This certainly shouldn’t be a surprise to you – It’s believed that Microsoft loses money on every Xbox 360 sold. A technology and microchip research firm called iSuppli believes that it costs Microsoft $552.27 dollars to build and test every Xbox 360 system. Compare that to the retail price of $399 for the Xbox 360 system and you’ll see that Microsoft easily loses 40 percent on every box. This isn’t abnormal of course – many game consoles are usually sold for a loss in the beginning as the console manufacturers try and make back the money via game sales and game license sales. Over time, the average cost per console should also drop as the manufacturing process improves.

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