Yep, you payed almost 5 times that for the pad in your store, while MS only spends 11 bucks making them: The second National Semiconductor part resides within a separate surface-mount module that forms the radio interface. The modular radio subsystem integrates the National LMX4270C radio transceiver and associated discretes within a shielded module whose design parallels that found within the Xbox 360 console itself. Here again, the die photograph reveals a combination of analog RF circuitry and logic, which likely implements the digital aspects of the radio architecture. FCC filings clearly indicate an ISM-band 2.4-GHz center frequency for the transceiver. Related FCC filings also lead to some confusion about the part indicated as a delay line or MOSFET, a site unpopulated in the FCC photos. Similarly, a small regulator is shown in the FCC filing, although this same part was not present in the unit we analyzed. The most likely explanation for this is a board design whose layout allows flexibility in features that were an uncertain element of the SC14470C during its development. The presence of a large coil and tantalum capacitor certainly points to the presence of a dc/dc converter, for example, but it seems the semiconductor aspects of same must have made it into the SC14470C, given the lack of a discrete regulator. Mystery solvers, drop me a line of you figure this one out. Bill-of-material estimates for the wireless controller come in at around $11, or 22 percent of the retail price for the product--a far cry from the negative margin of the console itself. That explains why MS said there would be the only X360 controller maker, after all with the profit margin of the pads alone they could cover all the loss from the X360 units.
Microsoft and any other company is started to earn money... So good for them that an controller isnt that expensive to make. There are allot of other products which sell for much more then the production costs, like duh
It's more due to the fact that the raw materials are estimated to cost $11. Plus paying the fees for the mold for the plastic. Plus paying the engineers who designed the thing. Plus paying the workers who build it. Plus paying the electricity bill for the building where it is built. Plus paying the freight service to ship them to america. Plus packaging materials. Plus the retailers need to take a cut. Plus... i could keep going... I'm not convinced that microsoft is actually making a profit on the controllers...
Those things (workers, shipment, etc...) are only cents, otherwise those pads would be made here and not in china..... The reality is that the materials are 5 times the amount of the rest of non-direct costs. If we had moon aliens that work for free you can bet most corporations would move their factories to the moon, even if the transportation is a rip-off. The problem is that if the pads were made in the US by american people the costs of tranportation would be just a little less, becos while international cargo is cheap (becos is made by foreing people) US transporation costs are huge (no wonder why, a trucker makes more money than the average lawyer). About the PS2, I think the final costs is $60, so even with all the non-direct costs it get to 75$, so sony amkes an average of $25 for every unit sold.
Yes I'm pretty sure it is more then $11 dollars for the controller. Considering what Ace mentioned above. Anyone with abit of logic would know this. Ummm Sony and Microsoft wishes upon a star that they would make profit with consoles sold. The only company that made money with console sales was Nintendo.
Um... no. We're talking huge costs. Let's assume that a factory can make 500,000 controllers a month. I don't know if that's true, but we'll go with it. For a good sized factory just to keep the lights on with all of the heavy equiptment needed for production would be in the neighborhood of a million dollars a month. That's $2 per unit. Salaries for every person that works at the factory... in the US, it would be roughly $4,000,000 a month. Since we're talking about china we'll drop that by 25%. That adds $2 per unit. (If you really want to get into the specifics, a chinese factory employs 100-200% more workers on average than a US factory that does the same work. This is because US factories use more automation whereas chinese factories just hire more people). Factor in boxes and shipping materials for shipping at $500,000 a month. +$1. The cost of freight to get it over here. $10 per unit. Factor in damages at the factory. Let's assume at this point in production there is a 10% damage rate. That adds $5 to each unit. Then factor in the $25 markup that retail has. We're sitting at $56 right now. And that's leaving out a crap load of other costs, such as equipment costs, molding costs, development costs, FCC liscensing and testing fees, marketing costs, lawyers fees, patent fees, and a bunch i'm forgetting about. None of these numbers are the actual figures, but you get the idea. Microsoft doesn't make any cash off of the controllers. In all likelyhood, they loose money.
Ace is right. Thats is why companies always push for a cheap manufacturing solution because the engineers, workers, shipping, marketing and anything else non-manufacturing related is what makes MS sell the controllers at that price. If you were a business owner, Shadowlayer, would you sell your product that costs you $50 to make, plus $60 worth of overhead at $40 a piece? You'd go bankrupt in no-time. Software sales and accessories is where these companies net their return on their hardware. This has been known since the NES days.
Please explain this to me. Am I getting screwed every time I buy or use a razor blade? What the fuck??? That's It. I'm going ZZ Top.
It sounded all kinda good (but not great) until I reach to this: You're joking right? I mean, just a 25% off in chinese workers? are you nuts? in those factories they dont even make $1/hour, how is that 75% of the $8-10/hour an american would make? And let's not forget that since salaries are way lower in china so is inflation: services as electrical power, water, etc... they charge you less than a 1/10 they do here, maybe even less than 1/20 in some areas. Plus MS dont have any factories, they outsource the production to 3rdparty factories that make other stuff too, so costs go down even further. Your problem is that you seem stuck in 1980 or any other year before globalization, ergo your bussines model is outdated. After all, who the fuck would take his factories to the other side of the world for salaries only 25% lower?. You need to see the whole picture: when one thing goes up, so does the rest of the economy. That's why we're stuck while they are growing. And if they sell pads at a lost, why in hell would they close the design when they could let it open for other companies to build it? No! really? Dude for real, are you reading my posts or what?
You still think that everyone in china is making shit money and works in a rat-infested factory. Well that was the 1980 business model, which was to exploit as much as possible. That is no longer the case now ever since China joined the WTO less than a decade ago. Since then China's middle-class has been growing. With it standard cost of living has gone up to where its almost the same as the US/Canada, salaries have also gone up. It is getting pricier to live on the eastern side of china, where 90% of economic growth is happening. Inflation will impact the whole country soon, it happens with every rich country. It just seems to me that you still think China is a third world country with by what you're saying... But seriously, you should work for Microsoft. I'm sure that you can have them sell the controllers much cheaper than they are now with what you know.
Man, one thing is shangai or beijin with H2s in the highway, but at the very first moment you leave the major cities you see that china is part of the third world. I went to mexico once, and it was the same: one side you got orange county and the other nicaragua. One of my ex-colleagues has a company there [china] and he told me you can increase profits 200% by just moving to medium cities where people is desperate for a job. What an american or european does for 12 bucks/hour, a chinese does it for $1 or less. Labor laws are a joke, and they only aply in the biggest cities. Anywhere else is nobody's land. I know these $11 pads are just the components, but what? you think the rest is much more? Sea tranportation is so cheap you could move an entire country with it. Saying MS is selling these pads at a loss while they keep a closed design is like saying the GG beated the gameboy. You cant deny they are keeping the right to build them becos is profitable to do so.
Actually guys, 40% of the total price of all items sold in retail stores (in the United States anyways) goes to shipping. Paying truckers, dockworkers, middlemen, etc. That's why a music CD costs you $20 and the record company gets $5 (and the artist, about 40 cents.) It breaks down something like this, for pretty much everything in retail: 10% manufacturing cost, including materials and worker's salaries 30% retail markup 40% shipping Mainly becasue most of the stuff you buy, be it pots and pans or computers, goes through several different hands before it gets to the store. It might have been bought and sold many times between different distributors. Then the store marks it up sometimes 300% depending on what the item is. Cost of materials for a music CD is like 21 cents by the way.
I highly doubt if the " One of my ex-colleagues has a company there...." post was even written by him at all.
