IHS estimates Xbox One costs $471 to make, AMD gets $110 per unit

|By:, SA News Editor

After tearing down the device, IHS estimates the Xbox One (MSFT -0.1%) and its bundled Kinect sensor cost $471 to produce. The Kinect accounts for $75 of that total.

With the console sporting a retail price of $499, that suggests Microsoft could be selling the One for a loss after accounting for expenses such as such as fulfillment costs and retailer cuts. As with past consoles, manufacturing costs are bound to decline over time, as component prices come down.

Interestingly, IHS thinks CPU/GPU supplier AMD (AMD +2.2%) receives $110 per One unit. That's $10 more than the firm thinks AMD gets for each shipment of a very similar processor going into the PlayStation 4 (total estimated manufacturing cost of $381).

The report comes a few days after Microsoft announced it sold 1M One units in the console's first 24 hours of availability, and a day after Nomura predicted the Xbox division will likely lose over $1B in 2013, after factoring expenses such as marketing and R&D. Today, Janney estimates One shipments could hit 6M by March 31.