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Microsoft loses over $150 on Each XBOX 360 it Sales!
Lowball Marketing. Used very often by car salesmen. They quote you a low price for the car itself, but then get you to buy certain more expensive addons. I guess it's a similar thing here.
there is also the old Bait and Switch tactic. when the Xbox came out into the stores, Best Buy was advertising it for $300.
*BUT*
you had to buy an additional $400 worth in accessories to get the $300 sale price. something NOT mentioned in the ad and the tv/newspaper stations here were all over it.
it was so blatant and publicized that many state Attorney General offices are looking into the advertisement and pressing charges against Best Buy.
yeah, the parts they put in now. Don't forget though, those same parts will be a lot cheaper in 6 months. Technology prices drop like crazy once they become massed produced. Look at cameras. 5 megapixel cameras are 200 bucks. A year and a half ago I bought a 3 megapixel camera for 400 bucks. Once the pieces for the xbox 360 have been massed produced for a few months, the price for those pieces will drop. Make no mistake about it, microsoft isn't going to go out and lose money on something like the 360 in the long term.
That's not how Microsoft is doing it though. They won't break even if they sale a certain number of machines. They lose that on the parts they put into each 360; not what they've put in the R&D. They'll make money on the games and other accessories.
Microsoft is doing the same thing boeing and airbus do. The first few products they sell, they are losing money. Aircraft manufacturers have to sell so many planes, say 100 (that's just a guess) before they start making a product. Microsoft is doing the same thing. Once they sell enough units to cover research and development, they start making a profit on every unit they sell. Thats also about the time they start dropping prices on them.
well considering the 360 only cost $400 in canada too (that is canadian) there is no reason why not to sace $100+ and go over the boader and get one cheaper!
well considering the 360 only cost $400 in canada too (that is canadian) there is no reason why not to sace $100+ and go over the boader and get one cheaper!
I have an Epson R200 printer, it takes six ink carts. The total for all that ink is around $120. I just buy the printers when they are on sale. Every few months you can get the printer for $100 with a $40 mail in rebate. So should the rebate come though, you get all that ink for $60 (Even $100 is a good deal ;P). They seem to be full carts as well, not half full trail things.
There's a specific name for this type of marketing, but I can't remember it now. I'll have to do some google work.
Lowball Marketing. Used very often by car salesmen. They quote you a low price for the car itself, but then get you to buy certain more expensive addons. I guess it's a similar thing here.
Good theory, and also highly likely. Since you mention printers, just take Lexmark as an example: They sell their printers for around €30, and then sell the cartridges for €28-35. That shows where the money often lies: Not the product itself, but supplies and other additions for it.
I have an Epson R200 printer, it takes six ink carts. The total for all that ink is around $120. I just buy the printers when they are on sale. Every few months you can get the printer for $100 with a $40 mail in rebate. So should the rebate come though, you get all that ink for $60 (Even $100 is a good deal ;P). They seem to be full carts as well, not half full trail things.
There's a specific name for this type of marketing, but I can't remember it now. I'll have to do some google work.
Thats the usual thing for every console and many other products...Printers come to mind.
They make their money off games and other stuff you buy for the console.
Good theory, and also highly likely. Since you mention printers, just take Lexmark as an example: They sell their printers for around €30, and then sell the cartridges for €28-35. That shows where the money often lies: Not the product itself, but supplies and other additions for it.
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