Microsoft’s Xbox One Costs $90 More to Build Than Sony’s PS4, Teardown Shows

DriedMangoes

We The North 🦖🍁
Sep 12, 2013
26,295
8,996
3,930
Which one to believe? This teardown shows it costs MS ~$471 to build an Xbox One while the EEtimes one shows it only costs ~$388.

edit: okay, after reading through it again, it seems the Xbox One console itself is ~$332 but with Kinect and everything else, it costs ~$90 more to manufacture than the PS4.

http://allthingsd.com/20131126/micr...-more-to-build-than-sonys-ps4-teardown-shows/

With the recent release of two significant game consoles, research firm IHS has been working a little extra overtime these days. After dissecting Sony’s Playstation 4, the team gave Microsoft’s Xbox One the same treatment this week to get a peek at its electronic innards in order to estimate what it costs to make.

The verdict from a report that IHS will release later today was shared exclusively withAllThingsD: The combined cost of parts and manufacturing everything that comes with the Xbox One — the console, the Kinect and the controller — comes out to $471, or about $90 more than the cost of Sony’s PS4, which debuted last week.

The Xbox One sells at retail for $499, giving Microsoft little, if any, room for much of a profit for now.

At least $75 of that cost is derived from the Kinect motion-sensing add-on that comes bundled with the console. (The PS4 has nothing comparable in its box.) But the biggest cost driver inside the Xbox console, said Andrew Rassweiler, the IHS analyst who led the teardown team, is the microprocessor from chipmaker Advanced Micro Devices. Like a similar AMD-made chip found inside the PS4, this one is a combination of a CPU and a graphics-processing unit (GPU) that handles gaming graphics. At an estimated cost of $110 — about $10 more than the AMD chip found in the PS4 — it’s the single most expensive component in the system.
 
Last edited:
So Kinect is estimated to cost $75? I guess even a kinect-less version would still go for $399.
 
No, in EE times article Kinect is $39 and it's included in $388. Based on the compartments shown in ifixit teardown, I'd say Kinect wouldn't cost that much.
 
I don't get the point of this. It costs $90 more, but they charge $100 for the console, so what's the difference? It obviously costs more because Kinect is in there. They are going to try to break even on consoles now from here on out, there's no more giving away the system at a loss in their minds. Sony is going to break even, give the other $10 to retailers. MS is going to make a couple bucks, give the rest to retailers to keep them happy.
 
I don't get the point of this. It costs $90 more, but they charge $100 for the console, so what's the difference? It obviously costs more because Kinect is in there. They are going to try to break even on consoles now from here on out, there's no more giving away the system at a loss in their minds. Sony is going to break even, give the other $10 to retailers. MS is going to make a couple bucks, give the rest to retailers to keep them happy.

Well, it's just interesting to know. Essentially, MS could've created a kinectless sku to compete with the PS4 for $399 if they wanted to. This would render the price factor a moot point and the only disparity would be the power specs.

MS could've made a larger profit as well if each console only costs ~$332 to manufacture.
 
Well, they didn't beforehand that Sony was going to pull the camera out of their console. Sony did it right before E3 as a surprise, "We're going to war with Microsoft" battle cry honestly. They punched them in the balls at the last second. I'm sure Microsoft isn't going to forget it. There might be a SKU later on without a camera, but MS also wants the camera in there as a selling point to easily access multimedia entertainment for the whole family, it's their marketing angle.
 
They're both losing money after the cost of packaging, transport, distribution, etc. related to getting the boxes on shelves. Not even factoring in R&D or whatever.
 
Ouch, if the PS4 can continue to stay $100 cheaper than the Xbox One throughout this generation, which may be the case if Microsoft wants to force the Kinect on everyone, that could spell trouble.

That was one of the major advantages that the Xbox 360 had over the PS3 most of this past generation, and it appears Microsoft may have lost it.

I understand that the Kinect may be useful to people, but it's also near useless to a lot of other people (including myself). I bought the Xbox One anyway. But it's going to be tough to market a system that is more expensive yet less powerful to those that don't care about the Kinect.
 
Price/performance approximations. Not actual values but pretty close:
Wii U 299/~0.50 TF $598/TF
Xbox One 499/1.18 TF $423/TF
PS4 399/~1.84 TF $217/TF

Anyone denying the metrics and facts is only deluding themselves.
 
I understand that the Kinect may be useful to people, but it's also near useless to a lot of other people (including myself). I bought the Xbox One anyway. But it's going to be tough to market a system that is more expensive yet less powerful to those that don't care about the Kinect.

On the other hand, when marketing to people who care much less about the games and DEM FLOPZ, the Kinect and TV and Skype stuff may well be enticing. People who might not otherwise give two flips about a game box may decide that it's worth giving a shot because that stuff looks cool to them, or non-gamer parents may decide that if they're going to spend $400 on a console, they can spend the extra $100 to get one that has stuff for the rest of the family too. Or not, of course. I imagine I'm going to see a lot of ignored posts in response to this, though, because the church of pre-launch metrics are preaching that winning the six months before launch in the hardcore audience equates to the entire future of the generation.
 
  • Like
Reactions: Variance
On the other hand, when marketing to people who care much less about the games and DEM FLOPZ, the Kinect and TV and Skype stuff may well be enticing. People who might not otherwise give two flips about a game box may decide that it's worth giving a shot because that stuff looks cool to them, or non-gamer parents may decide that if they're going to spend $400 on a console, they can spend the extra $100 to get one that has stuff for the rest of the family too. Or not, of course. I imagine I'm going to see a lot of ignored posts in response to this, though, because the church of pre-launch metrics are preaching that winning the six months before launch in the hardcore audience equates to the entire future of the generation.

You sir, win the internet.

Or at the very least this forum.
 
You sir, win the internet.

Or at the very least this forum.

I've seen the internet and this forum enough to know that I should ask to see if I can get the cash value instead. ;)
 
On the other hand, when marketing to people who care much less about the games and DEM FLOPZ, the Kinect and TV and Skype stuff may well be enticing. People who might not otherwise give two flips about a game box may decide that it's worth giving a shot because that stuff looks cool to them, or non-gamer parents may decide that if they're going to spend $400 on a console, they can spend the extra $100 to get one that has stuff for the rest of the family too.

These scenarios you are describing though don't really exist:
1.) People who don't give two flips about consoles or gaming aren't going to go out and spend $500 dollars on something that neither replaces or goes beyond/improves upon what a DVR and a computer with access to the internet can already do.

2.) People who don't care about games yet have hundreds of dollars to throw around would also consider a SMART TV instead.

3.) The non-gamer parents are going to buy (or help buy) whatever console their kid wants. The kid likely doesn't care about this 'all in one family experience'

4.) To a kid/teen paying for his own new console, $100 does make a very large difference.

5.) If there is somebody that's even a halfway serious gamer in the family (7+ hours a week), they likely won't want to share their console with their family and stop gaming every time a family member wants to watch TV. Same thing with the family and their gamer son. The would likely prefer that the console is played in another room.

Growing up, my console and most of my friends' consoles were set-up in bedrooms or basements or dens, not in the living room so that we could play games uninterrupted. It may be fine for a single person living alone, but even just living with my girlfriend, the Xbox One and PS4 will never become the all-in-one centerpiece of our living room because there are many times when she wants to watch a TV show and I want to play games. So I wind up moving the console to another room or she winds up going to another room.


I imagine I'm going to see a lot of ignored posts in response to this, though, because the church of pre-launch metrics are preaching that winning the six months before launch in the hardcore audience equates to the entire future of the generation.

Give me a break, get off your high horse. Where did I say anything like that?

As stupid and petty as the arguments may get on this forum, I don't see anybody claiming that the 'winner' between the PS4 or Xbox One will be decided in the first 6 months. Personally I hope they both 'win', just like they both 'won' last generation IMO. However, there is no denying that the bad PR, higher price point, and less power could hurt the Xbox One's sales. The hardware isn't going to change and although manufacturing costs will go down for the Xbox One, Sony's will as well. My statement is not based on some speculative 'pre-launch metrics' it's based on common sense.
 
I imagine I'm going to see a lot of ignored posts in response to this, though, because the church of pre-launch metrics are preaching that winning the six months before launch in the hardcore audience equates to the entire future of the generation.
Another typical and ridiculous strawman. Nobody here claimed "winning the six months before launch in the hardcore audience equates to the entire future of the generation". You are literally making things up. The metrics have been very reliable so far.

For example, we know by the metrics that MS regained 10-15% consumer interest by doing a 180 on their DRM policies. People here should be celebrating that but instead curse the "entitled whiners" and keep complaining about metrics not mattering.

I've always said Xbox won't gain traction with the casual market until a price drop and possibly more exclusive games. The casual appeal is there, but the price isn't yet. Now please point out to me this army of casuals that's ready to stampede out and buy a $500 box for Kinect 2.0.
 
Last edited:
I just wonder how reliable these types of estimates are, I mean people kept spreading that "Kinect only costs MS $50 to make thing" all over the place but that's not true according to Bkilian on B3D. Sony says they are selling the PS4 at a slight loss, MS has said they are breaking even or even making a small profit on the X1 so who knows what's true and what's not?
 
They make estimates based on wholesale manufacturing costs.

The main takeaway is even if they removed the Kinect (estimated $75) they wouldn't be able to reasonably drop the price more than ~$100. The console itself seems to be just as expensive as the PS4.
 
These scenarios you are describing though don't really exist:

The 360, PS3 and Wii combined to sell more than a quarter billion consoles. Those aren't all hardcore pixel counting latency-measuring people, either. I'm not saying any of the things I suggested were possible were probable or going to happen, but how many people honestly would have thought that the flipping Wii would sell 100M units when it was announced? Anyone who claims to know what is going to happen in the future had better have experienced it and came back with a time machine, because otherwise they're just idiots. :)

Give me a break, get off your high horse. Where did I say anything like that?

That stuff wasn't directed at you, just a prediction about the direction the thread would go once I typed what I typed. Since there are two ignored posts of the three following yours, I think it was a pretty good guess.
 
Stuff and attack imaginary strawmen, then proclaim people are going to ignore your argument that amounts to "casuals will buy it" while ignoring the $500 price tag. Not at all lacking in logic.