverinoJust 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.
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