Microsoft Blu-ray Xbox 360 projected to sell at a loss, if it does happen

Yesterday, we heard about the Lite-On IT, who have supposedly been manufacturing BD-ROM drives for Microsoft. Today, rumor has spawned speculation for Taiwan manufacturers. And it’s pretty glum: Blu-ray Xbox 360s may sell at a loss if they ever hit the market. Check out the full article for more info.

Since the format wars’ conclusion early this year, there have been a lot of reports regarding Microsoft planning to release a Blu-ray Xbox 360. We all know that that has since been denied more than a couple of times (additional “No Blu-ray Xbox 360” here and here). Well, today’s report centers more on the “what if” scenario where Microsoft does decide to eat its words.

First things first. Yesterday, we heard a rumor about Lite-On IT, an optical drive manufacturer, which has been manufacturing Blu-ray drives for Microsoft’s gaming console. Today, Taiwan manufacturers gave some dire predictions in case Microsoft does decide to incorporate BD-ROMs into their consoles: The new SKUs would be selling at a loss. Currently, production costs for BD-ROM drives are quoted at US$ 95 to 100 each, as opposed to the relatively low-priced DVD-ROM drives at US$ 18 to 20.

Analysts speculate that a price mark-up for the new (and theoretical) SKUs might make up for the high BD-ROM prices, though the mark-up won’t make up for nearly enough of the manufacturing costs. Also, they hypothesized that Sony, the largest producer of a certain BD-ROM component, might limit supply to manufacturers that partner with Microsoft – if so, Sony will be effectively limiting MS’ supply of BD-ROMs.

Anyway, that’s it for speculation. We’ll keep you posted on more news regarding this so stay tuned.