How much does Consoles really cost?

We have already seen in the last year several sites and articles discussing how much are Console manufactures making out of their latest consoles, and the result are manufacturing costs near to break even or even turn on a profit next to the Retail Price of the consoles.

Yet most sites seem to fail in the same mistake, the retail price is not how much money Sony, Microsoft or Nintendo get out of Each console sold, as this price includes a cut for the retailers, name it Amazon, Gamestop, Bestbuy, etc, in charge or sell the console to the population.

So to calculate actually how much are companies is Profiting (P), or not, out of each console, we need to calculate how much is really Earning (E) for each console sold at retail, so we will find out the Retailers Cut (RC) and subtract it from the Retail Price (RP), and then obtain the different between Earning and Manufacturing Cost

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For the Retailer Cut we will work with an estimated Cut of 20% over the Retail Price (as 20% is the minimum most retails aim to make out of hardware sales)
  
so we have

Manufacturing Cost (MC)
Profits (P)
Earnings (E)
Retail Price (RP)
Retailer Cut (RC)

then

RC = (RP.20)/100

E =  RP - RC

P = E - MC

SONY's PlayStation 4

Site IHS released a teardown cost of the PS4, calculating components plus the cost of assemble it, and concluded that Manufacturing Cost is 381$, while its Retail Price is 400$

RC = (400.20)/100 = 80$

E = 400 - 80 = 320$

P = 320 - 381 = - 61$ (Loses)

after subtracting the cut Retailers get, The actual amount of money Sony receives on each PS4 sold sums up to 320$, which mean they are losing 61$ per console sold, This fit with Eurogamer's report that Sony would have a 60$ lost per console.


MICROSOFT's Xbox ONE

AllThingsD teardown on the XBone showed that the Manufacturing cost of the Console was about 90$ higer than PS4, likely to the inclusion of the new Kinect with every console. Parts sum up to 471$ plus 3$ assemble gives us a total 474$ to produce each Console, while its Retail Price is 500$

RC = (500.20)/ 100 = 100$

E = 500 - 100 = 400$

P = 400 - 474 = - 74$ (Loses)

At a higher manufacturing cost, Microsoft tries to leverage the by selling Xbox ONE 100$ higher over PS4's 400$ price point. yet at an standard 20% Retailers Cut, the higher the sales price to consumers equals a higer Cut for Retailer, so that keeps Microsoft with a lose of 74$ per console sold, 13$ more than PS4.


NINTENDOS's Wii U

Calculating WiiU costs is a little more tricky than with PS4 and Xbone, as it uses some custom parts like the CPGPU, so only Nintendo know exactly how much its cost. Then we will use CNN tear down which seem to be a close approach, which reports a total of $227  for Part, so we add another 3$ for assemble and 4$ for the Cost of New Super Mario World U(Disc and package), this give us a final Manufacturing cost of 234$. While its (NSMWU Bundle) Retail Price is 300$    
As special case we will calcule RT from Wii U as 25% given CNN states that the porcentage Stores get out of 300$ price point.

RC = (300.25)/100 = 75$

E = 300 - 75 = 225$
    
P = 225 - 234 = -9$ (Loses)

If we go by numbers, even after the price cut, Nintendo should be able to break even on each console sold, yet Reggie from Nintendo of America stated that at the original price of 350$ on release, WiiU was still being sold at lost.
The only explanation would be that some parts, likely the custom ones and the Gamepad, are more expensive to manufacture that what CNN estimates.


This is an overall and general Idea of how much a each company is sacrificing on their consoles, yet we still missed a couple of overlooked costs like the printing for manual or the HDMI cable and Shipping & Handling