A report has suggested that Microsoft's claim to be making a profit on each Kinect for Xbox 360 it sells is by no means an exaggeration, with a predicted bill of materials cost of just $56 dollars per unit.

The EETimes report on a teardown by UBM TechInsights suggests that the total cost of materials is just under £35, which given that it sells for £130 in the UK, represents a significant mark-up.

Considering that Microsoft is apparently spending a billion dollars split between marketing Kinect and its Windows Phone 7 mobile OS, you can safely project that a good percentage of that profit is going on advertising.

R&D

Of course, there are other factors such as research and development to consider, something that Microsoft has already publicly stated cost hundreds of million dollars.

The console is already selling well in the UK following its launch this week, with demand outstripping supply for the time being.

And with the busy Christmas shopping period now in full swing, you'd imagine that Microsoft's big investment will begin to show some returns in the coming weeks.

Via Vg247