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Sony's Ken Kutaragi
$499 and $599 is "probably too cheap"

Adding more fuel to the PlayStation 3 fire, Sony Computer Entertainment Inc. (SCEI) president Ken Kutaragi is not only defending the PS3's high price of entry, but he says that it's not expensive enough. The PS3 is priced at $499 for the basic version with a 20GB hard drive, no HDMI output, no WiFi and no media reader. The $599 version comes with a 60GB hard drive and all of the trimmings.

Kutaragi goes on to explain his position concerning the price of the PS3, "For instance, is it not nonsense to compare the charge for dinner at the company cafeteria with dinner at a fine restaurant? It's a question of what you can do with that game machine. If you can have an amazing experience, we believe price is not a problem."

If $499 and $599 is considered to be "too cheap," then it would be difficult to detemine what seems reasonable as XBOX 360 costs under $300 and the Nintendo Wii may retail for a mere $200.


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Cheeky bugger
By Cunthor01 on 5/13/06, Rating: 0
RE: Cheeky bugger
By ChristopherO on 5/13/06, Rating: 0
RE: Cheeky bugger
By ChristopherO on 5/13/06, Rating: 0
RE: Cheeky bugger
By sxr7171 on 5/13/2006 1:16:30 PM , Rating: 1
Those people would do well to program nice creative games for the console that basically everyone wants to buy this time around for its low price and unique experience.

To me this is make or break for the console industry.

This is when we tell them whether we are stupid pawns who will pay anything for the same old shit rehashed again and again. Or whether are smart enough to want something that excites us and shows us something we haven't seen before.

This Playstation mentality has resulted in a stagnation of real creativity and progress in console gaming since everyone wanted to compete with it by trying to beat it at it's own game but failed.

This time one console has gone back to its roots and has had the courage to break free and go back to what we love about console games. Hopefully this will change the course console gaming to the point that no company will take gamers for granted as they have for a decade.


RE: Cheeky bugger
By caboosemoose on 5/13/2006 6:24:12 AM , Rating: 2
I agree with most of your points except the cost of a high end video chip. High end video chips are huge (typicaly much larger transistor counts than CPUs for example) and made in relatively small numbers. Obviously official numbers aren't released, but I think even at $499 or $599 ATI and NVIDIA may be losing money on them. They're halo products that exist purely to make the rest of the range look good and may well be loss leaders.

What's more - even if they do make some money on them (perhaps towards the end of the life cycle) they sell in such pitifully small numbers compared with the mass market low end cards....


RE: Cheeky bugger
By xsilver on 5/13/2006 10:56:37 AM , Rating: 2
i tend to disagree
if you're reffering only to the chip maker and not the board makers

yes the chip is larger in die size but it is still pennies compared to the wafer size /cost ratio.
the reason high end cards are $499/599 now is that people are STUPID enough to pay that much -- economics 101 -- supply/demand...
you know demand is low -- so only produce low supply; jack up the prices to compensate for lack of volume and keep going until demand starts to drop -- which it hasnt so that's why the prices keep rising.

granted, high end cards still dont make as much profits as mainstream cards purely due to volume and economical die sizes.


RE: Cheeky bugger
By ChristopherO on 5/13/2006 1:42:31 PM , Rating: 2
The chip for the Xbox 360 (which is strikingly similar to an X1900, but slightly more powerful due to the EDRAM and inclusion of memory controller and other chipset functions) costs (drum roll please) ~$141 (BOM tear-down estimates by iSupply).

Board manufacturing (and components of DRAM) are pretty much always cheaper than the chipset.

As a result, the manufacturing cost of a top end video card probably doesn't exceed the high $100s or at worst very low $200s. I can't be certain, but I'd be willing to bet a large lunch at a drive up window, that the newest and best video cards could be sold for $249 and still net the manufacturers a profit.


RE: Cheeky bugger
By ChristopherO on 5/13/2006 2:38:48 PM , Rating: 2
I forgot to say. They are not loss leaders. The profit margins are *huge*. Just read the annual statements from the respective companies. Both graphics companies freely admit a huge portion of their income comes from the limited number of high-end cards. The huge volume of low-end stuff doesn't equal the profit of the small number of high-end boards. I don't know if the price reflects a 100% markup, but they are making a killing.


RE: Cheeky bugger
By rocchioo on 5/13/2006 11:52:32 AM , Rating: 2
PS2 came out in 2000. DVD wasn't mainstream at that point. You have no idea what you are talking about.


RE: Cheeky bugger
By MrPickins on 5/13/2006 12:45:13 PM , Rating: 2
Good call.

IIRC when the PS2 came out, dvd players were still in the $250-300 range, and very few people I knew had them. Then came the Ps2 at a similar price point that not only played dvd's, but killer games too. Many pople I know (including myself) used the PS2 as their first dvd player.

Sure dvd playes had been around for years, but still they had little mainstream market penetration.


RE: Cheeky bugger
By ChristopherO on 5/13/06, Rating: 0
RE: Cheeky bugger
By sxr7171 on 5/13/2006 2:00:55 PM , Rating: 2
$999 if you ask me with the shortage they will have.


RE: Cheeky bugger
By sxr7171 on 5/13/2006 1:59:23 PM , Rating: 2
By the time PS2 shipped in any real quantities DVD players were $150-200 at the low end. So they were at least in the process of being assimilated. Here we an unknown quantity being pushed down people's throats.

DVD came out in 1997 and PS2 shipped in quantity in 2001. By that time DVD drives were a +80 option on computers.


RE: Cheeky bugger
By mxzrider2 on 5/14/2006 3:02:41 AM , Rating: 2
dvds were introduced in 94. but hte prices were in tha range in 2k


RE: Cheeky bugger
By ChristopherO on 5/14/2006 1:13:52 PM , Rating: 2
No they weren't. March of 1997 (November 96 in Japan). Toshiba released the first two players. They were the SD-2006 at $499 and SD-3006 at $799. The SD-2006 and 3006 were identical except the higher model added component out. Neither of the players included DTS or could do progressive output (480p). Those features came later.


RE: Cheeky bugger
By cbs9646 on 5/13/2006 1:55:33 AM , Rating: 2
I think you meant to say not expensive enough instead of "not cheap enough" Cunthor01.


True.
By Cunthor01 on 5/13/2006 2:42:31 AM , Rating: 2
My bad there.


RE: Cheeky bugger
By Kamus on 5/13/06, Rating: 0
RE: Cheeky bugger
By Burning Bridges on 5/13/2006 6:51:31 AM , Rating: 2
I see you are from the future and have played MGS4?

Cool, so, when can I buy flux capacitors from my local supermarket?

Seriously, it could be terrible, and if you are willing to spend that much money to just play one game, then you don't have any real idea of the amount of money you are spending.


RE: Cheeky bugger
By Spoonbender on 5/13/2006 6:53:01 AM , Rating: 2
So, one game for $600? It had better be the game to end all games. Are you going to play it every day, for the rest of your life?

And no, I don't think it's *that* amazing. Sure, it's a nice franchise, and the gameplay isn't *bad*, but I wouldn't say it's as unique as you make it. I'd just as soon play Halo 3 or a new Mario game.


RE: Cheeky bugger
By Lakku on 5/13/2006 11:53:35 AM , Rating: 2
Yeah, it's called Splinter Cell Double Agent. It should be as pretty or close enough to the movies (no gameplay has been shown yet) of MGS4 to keep it competative in that aspect (graphics). But lets face it, MGS is lame unless you like carrying unlimited weapons and having an anime experience, of which there are better games for doing that. It has nothing on Splinter Cell unless you don't like the real world or the idea of conspiracies or things that, while very remote, COULD actually happen. Yeah, so, in the end, Splinter Cell is a much better game experience then MGS, SC actually has good voice acting, and Sam Fisher could destory snake