iSuppli: Xbox 360 Manufacturing Costs Reduced By Nearly 40%

According to electronics supply chain iSuppli, the manufacturing processes involved for Microsoft's Xbox 360 have "matured" enough to the point where related costs have been reduced signifigantly. The latest teardown analysis of associated components for the Xbox 360 show that the average estimated cost for producing a console comes out to around $323.30 US. Looking at the retail pricing for Xbox 360 consoles, the manufacturing costs are actually $24.30 US lower than the price of a "core" Xbox 360 package, and $75.70 US lower than a "premium" one.

A year ago the total bill of materials (BOM) cost for the Xbox 360 Premium, including hard disk, the DVD drive, enclosures, the Radio Frequency (RF) receiver board, power supply, wireless controller, cables, literature, and packaging, reached $525, well above the retail price of $399, according to iSuppli. Considering the up to date BOM, Microsoft has managed to reduce the pricing of its console by over 38.5%.

To be sure, the pricing for final retail hardware packages tend to factor in other costs, and the final price to be paid by the consumer could vary depending on where they live in the world. The figures above only really consider the profit Microsoft (reportedly) stands to earn from selling Xbox 360 consoles in North America alone, but admittedly this territory has always been a key market for the company. If nothing else, the company can afford to introduce new pricing points for the console thanks to lower manufacturing costs.