Microsoft makes fat profit on Xbox 360 controllers

Reports that it costs Microsoft only $11 to manufacture an Xbox 360 wireless controller that sells for $50 put another nail in the coffin of the crazy theories that Microsoft currently makes a massive loss on their console business - software revenues not withstanding.

The healthy profit that Microsoft makes on acceessories was recently analysed in this detailed article on EETimes.

No wonder Microsoft were crowing about their sales-ratio on accessories. If their ratios are anything to go by, accessories are probably making them over $120 clear profit on accessories for every console sold. Even if they are making a loss on the hardware, it's $120 less than first claimed by analysts.

Microsoft has been the accessory business for a long time, but their experience with Xbox 1 must have taught them how important accessory profits are in the console business. Of course Sony makes these profits too: just look at the gut wrenching price of genuine Sony memory cards: no wonder they didn't bother releasing a hard-drive outside Japan.

I'm starting to think that the 'analysts' like to make up the biggest, most outrageous loss figure so that they will get more attention and publicity. I'm going with the same idea: with no justification I'm going to claim that Microsoft loses $900 on every Xbox 360 sold as a result of high advertising expenses.