The Xbox One has been stripped down and torn apart, just like it's console rival the PlayStation 4. The system was taken apart and torn down by the good folks over at the research firm IHS. The firm revealed the individual pricing of each part of the Xbox One, including the one device that everyone believes boosts up the price of Microsoft's console.
AllThingsD managed to get the exclusive note from IHS on just what the costs per part are for the Xbox One.
The total cost of the Xbox One to make and produce is $471. By comparison, it's $90 more than the PlayStation 4, which totals $381 in production costs.
The Xbox One's Kinect carries a $75 price tag of production, not nearly at the $100 mark estimated by gamers, but it's close enough. The 28nm octocore APU from AMD clocks in at $110. The die contains both the CPU and GPU, and is actually $10 more expensive than the chip in the PlayStation 4. That's very interesting given that while the central processing speeds are nearly the same, the PlayStation 4 has a GPU grade that is nearly twice as fast as the one in the Xbox One... and it's $10 cheaper!
The Xbox One does manage to cut costs where it counts, dwindling the production budget a bit by opting for cheaper grade RAM, opting with 8GB of DDR3 as opposed to the shared 8GB of GDDR5 RAM that the PS4 houses. Due to the RAM downgrade, the Xbox One's memory only costs $60, as opposed to $88 RAM found in the PS4. Then again, you get what you pay for.
That super-sexy beast of a controller that costs you $60 out of pocket, costs Microsoft $18 to produce.
The external power supply – that massive brick that could power its own small village – carries a $25 price tag and the headset is $10.
The 500GB SATA hard drive, casing and other supplies round out the rest of the expenses, with IHS estimating $139. Though if the PS4's 500GB came out to $37, it's likely that's the same price as the Xbox One's hard drive.
Assembling all these parts at Flextronics and Foxconn? $14.
IHS estimates that Microsoft will lose about a $1 billion from the R&D, production and manufacturing of the Xbox One heading into 2014, but they may make back those expenses with the controller, accessories and, of course, royalties on the games, apps and other software services.
Many gamers are a bit livid that the Xbox One costs so much to make and offers so little in return. The hardware is already dated, not just in comparison to the PlayStation 4, but to mid-ranged PCs as well. Microsoft will really have to work hard to justify that $500 price tag.