Microsoft Xbox costs $525 to make

US ANALYST firm iSuppli said it had ripped apart an Xbox 360 to find out just how much the components cost.

The triple core IBM CPU used in the Xbox runs at 3.2GHz, the lads reckon. This CPU costs $106 and that represents 20.2 per cent of the bill of materials (BOM) for the console.

Add in the other integrated circuits and the BOM is a staggering $340 per console.

ATI's graphics chip costs $141 including embedded memory from NEC, a Japanese company.

Add in the DVD drive to the Xbox Premium, the RF board, the wireless controller, the cable, the literature and the packaging and the total BOM is $525.

Isuppli didn't say how much the power cord cost.

Microsoft is selling the unit for $399. Shorely shome mishtake.