The Xbox 360 Costs More to Make than to Sell

Microsoft is practically giving away Xbox 360's as the next-gen consoles cost more to manufacture than to sell. In fact, you could say that Microsoft is much more into charity than profit.

Kotaku reports Microsoft is losing money with every Xbox 360 they sell. The fist manufacturing cost estimate was of US$ 550 but now, it looks like the console costs a bit more to make.

As Microsoft recently announced their first quarter financial results, they revealed that Zune set them back a few dollars, and that they also experienced some financial setbacks due to higher Xbox 360 unit costs.

Kotaku editors are quite intelligent as they point out that a console is supposed to get cheaper as it gets older. But looks like things are going exactly the other way around for Microsoft. I guess they won't be declaring bankruptcy anytime soon, as they handle quite a lot of cash, given the fact that they practically own 90% of the software market.

Anyway, for those who don't know what the Xbox 360 is; know that it is a next-generation console released by Microsoft back in 2005. It is the main competitor of the PlayStation 3 and it has been developed in collaboration with IBM, ATI and Samsung.