Content originally posted in LPCWare by TheFallGuy on Wed Dec 01 01:06:54 MST 2010
You obviously don't understand this business.
1. The xbox is produced in HUGE volumes. This has a significant impact on price
2. the xbox is sold at a loss to Microsoft. They can afford to do this because they take a percentage of every game sold. This is the same model used in printers (and razors/razorblades) and is, for example, why manufacturers ink is so expensive - to subsidize the hardware costs.
In that world, you make your money from ''accessory" sales (games, ink, cell phone subscriptions, razors) and can thus afford to subsidize the original cost of the hardware.
3. I am not connected to EA, so don't know the costs, but looking at what it costs us to develop a board that sells in relatively same numbers (low hundreds), I am amazed that they can produce the board as cheaply as they do, when you also have to account for development costs, stocking, returns, etc etc. In the real (unsubsidized) world, the pricing model is very different to the subsidized world. They reflect the REAL cost.
I suggest you try to develop a board that will sell in relatively small volumes, and then work out how much you can sell it for, and make a living. I think you are in for a shock. I see you live in Space - welcome to planet earth.