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Sony's $89 Cell processor
iSuppli calls the PlayStation 3 an "engineering masterpiece"

While Merrill Lynch may be one of the few firms projecting a win for the Xbox 360 by 2011, a new cost analysis for the PlayStation 3 puts a few more things into perspective with regards to the next generation console battle.

It looks as though Ken Kutaragi was right when he stated that the PS3, which will be priced at $499 and $599 respectively in the United States, is probably "too cheap." According to a new cost analysis by iSuppli, Sony will lose $307 for every 20GB PS3 it sells and $241 for each 60GB version. "With Sony taking a smaller loss on the higher-end model, it's not a surprise the company is steering customers to the 60Gbyte version," said iSuppli. For the United States, 20GB PS3s will account for 20% of the sales mix while the 60GB versions will take the remaining 80%.

Although its initial losses with the PS3 will be large, Sony co-chief operating officer Jack Tretton points out that the original PS and the PS2 became "incredibly" profitable after taking massive losses at launch.

iSuppli summed up it results by stating “While many fret over the high cost and price of the PlayStation 3 compared to the competition, iSuppli believes the console provides more processing power and capability than any consumer electronics device in history. Because of this, the PlayStation 3 is a great bargain, well worth its $599 price and $840.35 cost, iSuppli believes."

Microsoft, which was once seeing red to the tune of $153 per unit sold, is now making a profit of $75.70 on each console before marketing and distribution costs a year after launch.

Nintendo has already stated that it will make a profit on every Wii that it sells. Given that CompUSA lists its cost for the Wii at $237.50, Nintendo's actual costs are likely closer to the $200 mark. That shouldn't be too surprising given that Microsoft's Richard Teversham likened the Wii to a Gamecube with a DVD drive (someone should tell Tevesham that the Wii doesn't actually play DVDs…for now).



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By encryptkeeper on 11/17/2006 9:51:47 AM , Rating: 2
That shouldn't be too surprising given that Microsoft's Richard Teversham likened the Wii to a Gamecube with a DVD drive

Ok, so say he's right and the Wii is just a Gamecube with a fancy controller (which is false, the Wii is so much better than the Cube). But that also means the Xbox 360 is just an Xbox. If the Wii is twice as powerful as the Gamecube, and according to this moron, that means they are the same console, just how friggin more powerful does a console have to be than it's predecessor???

Mark my words, you will see the motion sensing, pointing ability come into Sony and Microsoft's consoles one way or another. They copied Nintendo on rumble and wireless, so just wait.




By encryptkeeper on 11/17/2006 10:40:19 AM , Rating: 2
You didn't answer my question. How much more powerful does a console have to be than it's predecessor to not be considered the same thing? The Wii has all wireless controls, online play out of the box, it's twice as powerful as the Gamecube, it can play games from all of Nintendo's console history, online weather and news, it comes with a free game, what else do you want???


By encryptkeeper on 11/17/2006 10:44:07 AM , Rating: 3
And the demos weren't running on Gamecubes, there were dozens of Wii's on the show floor.


By lwright84 on 11/17/2006 11:54:12 AM , Rating: 2
they were shells.. the demos were running on gamecubes. of course, one could argue that they were only pre-production demos and didn't need all the extra super-duper power the Wii has in comparison to the gamecube, but the fact remains. nintendo admitted it themselves and there is photographic and journalistic evidence. stop trying to argue already.


By Spivonious on 11/17/2006 10:43:39 AM , Rating: 2
I would gladly pay $250 for an upgraded Cube than $600 for a piece of trash with no games.


By thejez on 11/17/2006 10:52:47 AM , Rating: 2
i agree actually... plus you can access games from all the old school consoles!! that's going to be a blast!


By encryptkeeper on 11/17/2006 11:05:53 AM , Rating: 2
Nintendo is poised to give Microsoft and Sony real competition. Software companies are liking the new control interface for the Wii, plus they like the lower costs for development.


By lwright84 on 11/17/2006 11:29:52 AM , Rating: 2
me too.. good thing their aren't any $600 pieces of trash with no games available.


By Spivonious on 11/17/2006 4:16:56 PM , Rating: 2
LW, you seem to have all the arguments.

First off, the Wii is not an upgraded Gamecube anymore than the PS3 is an upgraded PS2 and the XB360 is an upgraded Xbox. You can say that my computer (C2D) is an upgraded Pentium 4. You can say that a Porsche is an upgraded Volkwagen. Your argument is therefore moot and I won't pay attention to it anymore.

Second, you say the "Wii-mote" is a novelty controller and once the novelty wears off, no one will use it. Dead wrong. Using the DS (currently the best selling video game system, handheld or not) as an example, when it came out everyone said "why have two screens? Developers aren't going to use that." Look now and pretty much every single DS game very creatively uses the second screen. I see the Wii-mote and all of its motion-sensing as an incredible breakthrough in gaming. As more developers climb on board with the Wii, you will see a growing disinterest in non motion-sensing games. Even Sony threw in some motion-sensing into the SIXAXIS late in the game in an effort to compete. Bottom line, it's not a novelty and it will be used in every system in the future.

Third, everyone cares about wireless controllers, that's why every system coming out now supports them out of the box.

Fourth, addressing the Wii's online system, not enough people have broadband connections to make it worthwhile. Very few of Nintendo's target audience have ever played a game online, therefore the demand for such a feature is simply not there. Plus the entire point of the Wii is to bring in non-gamers. Have a group of friends over and have fun swinging your arms around for a while. Between everyone in my group of friends we have XB360, PS2, Xbox, Gamecube, N64, SNES, Genesis, NES, Master System, and a Saturn. What system do we always end up playing the most? The Gamecube. The games for it are simply more fun than the others. Online gaming is not what Nintendo is aiming for.

Fifth, the launch titles are great. Wii Sports and Excite Truck will give hours of fun for years down the road, Zelda and Red Steel will give hours of fun singleplayer.

Sixth, the sheer number of games available (32 last I heard) for Wii by the end of the year is a testament to how easy it is to develop for. Reviews on the web must be taken with a grain of salt.

Seventh,
quote:
the novelty of this new (read: done many times before) interface
Where has this kind of control interface been done before?

I'm always up for a lively debate, so fire away.


By akugami on 11/17/2006 5:04:38 PM , Rating: 2
I love my DS but I have to disagree with the fact that most DS games creatively use the dual screens. Most put it to good use, but a lot merely use it as some sort of inventory screen or map screen or an info screen containing health, magic, etc. Part of this can be traced to the lower resolution and smaller DS screens and it makes sense to throw some of that extraneous data on a second screen but some of it for games like Mega Man just seems to put something on the second screen to have something there rather than a blank screen. Of course, you also have games like Metroid that makes great use of the touchscreen and dual screens. I wish the dust collector on my shelf (PSP) had as much of a workout as I've given my DS.


By Tilmitt on 11/18/2006 4:20:54 PM , Rating: 2
quote:
First off, the Wii is not an upgraded Gamecube anymore than the PS3 is an upgraded PS2 and the XB360 is an upgraded Xbox. You can say that my computer (C2D) is an upgraded Pentium 4. You can say that a Porsche is an upgraded Volkwagen. Your argument is therefore moot and I won't pay attention to it anymore.


The Wii actually is an upgraded gamecube. The CPU is a direct extension of the PowerPC gamecube's one, and as far as I know it is able to run gamecube games without any modification. The PS3 and Xbox 360 are both completely different architectures to their previous incarnations. The PS2 had a MIPS CPU, the PS3 is architecturally PowerPC with of course it's Cells. It plays PS2 games by including the old PS2 MIPS hardware and graphics core on a chip. The Xbox 360 has a multi core general purposeish PowerPC CPU compared to a Pentium !!! with half the cache x86 CPU in the original Xbox, and plays original games entirely through emulation.

On top of all of this, the fact that the Wii is only twice as fast as the Gamecube, compared to many times faster for the PS3 and Xbox 360, serves to further underline the point that the Wii is, in console generational terms, only a small step up from the Gamecube.

Finally as my own personal point I would like to add...

Shit hardware does not equal innovative gameplay.

There will be games with brilliant gameplay and games with bad gameplay for all three of the consoles. The Wii merely insures that all its games will be cursed with bad graphics. The PS3 and Xbox 360 will have more than their fare share of rubbish gameplay, but the games that do have amazingly gameplay will have such a fusion of beauty and gameplay that every Wii owner will curse their folly in ever believing that having crap hardware was somehow an advantage.


By XtremeM3 on 11/21/2006 8:12:29 AM , Rating: 1
You seem to have all opinions.

The Wii is an upgraded gamecube...Nintendo all but said that.

I just see a bunch of paragraphs with your opinion, not really a debate.

Novelty not wearing off - opinion/speculation

"pretty much every single DS game very creatively uses the second screen." - opinion

"launch titles are great" - opinion

"everyone cares about wireless controllers" -opinion (actually that's an incorrect fact...but whatever)

The fact that you and your group of friends prefer gamecube games does not make Nintendo the grail of gaming.

Jeff


That Almost Makes Me Want to Buy One.
By BladeVenom on 11/17/06, Rating: 0
RE: That Almost Makes Me Want to Buy One.
By phusg on 11/17/06, Rating: 0
RE: That Almost Makes Me Want to Buy One.
By WhiteBoyFunk on 11/17/06, Rating: 0
RE: That Almost Makes Me Want to Buy One.
By thejez on 11/17/2006 10:47:53 AM , Rating: 2
you dont need bloo-rhey on the PC... you download high-def right to the disk... ps3 is way overpriced... plus the directX10 cards already blows its little gpu away.... oops.


By The Sword 88 on 11/17/2006 6:50:37 PM , Rating: 3
Yeah a single 8800GTX costs as much as a PS3


RE: That Almost Makes Me Want to Buy One.
By BladeVenom on 11/17/2006 12:19:16 PM , Rating: 3
quote:
Why, do you hate Sony that much? ;-)

The usual stuff that most people hate them for. Rootkits, RIAA, MPAA, and the DMCA.

quote:
Why not fold on the Linux box too? ;-)

With only a pathetic 60GB hardrive, and a measly 256MB of main system memory you probably would want at least two.

quote:
Please post a link to the Blu Ray drive you would build into this system...

With the format war looming, I don't know who will win, or maybe no one will. Until that time, I'd rather stick with a DVD burner, and lots of hard drive capacity. Even if digital distribution doesn't win, at least the hard drives will be still be usefull, unlike a failed optical format. Check Outpost.com for hard drive sales.



RE: That Almost Makes Me Want to Buy One.
By STILTO on 11/17/2006 1:23:50 PM , Rating: 3
quote:
The usual stuff that most people hate them for. Rootkits, RIAA, MPAA, and the DMCA.


I agree! Sony is the worst manufacturer out there BECAUSE they have so much influence. Sony is in too many markets and are doing too many shady transactions they think we'll never know about. As far as HD-DVD and Blu-Ray go, I've always believed that the unprotected optical disk is a conspiracy against the consumer. (Especially when Sony pulls some stunt making it near impossible to backup your purchase!) One scratch and you have to buy a new one. If Sony wasn't a bunch of selfish pigs, the Minidisk would have been the storage of the future!


By akugami on 11/17/2006 4:02:49 PM , Rating: 3
I agree Sony is a bad manufacturer but I don't know about the worst manufacturer. I don't care about Sony's influence so long as they create products and services that I want and that benefit myself (and to consumers in general). Sony's RIAA support, rootkits and abuse of the DMCA as well as the general drop in quality of their products since the late 80's and early 90's is what makes them a bad manufacturer IMHO. Their products and company direction lately seem more self serving than serving their consumers.


RE: That Almost Makes Me Want to Buy One.
By Playto on 11/17/2006 8:43:51 AM , Rating: 3
quote:
$840 to produce sounds way too high though. You could build a nice PC for that, that would kick the PS3's electronic butt.


Somebody needs to educate this guy on computers. The Cell processor for starters, a brand new 8 core one of a kind CPU if compared to current market would easily sell for $800+ if you look at the current cost of the new quad-cores that have just now hit the market quad being only 4. Yes I do realize they are not the same style of CPU but you get the point. Next your blue-ray drive so far looks like $600-$650 which almost covers the entire $840 cost alone. Then you still have to include a graphics processor, HDMI ports, and Hard Drive. When you release your spreadsheet of the PC that beats the specs of the PS3 while staying under the $840 price barrier post it please.


By marvdmartian on 11/17/2006 9:37:03 AM , Rating: 2
Maybe he meant he could build something that could play current games better than the PS3?? Comparing the cpu's is a waste of time, if the PS3 doesn't use a computer-style cpu. The blue-ray drive is going to be good for future-proofing the system, but isn't really necessary at this point in time, is it? Honestly, how many games are available on blue-ray, versus dvd?? With new graphics cards coming out all the time, "yesterdays" video cards, while still kicking some serious butt, are dropping in price pretty quickly (as always). Hard drive prices have dropped in the past year too.

Really, the only place where it could potentially hurt you by building a similar performing pc would be in buying the ram, which went up pretty high in price in recent months. And by the time you need blue-ray drives, the price of those should drop pretty considerably (or the technology will have been bypassed by something newer/better).

So if you compare the performance, versus the technology, the OP is probably close to the truth. Doesn't matter anyways, as once Sony builds more of these things, the price will start to plummet for them, and their profit margin will go "into the black" for the remainder of this game system's life cycle.


By BladeVenom on 11/17/2006 11:50:16 AM , Rating: 2
You're embarrassing yourself. Trying to compare a bunch of mostly useless cells to a mainstream multicore processor. You obviously haven't even read what's been written by Anandtech. You're just spouting a bunch of fanboy nonsense.

quote:
"...one of a kind CPU..." -Playto

quote:
The first thing you have to keep in mind is that Cell’s architecture is nothing revolutionary, it’s been done before. -Anand


quote:
The Cell processor doesn't get off the hook just because it only uses a single one of these horribly slow cores; the SPE array ends up being fairly useless in the majority of situations, making it little more than a waste of die space.


I can't wait to see how well it runs most Linux programs.



By kamel5547 on 11/17/2006 4:18:27 PM , Rating: 2
... ok if you want us to pay retail cost for the BLue-Ray then add $799 to the cost of the PS3 as Sony's stand alone player retails for $999 on Amazon... not only are they losing money on the console, but they aren't making money that they could have. So I guess taking that into consideration the price of the PS3 to Sony is somewhere in teh area of say $1500. The teardown value for the PS3 only values the Blue-Ray at $200....


profits
By xsilver on 11/17/2006 12:11:00 AM , Rating: 2
considering that hardly anyone bought any games on the launch ps3's sony is taking an even bigger hit on their bottom line.

they need to get some kickass titles out there ASAP so that they can recoup some of their losses.
none of the launch titles really scream "buy me"




RE: profits
By tuteja1986 on 11/17/2006 12:12:39 AM , Rating: 2
In japan it was even more ;( the 20GB model goes for $430USD or 49500Yen.


RE: profits
By Playto on 11/17/06, Rating: 0
RE: profits
By dgouldin on 11/17/2006 9:45:41 AM , Rating: 2
I assume he meant even more of a loss for Sony, which would be accurate given the lower price.


RE: profits
By Zirconium on 11/17/2006 12:26:48 AM , Rating: 5
I think one reason few people bought any games is because so many people bought the systems just to resell them. Once the systems find their way to their final owners, the game sales should pick up.


RE: profits
By ajfink on 11/17/2006 11:48:49 AM , Rating: 2
I didn't realize the 360 was profitable yet (before the HD-DVD player, anyway). It will be interesting to see if the PS3 can claim the same thing in a year.


RE: profits
By The Sword 88 on 11/17/2006 6:54:37 PM , Rating: 2
I agree they need some killer games say a new FF or something


Estimated costs
By psychobriggsy on 11/17/2006 8:17:53 AM , Rating: 2
May not be real world costs. For example, they list the I/O bridge as being $59 to make, yet it is providing less functionality than a <$20 southbridge on any chipset.

Also if the PS2 hardware is only $27, then Sony are currently making a killing on each PS2 sold, and I'm sure they'll be selling at least 4 PS2s for every PS3 over the next few months.

Sony will still be making a large loss though, at least until the cost of BluRay drives drop and Sony do a cost-reduction redesign.

Also I find it hard to believe that the XBox360 has somehow had cost reductions of over $200 in a single year, without a hardware revision.




RE: Estimated costs
By milomnderbnder21 on 11/17/2006 8:43:13 AM , Rating: 2
quote:
Also I find it hard to believe that the XBox360 has somehow had cost reductions of over $200 in a single year, without a hardware revision.


Agreed, that's pretty steep.

quote:
While many fret over the high cost and price of the PlayStation 3 compared to the competition, iSuppli believes the console provides more processing power and capability than any consumer electronics device in history. Because of this, the PlayStation 3 is a great bargain, well worth its $599 price and $840.35 cost, iSuppli believes.


I'm also highly skeptical of this largely unqualified advertisement. A little too enthusiastic, methinks, for an impartial analysis.

Why is it so good? From everything I've read, hardware wise it is not so dissimilar from a 360 as Sony would have you believe. The Cell is largely an unknown (a complex one), and the GPU's are supposedly more of a wash.

Is it purely because of the Blu-Ray drive that it's such good value? Why should everyone care so much about that? I don't have an HD tv, let alone one supporting 1080p, as many people yet don't.

I'll wait for prices to drop significantly for the 360 before I potentially get one of those, and I have no plans at all to get a PS3. I don't see this great 'value' that iSupply trumpets.


RE: Estimated costs
By psychobriggsy on 11/17/2006 9:06:47 AM , Rating: 2
Looking at the article, the XBox360 motherboard, including components, is listed at $204, whilst the PS3's motherboard, including components, is listed at ~$500.

Maybe the RSX and Cell processors are a little bit more expensive than their XBox360 counterparts, but the listed prices are still low for these components. The amount of memory is the same, although the PS3 uses XDR and on-package DDR3 (maybe this is included in the cost of RSX though). The PS3 also has the PS2 hardware. Otherwise component-wise the motherboards are quite similar - I cannot see how there is a $300 difference.

Similarly with the power supply - the external, boxed XBox360 powersupply is significantly cheaper than the internal, unboxed PS3 power supply?


RE: Estimated costs
By Oregonian2 on 11/17/2006 1:53:39 PM , Rating: 2
The costs put out by this company do seem high. I think they "did" Toshiba's HD-DVD player and declared they were losing money on it while Toshiba said no-way and that they were profitable (which I'd expect, they're not exactly the big movie-disk maker who would make it up on the software). That said, the numbers as presented are a problem.

They say it costs $840 for a $600 box, so the maker loses $240. This is bogus to begin with because Sony doesn't get $600 on sale of it, there's the seller's margin, import duty, brokerage fees, etc that come off of the selling price to yield what Sony gets. Maybe this market has smaller margins, but to cover advertising and other selling costs (plus hopefully profit) retail sellers usually demand pretty good margins on things, as much as 40%. Maybe in this market it can be smaller, but it still needs to be significant to be worthwhile selling by a retailer.

I can only conclude that the retail-selling costs are included as percentage "tax" on the parts-costs that they estimate. That would be the only thing that makes things more sensible.


RE: Estimated costs
By Lonyo on 11/17/2006 5:32:11 PM , Rating: 2
But... there is no sellers margin, and that's why the retailers love the Wii.
IIRC retailers pay pretty much $600 for a PS3, then sell it for $600, they make money on software.
The Wii is sold to them for $237.50 and they sell it for $250, so they make more margin on the hardware, and THEN they also make money on the software.
But you are right about some of the other numbers, Sony have to distribute the things etc.


RE: Estimated costs
By Lonyo on 11/17/2006 6:04:51 PM , Rating: 2
They also list the Xbox 360 DVD drive being almost $20, but a plain DVD drive from Newegg costs $12 retail.

I'm really not sure where they get their numbers from, but they do seem very suspect on both sides of it, some seem too high, some seem too low.


Sony seems out of luck when you run the numbers
By jtkallman on 11/17/2006 12:21:21 AM , Rating: 3
You gotta figure that if they are losing close to $300 per PS3, that even when they start getting some good games out it will take them awhile to break even. Becuase maybe sometime next year they will get $20 per system but they will still be out some $60 million that they have to make back in games....seems to me like Sony had a rough time coming out with the PS3




RE: Sony seems out of luck when you run the numbers
By SunAngel on 11/17/06, Rating: 0
By Viper007Bond on 11/17/2006 12:35:41 AM , Rating: 3
Too bad Sony's online stuff is a joke still.

<3 XBox Live


By akugami on 11/17/2006 5:12:38 PM , Rating: 2
The old bogeyman is out to get you routine again? Seriously, how many times have places whether it's a magazine, traditional news site, blog site, etc get accused of bias? 95% of the time, these places are only reporting the news or giving their opinions if it's an opinion editorial piece. Even the Official Playstation Magazine thought the $500-600 price of the PS3 overly expensive and their a vehicle for pro-Playstation propaganda.

Take EGM. I know they are on the fanboyish side in regards to video games and many feel their reviews are not strict enough but over the course of years, they've been accused of being pro and anti Nintendo, pro and anti Sega, pro and anti Sony and who knows what else. It never occurs to the fanboys that maybe, just maybe, these guys are only saying what's on their mind and reporting what news they find. Just as Dailytech is.


By peternelson on 11/17/2006 3:29:41 PM , Rating: 3
I believe Sony ARE initially making a large loss per console.

Regardless of the ebay reselling, the ps3 without games, when in the hands of the end-user-gamer will actually get played with ie likely one ps3 game (aside from any backcatalogue of ps2 content the owner has).

Sooner or later the owner will be curious about a new great title (in 2007 when volumes are up enough to justify release to market) so will then have at least another ps3 title.

Yes they make greater margins on software than hardware.

They will also make a few online download sales.

However, the big factor is the bluray.

What is it worth to Sony for that?

Well it is worth some $ per movie disk sold to a ps3 user.

BUT it is ALSO worth something to have their format beat hdhvd in the installed userbase race and win the format war.

Therefore, Sony could virtually give their ps3 away if it guaranteed they would own the market for movie media and be a significant studio seller of movies on that media.

The isuppli analysis likely does not include (small) retail margin, differences between the 3 global markets, import duties, sales taxes etc, nor the cost of the infrastructure to run the online gaming, but they are right that currently it's a net loss.

I'd agree that costs will come down over time (and maybe we see a selling price reduction too).

But taking into account the BR format and games sales (yes even sales of ps2 titles to run on ps3) they will make money.

Now the other question is value proposition for customer:

It's more expensive than x360, but I'm getting linux ability, HDMI output (you may not have a screen but in 3 years you may), bluray player, and the ability to self-swap to a bigger hard drive (large hard drives will reduce in price making this even more attractive) whilst the x360 is stuck with small size and I can't upgrade it with permission.

So, on the whole I agree with isuppli that the ps3 represents good value to the consumer, even at this launch price.


Value
By PurdueRy on 11/17/2006 12:40:00 AM , Rating: 5
I don't think too many people ever tried to refute that based on sheer net worth, the PS3 is a great value.

Value is not always defined as net worth to the consumer. While it is convenient to put a price tag on each part of the console and say "The Playstation 3 is worth $xxx much" consumers don't see it that way. Value is likened to the advantages gained due for the cost increase relative to the next cheapest option.

In this case, how much does the average consumer gain by choosing a PS3 over a XBOX 360? While I can not define this as a strict number, I would wager that many do not see the $300-ish(rough comparison between the total value of manufacturing a 360 vs a PS3...) increase in value.

But, all this has been said before and I am just beating a dead horse. In the end, the consumers will decide which console is truely the better value.




RE: Value
By dreddly on 11/17/2006 3:23:24 AM , Rating: 3
Yeah, if you look at the length of the product cycle of the PS2, I think that the PS3 will be the better value in the long run.

Given the GB size of HD movies, and the relatively small space of a DVD, I think 5 years from the need for a HD drive will be inevitable.

Microsoft has a shorter product cycle (I still like my original xbox) and is first to market, but HD output, easily expandable storage and HD drive are better long term strategies.

I am sure sony would have been happier if Blueray or HDDVD had better market penetration at this point - to make the value evident - but in the long run (if they can afford the losses) I think the PS3 is a better value.


RE: Value
By akugami on 11/17/2006 4:53:49 PM , Rating: 3
I don't disagree that net value wise, considering the cost of the components, the PS3 is great. However, that still doesn't mean it isn't overpriced as a game console. Which I feel is what will sink the PS3 ship in the long haul.

If you're looking at it from a HD movie perspective, Blu-Ray is not the guaranteed winner and given the Sony track record on introducing new formats, I wouldn't bet on Blu-Ray myself. And I'm someone who thinks that Blu-Ray is the superior format compared to HD-DVD. I don't think HD movies will truly take off until at least 30% of the market owns HDTV's and that's still a few years off. So we might not know how this battle wins out for years to come. But again, it's no guarantee that Blu-Ray will win.

And Sony would hate it if HD-DVD wins because that is a whole lot of money they would lose out on in licensing fees from players and blank as well as already pressed Blu-Ray discs. Think how many millions of players and hundreds of millions, if not billions, of discs are already out for CD's as well as DVD's. Don't think for a minute the DVD-R and DVD+R wars were mainly a disagreement of differences in implementation. It was about money. HD-DVD and Blu-Ray never got along because of the same reason. The more tech you have tied up in the new format, the larger slice of the pie you get.

The original Xbox was by necessity a short lived product due to coming late to the party after both the Gamecube and PS2 was already out as well as Xbox losing money, and lots of it. Microsoft needed a new product with updated specs to bring a little more hype to their video game business and the time was right for them. If MS had released the Xbox 360 this holiday season I don't know that they'd sell as well as they have. The business side of things just made sense for them to release the 360 last year and them coming late to the party was the main reasons why the Xbox had such a short life cycle.

Believe it or not, the Sony "10 year life cycle" of the PS3 will be both likely correct and overrated. The NES had a 10 year life cycle as did the PS1 and likely the PS2, that doesn't mean that roughly 5-6 years after the original introduction of the consoles the console makers didn't introduce new consoles. Nintendo introduced the SNES about 6 years after the NES and I think it was close to 10 years after the introduction of the NES that it was finally retired. Likewise the PS1 had close to a 10 year life cycle even though the PS2 was introduced about 5-6 years after it. The PS2 will likely have a 10 year life cycle even though the PS3 has been introduced. So you can expect PS2 consoles to be sold and manufactured for another 3 years.

Sony's problem is that while the PS3 is very powerful, it will need to introduce another console in 5-6 years time to compete with MS and Nintendo's new consoles. Think of it this way, look at PC graphics cards. Look how much the power of the latest GPU's have advanced in 5 years time. Go back 5 years and go back 10 years and you will see huge differences in quality. So while Sony might be still selling PS3's in roughly 8-10 years time, it will need to introduce new consoles in about 5-6 years time or lose out to Nintendo and MS's new consoles in both hype and features. And don't kid yourself, Nintendo must have a new console out at that time even if all it is is Wii 2.0 and MS will need something a little more powerful to combat the little bit of extra power that developers will be able to squeeze out of the PS3 at that time due to familiarity.

Basically it's a fanboy dream if you think your PS3 will still be cutting edge and not need to buy another console for the latest and greatest in gaming.


money lost
By Spivonious on 11/17/2006 10:52:18 AM , Rating: 2
So Sony sells 500,000 units and loses $126 million? Great business plan Sony.




RE: money lost
By Spivonious on 11/17/2006 10:53:15 AM , Rating: 2
Just to clarify I used this equation:

money lost = (.8 * 240 + .2 * 300) * 500,000


RE: money lost
By stromgald on 11/17/2006 11:37:52 AM , Rating: 2
The 'money lost per console' is dependent on the number of consoles sold. Currently, Sony is losing money on each console because the people doing the math are factoring in R&D costs on each console. As more are sold, that cost becomes less and less of a factor for each unit, and eventually they will break even and start making money on each unit.

The main difference between Sony and Microsoft is that Sony is putting themselves in a bigger hole (~$240-300 vs. $153), so they need to sell more before they break even. They're depending more on their sales volume to turn profit than Microsoft is. IMO, thats pretty risky especially if you're arriving on the market a full year after your competition, but I guess Sony is confident their product will sell quickly.


Title
By Lord Evermore on 11/17/2006 3:21:00 AM , Rating: 3
"Sony to Lose Roughly $240, $300 Respectively on PS3"

You have to specify to what the two numbers are respective in order for the statement to make sense, or actually tell the reader anything of use.




RE: Title
By Spivonious on 11/17/2006 10:44:16 AM , Rating: 2
Lord Evermore FTW


To keep or not to keep?
By encryptkeeper on 11/17/2006 9:46:09 AM , Rating: 2
Read the articles on other sites as well as this one. As many as eight out of every ten people said they didn't want to keep the console. This all started with the 360 from last year. Did this happen with the PS2 when it came out?




RE: To keep or not to keep?
By Meph39 on 11/17/2006 11:26:50 AM , Rating: 2
Yeah, but not it wasn't near as obscene. I remember looking on Ebay, right after I got my PS2 at launch, and seeing them selling for something like $1000.


sony
By AppaYipYip on 11/17/2006 3:42:36 PM , Rating: 3
The 8800GTX and DX10 have already made this pathetic PS3 obsolete.

nuff said.




These numbers are wrong...
By Lonyo on 11/17/2006 5:06:02 PM , Rating: 3
These numbers are hilariously wrong.
They expect us to believe Sony is paying $43 for a 20GB laptop hard drive from Seagate?
A 20GB laptop drive from Samsung costs us people $29.99 from Newegg. That's a retail price. Sony is not going to be paying $43, especially given that IIRC it's just a standard laptop drive they use (since the end user can put in their own drive to replace it AFAIK).
If they are paying $43, then they are stupid.


To put it bluntly, I think these figures are a complete load of tosh. I would probably pull more accurate numbers from my ass.




Whats NEXT
By crystal clear on 11/18/2006 1:52:45 AM , Rating: 3
RE: Get yourself a vacation
By crystal clear on 11/16/06, Rating: 2
By crystal clear on 11/16/2006 10:19:25 AM , Rating: 2

"PlayStation 3 Offers Supercomputer Performance at PC Pricing, iSuppli’s Teardown Analysis Reveals"

http://www.isuppli.com/news/default.asp?id=6919

PS3 as a product is great-Sony as a company is just the opposite.

Unquote-
Thanks for picking up this link,to give this subject more
exposure.

Now here is ONE MORE for you-

Gartner: Crims will use PS3 to crack crypto

http://searchsecurity.techtarget.com.au/topics/art...

Unquote-

Majority of the poster do not have any idea of How Powerful this machine is-neither they have used it it,to realize what
this machine is capable of.
They are all in a big Hurry to post their comments.
GET SOME Experience on the PS3-then comment.




Just curious...
By BBQmyNUTZ on 11/17/2006 9:30:37 AM , Rating: 2
Is this the beginning of the 360 fanboy movement known as "If you want to hurt Sony, buy a PS3 so they'll lose money"? Time will tell. :ph33r:




maybe ill get a ps3 after all
By thejez on 11/17/2006 10:40:37 AM , Rating: 2
"Sony will lose $307 for every 20GB PS3 it sells"

that might be the only reason id ever buy one of these.. ROFL




For Brandon Hill
By crystal clear on 11/18/06, Rating: 0
DailyTech: "Ken Kutaragi was right" (PS3) "too cheap"
By somegeek on 11/17/06, Rating: -1
"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive

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