Pfft, you don't even work for MS anymore, why should we trust you :P
Is it fair to say the console cost asymptotically approaches the BOM cost as production moves along (assuming sale targets are met)? Do firms like IHS and TechInsights do a pretty good job estimating the BOMs?
Thanks for stopping in. BTW if any of us are close on specs, blink twice.
Ha.
<unblinking staring intensifies>
There is 0 chance I'm gonna comment on any of this speculation. First, I don't work there so it's not my place to talk about their plans, and second I know what the plan is (or was) so it would be really unfair to my friends and colleagues over there to give hints. So sorry, not going to get anything from me. :)
On your first question - not necessarily. It really does depend on what all you put in the console. Lots and lots of things don't really cost reduce anymore, and what's interesting is the stuff that's in a console (like disc drives, hard drives, etc.) don't have the benefit of a big industry behind them like they used to. BluRay drives for instance - guarantee game consoles are the #1 global consumer for BluRay disc drives. Contrast that to DVD drives, where consoles were probably not even in the Top 5. More and more, consoles are becoming the destination for a lot of parts where in the past they were the beneficiary of larger industry trends. This keeps costs flat.
Other thing to understand is there are two different ways of looking at the "cost" of a console. Both are very valid but very different numbers.
The first is strictly component costs. This is literally the bill for all the parts in the console.
The second is fully burdened costs. This would include amortization, transfer costs, people costs, marketing costs, etc.
Think about it this way - if I asked you what your "living expenses" are, there are two different numbers you could give me. You could give me the cost of your "bills" - things that you are committed to every month. Rent/Mortgage, Car payment, car insurance, utilities. Your committed bills would be a fair view of your living expenses (your fixed costs).
Or you could include things like groceries, eating out, video games, toys, charity donations - things that change from month/month (your variable costs)
Same with consoles. Fixed costs (your BOM) vs. Fixed + Variable are different ways to describe the cost of a console (or any piece of HW) and you use one or the other view depending on what business decision you are trying to make.
As to your second question - they do a fine job. Again, console costs aren't a "point in time" output like you get from a firm like IHS. So when I see those numbers they are generally pretty rational, but exclude a lot of critical details they can't possibly know that are equally (or more) important.