I do not own any consoles and likely never will, but the article is pure BS for ignorant public.
Moore's Law applies only to silicon chip, not to the rest of the hardware.
In $300 X-Box a processor costs MS about $60 - with $40 of that being cost of the chip itself - the processor base dies not get cheaper.
If in 6 years the Moore's law reduces the price by 1/8th, it will apply only to the chip, so the sabings will be 7/8 x 40 = $35.
The processor mounting, boards, metal, plastic, case manufacture, brackets, assembly will cost the same or more in 6 years, so the X-Box will cost MS $262, not $37.50!
Hard drives are not going to get cheaper as in any product there is a minimum price at which it is worth making it at all. HDs capacity will be much bigger in 6 years at thw same price but why wwould X-BOX need extra capacity.
CD-Player will not sell for less then $50 even if it plays DVD, etc. - becasue the main expence is in laser and motor, not circuitry.
How about transportation? Storage costs? Distribution expences? Retail expences? Advertising expences?
Even if MS gets the processor for free along with the chipset and graphics processor, it will not drop their cost by half.
That is true with any product that achieves maturity - cars, furniture, clothes, etc. - the price stops dropping while quality continues increasing.
Whether MS is losing money on X-Box or not, I don't know - and too lazy to examine it's quarterly reports - but the argument of that article is flawed.
miko
