Fri, Nov 12, 2010 | 06:27 GMT
Report: Kinect costs $56 to make
When Microsoft said Kinect’s selling for a profit, it wasn’t kidding.
As reported by EETimes, Kinect carries a bill-of-materials (BOM) of roughly $56 and features chips made by PrimeSense, Marvell Technology Group, Texas Instruments and STMicroelectronics NV, according to an analysis performed by UBM TechInsights.
“Basically, the strength of the design is the huge design win for the Israeli fabless company PrimeSense,” said Allan Yogasingam, a technical marketing manager at UBM TechInsights.
“They’ve provided the most innovative portion of the Kinect with their image processor, audio and video interface.”
Xbox boss Don Mattrick said last month that, while Kinect has cost “hundreds of millions of dollars” to develop, it’s retailing with a margin at $150 in the US and £130 in the UK.
kinect released on November 4 in the US and November 10 in the UK.
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Posted in: Hot, Microsoft, Xbox 360
Tags: Allan Yogasingam, UBM TechInsights
10 comments
#1
OrbitMonkey
12/11/10, 7:02 am
And all put together by INdonesian orphans who work for food… Honest! O_o
#2
JPickford
12/11/10, 7:07 am
This is like saying games cost $2 to make.
#3
Mike Honcho
12/11/10, 7:58 am
I work in the semiconductor industry and that $50+ BOM would be just about right.
KINECT retails at $150 …. M$ FTW.
#4
Chris2pher_Jack
12/11/10, 8:03 am
Weren’t they originally stating that Kinect would sell at a loss? Wonder how much they cut back, cheap bastards, but this is predictable from the company who attempted to save less than 10 cents per 360 console by removing a small part which caused the RRoD.
#5
Jan
12/11/10, 8:49 am
JPickford +1
#6
JonDenton
12/11/10, 9:21 am
What the cost sale to retail is surely a more interesting indicator of the mark up? I’m assuming it’s around 50%, so $75, so around a $20 profit per unit. And that’s without factoring in other costs.
Good for Microsoft for making a profit on hardware in this climate.
#7
JPickford
12/11/10, 11:02 am
On top of dev costs theres the alleged half billion marketing budget. That adds $100 per unit to the cost of the projected 5million units this year.
MS business model is bewildering to me. I still don’t think they’ve made a penny on the whole Xbox project.
#8
Mike Honcho
12/11/10, 12:24 pm
SONY has prolly made profit (if at all) only recently on the hardware side, since going Slim …. while the XBOX console has reached maturity a long time ago.
Chip prices & manufacturing costs are still on the dirt-cheap levels and it’s going to stay that way for some time.
There’s some good profits to be made in the hardware side – though the main target has always been the software (games, DLC, etc).
Still …. KINECT at $150 …. M$ FTW.
#9
Kuwabara
12/11/10, 2:19 pm
microsoft the greedy fuckers
#10
Crysis
12/11/10, 2:29 pm
Well let’s look at it in this perspective, a game only costs a few cents in parts (the disk) so the publisher is probably making $20 fom each sale.
But this article fails to include: marketing, manufacturing, distribution, the retailer & research & development, so while Microsoft may only pay $56 in parts, it’s not hard to tell how much profit they make individually on each piece of hardware, but it may take a while for them to profit from kinect as a whole, many projects never make a profit which is why it’s hard to be innovative when the risks are just too high.