The Xbox 360’s fancy motion-sensing camera Kinect may cost you $149, but according to a report from UBM Tech Insights, it costs Microsoft a whole lot less.
UBM have got hold of a Kinect, torn it apart to examine each of its components then tracked how much each of them cost. What they found was that each of the cameras costs Microsoft approximately $56, of which the single biggest expenditure is Israeli company PrimeSense’s “reference system” of cameras, microphones and processor, which clocks in at $17. However, the pricing doesn’t include all of the other costs associated with the product such as the money it cost for development, advertising, packaging, assembling.
When Microsoft said it would be selling every single Kinect at a profit I guess they weren’t joking even with the $500 million they are spending on advertising.