[rescue] OT: FeeCee rescue

Geoffrey S. Mendelson gsm at mendelson.com
Wed Oct 1 15:16:42 CDT 2003

N.Miller wrote:
> One of my Mac friends recently rationalized an Xbox (used)
> purchase by saying, "This will prevent me from having to
> buy a PC to game on."  When I told him M$ would still get
> money from it (we recently had a philosophical discussion
> about the fact that putting any $ in M$'s pocket is,
> essentially, putting a $ into the pocket of an entity trying
> to get rid of every UNIX sys admin on the planet), he said,

This is due to the rumor floating around that each X-Box costs MS $199
to build and buying one for $180 rips off Bill Gates for $20.

It's simply not true. When the X-Box first came out, the retail cost was
$349, and MS sold them for $199 to wholesalers. At that time, it cost
them $199 for the box itself (about $100), advertising and a portion of
the development and support costs.

Now that they've sold a few million, all of those one time costs have been
paid off, and if they sell an X-Box for $125 wholesale (retail price $250),
They are making $15-$20 profit. 

The dealers that sell them for only a $65 markup (1/2 the usual) can do
so because they don't invest anything in them. They buy them net/30
(money due in 30 days from shipping), get them in less than a week,
take them from the truck to the sales floor and sell them in a day or
so. After the time the credit card payments clear they have 15-20 days
of interest before wiring MS the money.

The people that get screwed are the small stores that buy them in small
quantites, and pay about $175 each. 

 > "Not if I only buy used games."

Yes, but he buys used games, from people who then go and buy NEW ones.

> Still seems like a bargain with the devil to me.

It is.

Geoffrey S. Mendelson gsm at mendelson.com 972-54-608-069
Icq/AIM Uin: 2661079 MSN IM: geoffrey_mendelson at hotmail.com (Not for email)
Carp are bottom feeders, koi are too, and not surprisingly are ferrets.

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