Kinect Costs Microsoft $56 In Parts, Most Of The Price Is Profit
![Kinect Costs Microsoft $56 In Parts, Most Of The Price Is Profit [Kinect Teardown Finds $56 Parts Cost For Microsoft]](http://tftscdn2.nexus404.com/Blog/thumbnailimages/alt/Microsoft-Xbox-Kinect-CUSTOMTFTSThumb220153.jpg)
The days of selling new platform hardware at a loss are long gone, as evidenced by this new Kinect teardown that also adds a price tag to each component. And we sort of figured Microsoft wasn’t taking a loss on what are essentially three cameras and four microphones, but we never even dreamed of how much of a loss it didn’t take.
It certainly took some cheek (because some anatomy is naughty, while other anatomy is not and we chose not this time) for Microsoft to come to market with an unproven device with such a huge profit margin, though there are other costs to take into account, like software development costs (they should have gone open source) and, probably the biggest expenditure of them all, the marketing cost. “Basically, the strength of the design is the huge design win for the Israeli fabless company PrimeSense,” said UBM TechInsights’ Allan Yogasingam. So yeah, something that also worked in Microsoft’s favor is that this is all basically old and proven technology and only the way it’s combined in the PrimeSense sensor is in any way innovative.
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2 Comments / Add Your Response?
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The TFTS Team
Wow. Can anyone really be this misinformed?
Ever heard of retail margin? Between 30% and 40% of cost goes to Best Buy, Amazon and other retailers.
Ever hear of marketing costs? MS is spending hundreds of millions of dollars on advertising and marketing.
You are clearly out of your league.
Wow. Can anyone read an article while retaining so little information?
“there are other costs to take into account, like software development costs (they should have gone open source) and, probably the biggest expenditure of them all, the marketing cost.” Guess where that’s from. Go ahead, guess. Yeah, the article. The one you supposedly read.
Also 30-40% retail margin on hardware? Try 5% if that, what you’re thinking of is software. Go look for your first clue somewhere else, junior, you can’t even spell league.