Merrill Lynch's Next-Gen console prediction

[expletive]

Except that it is not a recommendation for its investors:




It is simply an industry analysis commissioned by (in my opinion) an Xbox 360 hardware partner. Its timing is remarkable and content entirely subjective. That is not to say there is no fact in any of the information presented. In fact I agree with the general assessment that the Xbox 360 will be cheaper to manufacture and that Sony's financial state may be an issue for them. The problem is these factors have been spun in this report to an amazing degree.

That doesnt change the fact that they cannot pull data out of thin air. The items you quote are standard disclaimers on everything they (and every other financial firm) publish. They are not peculiar to this specific report and dont hold any more or less weight as it relates to the material contained in it.

Also, conflict of interest does not mean 'license to make this up'. I dont think anyone in here was using MLs opinion as to who would 'win' to make their argument. The discussion revolved around the analysis on the costs of each console and the potential for the 360 to be much cheaper come late 2006 and what WE thought that would mean. This information still needs to be based on facts that they have access to. I dont remember every post in this thread but i never said ML would be right or wrong, just that this report does provide insights on strategies and console costs. From there i made my own suppositions on what it could mean in the larger picture if things went this way.

[expletive]

The article seems to shamelessly only focus on MS's advantages completely ignoring Sony's advantages. Whether he was bought out or not, the article is shamelessly one-sided, whether you agree or not with it.
Unless you think that Sony has no advantages over MS (which in itself is an outrageous statement), the article is over the top with its Sony iz teh doomed scenarios.

This is a report from a financial firm, they focus on things like costs, selling price, time to market, etc. It shouldnt be a surprise as every financial analysis we've read on the consoles talks about the exact same things over and over.

If youre looking for a report that says "if teh RSX has 40 shader pip3s the 360 is in deep shit" from a major financial institution youre going ot be disappointed. The cell doesnt mean anything to them, BR is locked in a format war so that holds much less wiehgt as well.

For reports that focus on cost and pricing, we've all pretty much known for awhile now that MS has an advantage, and they SHOULD becuase of their hardware decisions, cost is integral to their strategy. So im confused as to why, when a financial firm doing a financial analysis, gives MS the edge, its shamelss and biased.

[london-boy]

So im confused as to why, when a financial firm doing a financial analysis, give MS the edge, its shamelss and biased.
In the end MS supporters will always agree with such articles regardless of the validity of them.
The article is not shameless or biased because it happens to support MS and you happen to agree with them and it makes you feel better to think that Sony iz teh doomed. The article is shamed and biased because it fails to address the advantages Sony has, which you have completely ignored (unless you think that technology is the only advantage Sony has, which in itself is ridiculous).

[mckmas8808]

I love how when someone disagrees with something, there must be a conspiracy, sight-unseen.

Please. The report is not outrageous as I've outlined numerous times. You disagree with it. This obviously must mean the authors are hacks who were bought off. :roll:

.Sis

who said they were brought off? You quoted me, but I never said anything like that.

[mckmas8808]

In the end MS supporters will always agree with such articles regardless of the validity of them.
The article is not shameless or biased because it happens to support MS and you happen to agree with them and it makes you feel better to think that Sony iz teh doomed. The article is shamed and biased because it fails to address the advantages Sony has, which you have completely ignored (unless you think that technology is the only advantage Sony has, which in itself is ridiculous).

Yes thank god for l-b. *Bright white light shines from above with angels singing* This has been my ONLY point within this whole thread. This is the only thing that I've been trying to display myself. The Bolded and underlined sentence is the most important part of the quote. But for some reason people have to say that I am teh bias.:???:

[Mmmkay]

But at the very least, could not Sony or one of their vendors sue for defamation or unfair business practice or what not if ML reports false numbers? If the numbers are that far off, and if it negatively impacts their business on a partner level and they can prove ML was just making the numbers up, Sony or the vendors have a case, despite the disclaimer. Again, as a public entity, they are allowed to be wrong in predictions, but they can't just knowingly issue false statements.

They are still in the end predictions based on the information at hand, there's no ground for defamation. This report seems to be a private analysis which was probably not meant for us or even the media. If you haven't noticed yet, this report was leaked onto a forum and has only spread onto blogs and indie news sites which deal with user submitted info. Fairly effective marketing if you ask me.

That doesnt change the fact that they cannot pull data out of thin air. The items you quote are standard disclaimers on everything they (and every other financial firm) publish. They are not peculiar to this specific report and dont hold any more or less weight as it relates to the material contained in it.

Estimates and predictions are not facts. I said that it is quite likely their source information was based in fact but their subjectivity and spin (in my opinion) damages their credibility.

I was replying to someone who put this report in the same league one which gives recommendations to their investors. This report clearly does not and offers disclaimers to that degree. Would those disclaimers be on a report which does give recommendations?

What's the adage? If it's too good to be true, it probably is.

[Bobbler]

Expletive: It seems to me you are overestimating ML's actual liability (in this type of document) -- they could just as easily fabricate numbers as I could (example: saying Xenon would cost 200 dollars to fab because I think IBM will charge a hefty fee to MS to do it). They base things on facts, only when facts are present -- otherwise those firms make guesses based on what they see, and what they see isn't always the entire picture or a clear picture.

In this type of document, they are no more liable to produce 100% facts than a forum poster on OA (only ML has a reputation that they care about, OA posters have none -- zing!) -- mainly because they don't have access to 100% facts, and they are only "liable" to write stuff which is "to the best of their knowledge" the truth. They full out say that that document should not be used as in depth analysis or stock decisions. There is nothing to sue about in the document, even if they listed the prices as $1000 for Cell and Xenon. It isn't defamation or libel. That's like me trying to sue someone because someone was writing that I paid 100,000 to build my house when I only spent 50,000 -- I'd have to somehow prove that damage was done to me based solely on the fact that the price of my house was higher than I actually paid.

I personally don't subscribe to the theory that this was paid for by MS and made to put doubt in the minds of everyone about Sony, if it was, its a silly way to do it -- I do however think the numbers were based on little more than guesses based on non technical knowledge of fabrication process (the 160 dollar fab cost for Cell vs. 100 for RSX should tell you that -- and the ability to use the "bad" Cells).

[expletive]

In the end MS supporters will always agree with such articles regardless of the validity of them.
The article is not shameless or biased because it happens to support MS and you happen to agree with them and it makes you feel better to think that Sony iz teh doomed. The article is shamed and biased because it fails to address the advantages Sony has, which you have completely ignored (unless you think that technology is the only advantage Sony has, which in itself is ridiculous).

I'm not sure exactly how to take this response becuase it really doesnt address any of my points and seems to just spread 'youre a fanboi' out over 100 words. But let me stick to the facts.

1. I never said ML was right or agreed with their analysis on the console war who would sell more etc.
2. I explained why financial firms dont care about the techonology advantges (BR, CELL). IF you look at any of the other reports form financial firms they focus on the exact same things:when its released, what it will cost, how much theyll lose on each unit.
3. Is whats in here a surprise? MS decided not to include HD-DVD and HDMI or wireless, so they COULD compete on price because they HAVE to. So when a report comes out that just reiterates waht we've all known about costs and the MS price strategy, its a problem for the Sony contingent.

There are plenty of reports that focus on technology advantages but they arent going to eb the ones from financial institutions. Go read any of these reports from Merrill, Morgan, PIper Jaffray, for the most part they go through their financial 'checklist' and thats it.

[Alpha_Spartan]

In the end MS supporters will always agree with such articles regardless of the validity of them.
The article is not shameless or biased because it happens to support MS and you happen to agree with them and it makes you feel better to think that Sony iz teh doomed. The article is shamed and biased because it fails to address the advantages Sony has, which you have completely ignored (unless you think that technology is the only advantage Sony has, which in itself is ridiculous).
This is a FINANCIAL report from a FINANCIAL firm. Did you ever entertain the idea that FINANCIALLY MS has the advantage over Sony? Maybe outside of this report's domain Sony has a few advantages, but ML isn't going to report them because this doesn't matter. What you fail to realize that this isn't an all-encompassing report, but a small part of a larger picture.

In the big picture, Sony has advantages and MS has advantages. This ML report just focus on the financial aspect, which they are well-qualified to do, and MS just happens to have the financial advantage.

If you want a report on fanbase, the potential of BD, or game lineups, look elsewhere. Merrill Lynch doesn't give a shit.

[Shifty Geezer]

I dont think anyone in here was using MLs opinion as to who would 'win' to make their argument.:oops: I did. I was going to get PS3, but now thanks to ML I'm not going to save up for a machine that'll from a company that'll be bust in a couple of years. I'm waiting 'til Christmas next year when I'll get an XB360 for £150 including HDD, and not worry about exclusive games which I want to play on PS3 because this report didn't mention them so I guess they're not a factor anyone wants to consider.

Actually I'm lying. The report just said 'if this, and that, and we're right with these numbers we guessed at, then this might happen, which might be good for MS.' No different a 4 or 5 threads a month we get started here with people saying IF. Can't see the point of this report myself. Why did they bother to right it? Who's the audience and why'd they want to read it? I'm sure anyone can write speculative articles taking a number of IFs and presumptions to show how some company or other could out-do another. Guess they're just in a slow period and someone knocked it up in an afternoon when they had nothing better to do.

[g35er]

In the end MS supporters will always agree with such articles regardless of the validity of them.
The article is not shameless or biased because it happens to support MS and you happen to agree with them and it makes you feel better to think that Sony iz teh doomed. The article is shamed and biased because it fails to address the advantages Sony has, which you have completely ignored (unless you think that technology is the only advantage Sony has, which in itself is ridiculous).

The article does seem biased. As mmmkay said, ML stated themselves that they could be biased.


Originally Posted by Merrill Lynch
Merrill Lynch does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.

But for all the reasons people have stated in this thread, they can't just make up the numbers. They have to have justification for the cost numbers. You have to seperate data (the cost estimates) from opinion (interpretation of the numbers). Most of the discussion here is on the data, not on their opinion. Now, you can say they used "special math" to bias the numbers in favor of one comapny, but without knowing their sources, it's just speculation. We only know that they have public liabilities to get their data right or at least close.

[expletive]

They are still in the end predictions based on the information at hand, there's no ground for defamation. This report seems to be a private analysis which was probably not meant for us or even the media. If you haven't noticed yet, this report was leaked onto a forum and has only spread onto blogs and indie news sites which deal with user submitted info. Fairly effective marketing if you ask me.



Estimates and predictions are not facts. I said that it is quite likely their source information was based in fact but their subjectivity and spin (in my opinion) damages their credibility.

I was replying to someone who put this report in the same league one which gives recommendations to their investors. This report clearly does not and offers disclaimers to that degree. Would those disclaimers be on a report which does give recommendations?

What's the adage? If it's too good to be true, it probably is.

I didnt see the part where you said these are likely based on facts so apologies for that. However, when a company says theyve seen the BOMs and are using them to form opinions, I have to believe theyve seen both BOMs in a state where they can provide analysis. If they were to turn around and say 'we never really saw any BOMs' then i'll tkae my medicine and be the most surprised guy in the room.

[expletive]

:oops: I did. I was going to get PS3, but now thanks to ML I'm not going to save up for a machine that'll from a company that'll be bust in a couple of years. I'm waiting 'til Christmas next year when I'll get an XB360 for £150 including HDD, and not worry about exclusive games which I want to play on PS3 because this report didn't mention them so I guess they're not a factor anyone wants to consider.

Actually I'm lying. The report just said 'if this, and that, and we're right with these numbers we guessed at, then this might happen, which might be good for MS.' No different a 4 or 5 threads a month we get started here with people saying IF. Can't see the point of this report myself. Why did they bother to right it? Who's the audience and why'd they want to read it? I'm sure anyone can write speculative articles taking a number of IFs and presumptions to show how some company or other could out-do another. Guess they're just in a slow period and someone knocked it up in an afternoon when they had nothing better to do.

Cause thats what these firms do. They either get paid for an analysis or they just do them in the hopes that they are right enough so that they become the wall street authority on this stuff. I worked for one of these firms during the internet boom and we had an analyst on staff who was known as the master of technology IPOs, what they would be worth, who should buy, etc. She had a nickname and was renknown throughout. Thats the kind of thing these firms love, hacing the 'rainmakers' on their staff so they get notoriety and ultimately, rich people's money.

[Bobbler]

I didnt see the part where you said these are likely based on facts so apologies for that. However, when a company says theyve seen the BOMs and are using them to form opinions, I have to believe theyve seen both BOMs in a state where they can provide analysis. If they were to turn around and say 'we never really saw any BOMs' then i'll tkae my medicine and be the most surprised guy in the room.

BOMs might not always have costs associated -- they are mostly used for knowing what actually needs to go into the product. You often use a BOM to find out costs (because you know exactly what and how many), but a BOM itself doesn't necessarily have to have a cost of each part listed. They might have seen a BOM, but I'd bet my left nut that they didn't see a BOM sheet with costs on it (at least not for the big things, like Cell, RSX, Xenos, Xenon, BR, etc) or any other equivalent sheet like it.

[avaya]

A PS3 priced at total average cost is unrealistic IMO. It’s assuming they abandon the price equivalency to marginal cost less a subsidy, which has been the normal business model for all major players in the console market for a very long time.

This set of researchers at Merrill (Osha, Rangan, Ho & Post), not Merrill itself, are assuming that Sony will adopt a different business model based on comments made by Stringer:

CEO Howard Stringer has made some public commitments regarding the target level of profitability for the March 2007 fiscal year

OK fair enough, that’s for the whole Sony group I would imagine….

More than 75% of Sony’s revenues come from the CE division. The marginal effect of what SCEI do in relation to the rest of the Sony group is not going to be overly significant in that light. Proposing a complete change of a successful business model for SCEI based on those comments from Stringer is stretching it – indeed a worst case scenario.

[Mmmkay]

However, when a company says theyve seen the BOMs and are using them to form opinions, I have to believe theyve seen both BOMs in a state where they can provide analysis.

Err, they estimated all of the BoM calculations themselves.

Just for perspective, the source who leaked the Merrill Lynch article also put up one by citigroup. This is their cost analysis:
http://webpages.charter.net/spartan85/Next%20gen%20consoles_CITI.pdf
http://img72.imageshack.us/img72/8697/citigroup6rk.th.gif (http://img72.imageshack.us/my.php?image=citigroup6rk.gif)

[edit]Ignore that last sentence. A brainfart just occured.

[Shifty Geezer]

Holy Cow! They've got Cells $188 a piece beginning of next year when these are going into the first PS3s. Someone ought to ring KK up and tell him he can get them cheaper if they bulk buy OEM, instead of buying over-the-counter chips one at a time in pretty packaging.

[mckmas8808]

More than 75% of Sony’s revenues come from the CE division. The marginal effect of what SCEI do in relation to the rest of the Sony group is not going to be overly significant in that light. Proposing a complete change of a successful business model for SCEI based on those comments from Stringer is stretching it – indeed a worst case scenario.

Great point and is something that I was trying to figure out why Merrill didn't take that into affect. I swear if some of these guys here were to talk through their NDAs were could get a close estimate too. With all the information we get here it shouldn't be that hard. As a matter a fact the new thread that one posted with the charts is also very help full in estimating a cost.

[mckmas8808]

Holy Cow! They've got Cells $188 a piece beginning of next year when these are going into the first PS3s. Someone ought to ring KK up and tell him he can get them cheaper if they bulk buy OEM, instead of buying over-the-counter chips one at a time in pretty packaging.

That's a crying shame. They have the PS3's total cost after everything at $658.:shock:

[expletive]

Holy Cow! They've got Cells $188 a piece beginning of next year when these are going into the first PS3s. Someone ought to ring KK up and tell him he can get them cheaper if they bulk buy OEM, instead of buying over-the-counter chips one at a time in pretty packaging.

Maybe that price includes a retail heat-sink and fan. :)

[Carl B]

Err, they estimated all of the BoM calculations themselves.

Just for perspective, the source who leaked the Merrill Lynch article also put up one by citigroup. This is their cost analysis:
http://webpages.charter.net/spartan85/Next%20gen%20consoles_CITI.pdf
http://img72.imageshack.us/img72/8697/citigroup6rk.th.gif (http://img72.imageshack.us/my.php?image=citigroup6rk.gif)




Crack addicts, all of them. I don't even know what I'm looking at now. 'R&D and other overhead,' isn't that something that should be accounted for in the division financials, rather than a console BOM? And Cell is *still* appearing as more expensive than RSX there, throughout the life of the console. It defies all reason. For god's sake RSX will be the larger of the two!

At least it helps put down the notion of a solid BOM in the Merrill case, since they're both so wildly divergent.

[Dave Baumann]

At the moment the two parts are fabbed at different companies with different expertise. When it becomes integrated who'd do the fabrication? Isn't it TMSC and NEC? Are TMSC okay with eDRAM? If they are, why are NEC given the job of the eDRAM part? Or are there moves to advance the TMSC lines to support eDRAM?

Well, the other question is - why didn't NEC get the logic portion? ;)

The current solution is probably just representative of where they felt th fabs were with each of the solutions given the timescales they were shooting for. If I were to take a guess then I'd say if/when it does happen TSMC will get the final design; if you take a look around the TSMC site you'll see that they have solutions for eDRAM on each of their major nodes, with 65nm planned as well.

[Carl B]

Well, the other question is - why didn't NEC get the logic portion? ;)


Well I think that's an easy one to answer though; NEC fabbing = $$$ (comparatively)

They got the portion of the business that MS had to send there.

[Phil]

In the big picture, Sony has advantages and MS has advantages. This ML report just focus on the financial aspect, which they are well-qualified to do, and MS just happens to have the financial advantage.

I thought we've already established that they stuffed up their focus - the financial aspect - as seen by them using ludicrous numbers to form their "financial analysis".

How much is such a financial analysis worth, if they fail to look at the bigger picture (technology, the fabbing process, CELL compromising of redundant structures etc) that would change the result of the financial analysis greatly?

In other words, based on the fact that CELL, although larger in die-size, has the advantage of it being used even with defects to a certain degree and the point that defective CELL chips can be used for other products, I for one would be carefull to weigh CELL to be more expensive than Xenon. Considering that, why even take claims of $$$ for chips that aren't taking these factors into account even serious? Certainly doesn't sound "well qualified" if the average B3d member can come up with better estimates based on these few (well known) established facts...

[Deepak]

This story is on Yahoo now.....

http://news.yahoo.com/s/mc/20051103/tc_mc/merrilllynchuserslikelytopreferxbox360overps3

[Powderkeg]

How much is such a financial analysis worth, if they fail to look at the bigger picture (technology, the fabbing process, CELL compromising of redundant structures etc) that would change the result of the financial analysis greatly?

What makes you so certain that they didn't?

[Carl B]

This story is on Yahoo now.....

http://news.yahoo.com/s/mc/20051103/tc_mc/merrilllynchuserslikelytopreferxbox360overps3


Well of course, it was only a matter of time anyway. Though didn't think it'd make it to the 'Yahoo' level so fast.

[Carl B]

What makes you so certain that they didn't?

Well it would cost less than RSX if they had, that's for sure.

[avaya]

'R&D and other overhead,' isn't that something that should be accounted for in the division financials, rather than a console BOM? And Cell is *still* appearing as more expensive than RSX there, throughout the life of the console. It defies all reason. For god's sake RSX will be the larger of the two!

At least it helps put down the notion of a solid BOM in the Merrill case, since they're both so wildly divergent.

They think it will be smaller than Cell...

As with the Cell, we understand that the RSX will be initially manufactured using a 90nm design rule, with subsequent migration to 65nm. We estimate chip size at around 210mm2–240mm^2.

Cell....

First, the PS3’s Cell CPU is made from 12-inch wafers and uses 90nm processes, and we think initial production phases will entail considerable volumes of dummy wafers. Next, we assume the effective usable area per wafer at 57,000mm2 having taken edge exclusion (the narrow band on the outside of a wafer cannot be etched with a circuit pattern) into consideration.

As we assume the Cell chip size at 235mm2, we calculate that around 243 chips can be derived from each wafer. While yields need to be additionally considered here, we forecast initial phase yields at around 30% as logic yields are typically low when lines are newly started up. We thus take 30% of an assumed 243 chips on a front-end process basis in arriving at an estimate of around 73 good chips.

The back-end process comes next, and we forecast yields of around 75% during packaging and testing processes. We assume the number of chips derived will thus further decline from the 73 good chips yielded from front-end processes, ultimately amounting to 55 good chips.

We calculate the final cost per chip to be $329 after aggregating processing costs, packaging costs, and testing costs, and dividing this total by 55, the number of good chips.

EDIT:

NikkoCitigroup are saying XeCPU won't be using SOI. This is fatcually wrong, they say the use of SOI negatively contributes to Cell's defect rate.

[Carl B]

They think it will be smaller than Cell...

Right... but why would RSX on the same process with roughly ~70 million more transistors than Cell actually be smaller? And going further, with their yield estimates they're completely ignoring the fact that die defects to a certain extent can be tolerated on Cell, whereas their yield estimate numbers seem to reflect the percentage of perfect dies, as would traditionally be the case.

[avaya]

Right... but why would RSX on the same process with roughly ~70 million more transistors than Cell actually be smaller? And going further, with their yield estimates they're completely ignoring the fact that die defects to a certain extent can be tolerated on Cell, whereas their numbers seem to reflect perfect dies.

I mean - don't those reasons make sense to you?

I'm agreeing with you, just pointing out their reasons dude.

[Carl B]

I'm agreeing with you, just pointing out their reasons dude.

Sorry sorry. I just misunderstood the context of the evidence you presented I guess. My bad on the misunderstanding! :oops:

Fixed in post.

[Sis]

The article seems to shamelessly only focus on MS's advantages completely ignoring Sony's advantages. Whether he was bought out or not, the article is shamelessly one-sided, whether you agree or not with it.
Unless you think that Sony has no advantages over MS (which in itself is an outrageous statement), the article is over the top with its Sony iz teh doomed scenarios.The article focused on the cost advantages. I take it you disagree with the cost analysis and expect the PS3 to have a the advantage?

.Sis

Edit:

In the end MS supporters will always agree with such articles regardless of the validity of them.Before you implicate everyone who disagrees with your point as an "f-boy", I would suggest taking a more respectful read of the thread. The pros and cons of the report have been thoroughly laid out to which you've addressed none.

[Shifty Geezer]

The back-end process comes next, and we forecast yields of around 75% during packaging and testing processes. We assume the number of chips derived will thus further decline from the 73 good chips yielded from front-end processes, ultimately amounting to 55 good chips. 30% yields? Isn't that amazingly crap? Does this include the redundancy consideration? Makes sense that Sony would take the redundancy hit if yields are as bad as 30% for error free, but that should mean the actual useable yields are far higher. 70% perhaps? I've no idea what defect rates ar so I won't even hazard a guess (which I've just done. Umm...ignore that 70% figure everyone!)

Still looking at >$100 per chip. That's terrible. Still hasn't DaveB said price are like that for large GPUs? Maybe that actually is the cost :shock:

[Mintmaster]

Right... but why would RSX on the same process with roughly ~70 million more transistors than Cell actually be smaller?
Cell runs at 6 times the clockspeed, buddy. You have to worry about the EMF produced and crosstalk. The transistors are designed to switch at a higher speed in Cell and the wires need more room. Another factor is probably that CPU's can't have any error show up, but graphics are a little more tolerant. If every billionth pixel has something wrong, no big deal. If every billionth instruction ran incorrectly, the CPU would be unusable.

e.g:
FX-51 is 105M transistors and 193 mm2 on 130 nm
NV35 is 130M transistors and ~195 mm2 on 130 nm ==> 24% more transistors.
R300 is 107M transistors and ~205 mm2 on 150 nm ==> same density as FX, but with 30% larger transistors/wires.

And the FX-51 isn't designed for sky high clock speeds either.

I think it's quite easy for RSX and Cell to have similar die sizes.

[Shifty Geezer]

Well, the other question is - why didn't NEC get the logic portion? ;)

The current solution is probably just representative of where they felt th fabs were with each of the solutions given the timescales they were shooting for. If I were to take a guess then I'd say if/when it does happen TSMC will get the final design; if you take a look around the TSMC site you'll see that they have solutions for eDRAM on each of their major nodes, with 65nm planned as well.I assumed TSMC didn't have eDRAM capability, hence the need for NEC. If TSMC does have eDRAM, as they say they do, why the need for NEC? Unless they're buckets cheaper for eDRAM. In which case why aren't they cheaper for logic? Sounds to me like two printing presses, one that's cheaper to print pictures of animals and another cheaper to print pictures of people, and a brochure needing both being sent to both companies to print different parts of the same image. :???:

[Brimstone]

Right... but why would RSX on the same process with roughly ~70 million more transistors than Cell actually be smaller? And going further, with their yield estimates they're completely ignoring the fact that die defects to a certain extent can be tolerated on Cell, whereas their yield estimate numbers seem to reflect the percentage of perfect dies, as would traditionally be the case.

Well CELL has a lot of SRAM on it which will take up a lot of area I presume. SRAM isn't as dense as eDRAM like on the Gamecube Flipper GPU or Xenos GPU module.

[Carl B]

Cell runs at 6 times the clockspeed, buddy. You have to worry about the EMF produced and crosstalk. The transistors are designed to switch at a higher speed in Cell and the wires need more room. Another factor is probably that CPU's can't have any error show up, but graphics are a little more tolerant. If every billionth pixel has something wrong, no big deal. If every billionth instruction ran incorrectly, the CPU would be unusable.

e.g:
FX-51 is 105M transistors and 193 mm2 on 130 nm
NV35 is 130M transistors and ~195 mm2 on 130 nm ==> 24% more transistors.
R300 is 107M transistors and ~205 mm2 on 150 nm ==> same density as FX, but with 30% larger transistors/wires.

And the FX-51 isn't designed for sky high clock speeds either.

I think it's quite easy for RSX and Cell to have similar die sizes.


I think 3.2 GHz is going to be a walk inthe park for these chips - have you seen the schmoo for them? Certainly given a similar architecture on the PPE cores as XeCPU, there's no reason that one PPE and a bunch of SPE's shouldn't reach 3.2 GHz more readily than 3 PPE cores, each one with a chance of not being able to 'make it' at a certain voltage.

Also it's not a good comparison to use NV vs R vs AMD series chips; the architectures and the processes of different fab houses all play a role. NV suffering with a bad IBM process back in NV30 days is just one example of freak occurence and deviation from the norm.

But even with all of that aside - and I grant that the die sizes might be similar in size in the end due to different densities, certainly you understand where Cell with larger economies of scale and the ability to withstand defects should come in naturally lower in price to RSX, right? And to say nothing of the fact that on the same process, with ~70 million more transistors, and using the EE and GS as precedent with Sony, I fully expect RSX to be larger as well.

(Brimstone I agree with your points, but this post applies to you as well :) )

I mean c'mon, this most recent BOM has the Cell at over three times the cost of RSX in certain places. WTF?

[mckmas8808]

How much is such a financial analysis worth, if they fail to look at the bigger picture (technology, the fabbing process, CELL compromising of redundant structures etc) that would change the result of the financial analysis greatly?

In other words, based on the fact that CELL, although larger in die-size, has the advantage of it being used even with defects to a certain degree and the point that defective CELL chips can be used for other products, I for one would be carefull to weigh CELL to be more expensive than Xenon. Considering that, why even take claims of $$$ for chips that aren't taking these factors into account even serious? Certainly doesn't sound "well qualified" if the average B3d member can come up with better estimates based on these few (well known) established facts...

Hence my statement in the first post which I said...


I know everyday posters that can predict better than this.


Yep I got beat up for making that comment though.:roll: Well looks like I was right all along. With a few others too of course.

[Phil]

What makes you so certain that they didn't?

Because with data missing that only Sony has an inside on, no cost you ever attach to a unit will ever be taking the larger picture into consideration - and that's ultimately that CELL is designed to be used in multiple products, blu-ray's advantage extends well into Sony Group as a whole entity and beyond SCE and PS3 (which this analysis is solely looking at), own fabbing and manufacturing processes and their cost disadvantage/advantage that goes with it... in short, there are simply too many factors that are relevant that make it *impossible* for an outsider company to be calculating with a few $$$ here and a few $$$ there to form any kind of analysis on financial advantages.

In other words, what makes you certain that these analysts have an inside on all the costs & spending of Sony to calculate accurate prices of the multiple units within the PS3?

These numbers have absolutely no substance to them. The prices of these units could be in the first shipment at point x, at the next at point y which all extend into Sony's cost strategy as a whole.

[Brimstone]

I think 3.2 GHz is going to be a walk inthe park for these chips - have you seen the schmoo for them? Certainly given a similar architecture on the PPE cores as XeCPU, there's no reason that one PPE and a bunch of SPE's shouldn't reach 3.2 GHz more readily than 3 PPE cores, each one with a chance of not being able to 'make it' at a certain voltage.

Also it's not a good comparison to use NV vs R vs AMD series chips; the architectures and the processes of different fab houses all play a role. NV suffering with a bad IBM process back in NV30 days is just one example of freak occurence and deviation from the norm.

But even with all of that aside - and I grant that the die sizes might be similar in size in the end due to different densities, certainly you understand where Cell with larger economies of scale and the ability to withstand defects should come in naturally lower in price to RSX, right? And to say nothing of the fact that on the same process, with ~70 million more transistors, and using the EE and GS as precedent with Sony, I fully expect RSX to be larger as well.

(Brimstone I agree with your points, but this post applies to you as well :) )

I mean c'mon, this most recent BOM has the Cell at over three times the cost of RSX in certain places. WTF?

Also the Rambus XDR controller on the CPU is designed to handle a 2 PPE 16 SPE CELL CPU. This may take up more area than the RSX memory controller.

[jvd]

Because with data missing that only Sony has an inside on, no cost you ever attach to a unit will ever be taking the larger picture into consideration - and that's ultimately that CELL is designed to be used in multiple products, blu-ray's advantage extends well into Sony Group as a whole entity and beyond SCE and PS3 (which this analysis is solely looking at), own fabbing and manufacturing processes and their cost disadvantage/advantage that goes with it... in short, there are simply too many factors that are relevant that make it *impossible* for an outsider company to be calculating with a few $$$ here and a few $$$ there to form any kind of analysis on financial advantages.

In other words, what makes you certain that these analysts have an inside on all the costs & spending of Sony to calculate accurate prices of the multiple units within the PS3?

These numbers have absolutely no substance to them. The prices of these units could be in the first shipment at point x, at the next at point y which all extend into Sony's cost strategy as a whole.

This report was talking about the ps3 and its costs . For what it is talking about its extremely accurate . We also have another report from another company where prices mainly line up with each other and the end result is the xbox 360 being cheaper to make

[Powderkeg]

Because with data missing that only Sony has an inside on, no cost you ever attach to a unit will ever be taking the larger picture into consideration .


Why not?

While you might not have accurate figures certainly you can come up with reasonable estimates for them. It's not like Sony is the only company in the world that has these kinds of expenses, right? It is possible for them to take the larger picture into consideration by comparing that larger picture to similar pictures made by other companies.

Or can you think of some reason why a company that specializes in these types of analysis would be absolutely clueless to the big picture, and wouldn't have any comperable data from any other company on earth?

[Phil]

This report was talking about the ps3 and its costs . For what it is talking about its extremely accurate .

On what grounds do you find these numbers extremely accurate? How can you even say something like this based on absolutely nothing?

[Sis]

Because with data missing that only Sony has an inside on, no cost you ever attach to a unit will ever be taking the larger picture into consideration - and that's ultimately that CELL is designed to be used in multiple products, blu-ray's advantage extends well into Sony Group as a whole entity and beyond SCE and PS3 (which this analysis is solely looking at), own fabbing and manufacturing processes and their cost disadvantage/advantage that goes with it... in short, there are simply too many factors that are relevant that make it *impossible* for an outsider company to be calculating with a few $$$ here and a few $$$ there to form any kind of analysis on financial advantages.

In other words, what makes you certain that these analysts have an inside on all the costs & spending of Sony to calculate accurate prices of the multiple units within the PS3?

These numbers have absolutely no substance to them. The prices of these units could be in the first shipment at point x, at the next at point y which all extend into Sony's cost strategy as a whole.While I disagree that the analysts ignored something--they addressed the Cell and Blu-ray and fabbing in the document--I do think that its really unlikely that the analysts have any inside information, especially with regards to dollar figures. This would be a serious compromise to both MS and Sony's competetive advantage, and neither one seems likely to show their cards. The best any outsider can do is estimate (ie, guess), and these analysts are included.

.Sis

[mckmas8808]

Because with data missing that only Sony has an inside on, no cost you ever attach to a unit will ever be taking the larger picture into consideration - and that's ultimately that CELL is designed to be used in multiple products, blu-ray's advantage extends well into Sony Group as a whole entity and beyond SCE and PS3 (which this analysis is solely looking at), own fabbing and manufacturing processes and their cost disadvantage/advantage that goes with it... in short, there are simply too many factors that are relevant that make it *impossible* for an outsider company to be calculating with a few $$$ here and a few $$$ there to form any kind of analysis on financial advantages.

In other words, what makes you certain that these analysts have an inside on all the costs & spending of Sony to calculate accurate prices of the multiple units within the PS3?

These numbers have absolutely no substance to them. The prices of these units could be in the first shipment at point x, at the next at point y which all extend into Sony's cost strategy as a whole.

Phil you are 100% correct. Ken Kutaragi said this himself in an interview in May.


Question:
Though it must be difficult for you to tell the very price of PS3, will PS3 take the same depreciation model as the one of PS2? For instance PSP was cheaper than most expected.

Kutaragi: PSP was evaluated by many people as inexpensive, but still 24,900 Yen. Its cost model can have a feasible cash flow by the higher in-house development ratio and other factors.

The same thing can be said for PS3, but a far more number of PS3 will be sold if you compare it with PSP

Link http://www.beyond3d.com/forum/showthread.php?t=20062&highlight=Kutaragi+interview

Ken has already been through this talk. The man has said that the PS3 will be like the PSP model because Sony will have more feasible cash flow due to higher in-house development and other factors. And this is exactly what Phil and some others are saying in this thread right now. I wonder how ML is looking at this exact same issue? It doesn't look like they are putting in weight behind it.

[Carl B]

Also the Rambus XDR controller on the CPU is designed to handle a 2 PPE 16 SPE CELL CPU. This may take up more area than the RSX memory controller.

How much room though? Look - ok first do you think that Cell is going to be 3x the cost of RSX? Three times? No.

Secondly, here's the die size of Cell at 90nm: 221mm^2.

Here's the G70 at 110nm: 334mm^2.

Will the RSX, if really a modified G70, be so much smaller than 221mm^2 on 90nm going from 334mm^2 at 110nm? No. And I posit it will likely be larger, but that's neither here nor there. Let's just assume for the moment they're the same size. With the Cell able to take a hit to an SPE and still be useful in PS3 - indeed to take multiple SPE hits and still find use in other possible Sony devices - how in the world are they coming to a three times the cost of RSX estimate?

No, Cell should cost less, or be at least guesstimated at the same cost. Cell will be fabbed at OTSS, Nagasaki, and East Fishkil. RSX only at the former two.

The estimate given in that BOM is madness.

[Sis]

This report was talking about the ps3 and its costs . For what it is talking about its extremely accurate . We also have another report from another company where prices mainly line up with each other and the end result is the xbox 360 being cheaper to makeThis to me is the key take away and I've yet to see anyone disagree with it. Instead we attack the credibility of the analysts, the posters agreeing with the analysts, or the exact dollar figure of the analysts.

.Sis

[Bobbler]

This to me is the key take away and I've yet to see anyone disagree with it. Instead we attack the credibility of the analysts, the posters agreeing with the analysts, or the exact dollar figure of the analysts.

.Sis

What else are people supposed to do? I don't think anyone disagrees with the overall sentiment of the article, but the fine details are dubious at best. You know as well as I do it's the details that B3D likes to pick at. It seems much of this thread has been pretty valid conversation talking about what the actual costs could be and where they could go wrong -- most of the thread has been well manored and doesn't smell of damage control as much as it does trying to get the truth of the matter (because it happens to be an interesting topic).

I don't see the problem in agreeing with the sentiment but questioning the details.

[Phil]

Why not?

While you might not have accurate figures certainly you can come up with reasonable estimates for them. It's not like Sony is the only company in the world that has these kinds of expenses, right? It is possible for them to take the larger picture into consideration by comparing that larger picture to similar pictures made by other companies.

Or can you think of some reason why a company that specializes in these types of analysis would be absolutely clueless to the big picture, and wouldn't have any comperable data from any other company on earth?

Alright powderkeg, then please tell me which other company has a PS2 on the market, a PSP, a own fab it's devoting to these two products and using them at the same time to gain in experience and infrastructure advantage to shift significant resources onto a PlayStation successor, which they are again, utilizing different factors to their advantage as redundancy within a chip to improve yields. Heck, name me a company that is bringing out a mass-market-capable device that are striving for synergy among their products and with that will improve yields AGAIN since they can still use CELLs with a larger defection rate for those products?

And if you do happen to find a company that does have very similar resources and targets, where would these analysts get this kind of inside information from? Or are you going to argue that Merrill Lynch has some fabs as well and thus has enough "inside" to magically produce *realistic* cost estimates like they have next?

Merrill Lynch is obviously looking at the situation from a very narrow point of view - as if Microsofts that is manufacturing their console entirely external while Sony is doing a lot inhouse are comparable. Let me ask you, how do you factor in this difference? What about the royalities or the expenses that are Microsoft is facing solely on the fact of producing their product with the help of partners like IBM, ATi & Co while Sony has their own fab? Did they also take into account that Sony invested massively into their own fabs & R&D costs? That these fabs are not only for PS3 but for other products as well? And that because they have their own fabs they also have direct control over the fabbing proccess which can result in strategic cost savings over time as seen with the PS2? And if they've considered all of these in their analysis, what numbers did they use? $$$ x or $$$ y - and why? Based on what? Based on their humble experience? Yeah right, give me break. :roll:

[avaya]

This to me is the key take away and I've yet to see anyone disagree with it. Instead we attack the credibility of the analysts, the posters agreeing with the analysts, or the exact dollar figure of the analysts.

.Sis

I don't think anyone doubts the 360 will be cheaper to make. The key question is just how much cheaper?

Is it hand over fist cheaper as ML and NKC are alluding to or is it moderately cheaper?

[Sis]

What else are people supposed to do? I don't think anyone disagrees with the overall sentiment of the article, but the fine details are dubious at best. You know as well as I do it's the details that B3D likes to pick at. It seems much of this thread has been pretty valid conversation talking about what the actual costs could be and where they could go wrong -- most of the thread has been well manored and doesn't smell of damage control as much as it does trying to get the truth of the matter (because it happens to be an interesting topic).

I don't see the problem in agreeing with the sentiment but questioning the details.Then you and I have a different impression of this thread--you sure you've read the whole thing?

.Sis

[Powderkeg]

Alright powderkeg, then please tell me which other company has a PS2 on the market, a PSP, a own fab it's devoting to these two products and using them at the same time to gain in experience and infrastructure advantage to shift significant resources onto a PlayStation successor, which they are again, utilizing different factors to their advantage as redundancy within a chip to improve yields. Heck, name me a company that is bringing out a mass-market-capable device that are striving for synergy among their products and with that will improve yields AGAIN since they can still use CELLs with a larger defection rate for those products?

Which do you think sells more. Game systems or televisions? I'll give you a hint, 120 million new TV's per year.

And TV's use chips just like game consoles. Sure, those chips might do different things, but does that really matter when you are talking about production costs? I don't think the cost to produce motherboards and chips is any different just because it's a PSP instead of a digital television.



Never mind. I keep forgetting Sony is the only company in the world who produces electronics, and nobody on earth has anything remotely similar to the facilities and expeses that they do. And nobody is ever going to tell a company that specializes in financial planning how much their expenses are either.

I'll just ignore Toshiba and Samsung over there in the corner to help your fantasy ring true.

[Carl B]

Great point Powderkeg, exactly. Sony and Toshiba will both be using Cell in TV's as well; crank down that Cell cost even further! ;)

[jvd]

This to me is the key take away and I've yet to see anyone disagree with it. Instead we attack the credibility of the analysts, the posters agreeing with the analysts, or the exact dollar figure of the analysts.

.Sis

Its apparent from the very first post in this thread that the thread was meant to cast doubt on the numbers and through that doubt on the final point of the ml and nikko (sp?) group finds .

If you've followed these forums sony fans have been very out spoken that there is no way the ps3 costs more than the xbox 360. This debate has been going on for along time even with people claiming sony will get things so dirt cheap because they make them.

Many of us have known this is complete bs as if you get things at such a reduced cost by making them yourselves , ati and nvidia would have thier own fabs . Many of us know that when listing the costs of both systems the xbox 360 would in fact be cheaper and will continue to be cheaper through out its life .

Once again this however is not something the sony fans wnat to hear and thus the reason for them continuing to argue about this subject with unkown sources and things that might or might not have been said about a diffrent subject to try and cast doubt on these reports .

Because the simple fact is that more systems are sold at the 200$ and under price point than the 400$ price point and whichever company htis that price first has a major advanantage in picking up casuals .


This thread shold have really been locked from the first post . I don't believe you should start a post with this

:lol: OMG!:lol: So they lol... I can't stop lol... So they think because MS's money is long that this will push them to win the next-gen battle? Oh Merrill Lynch you have some learning to do. I know everyday posters that can predict better than this. This is so funny. How do you guys interpert this?


To me this is the very definition of trolling .

[mckmas8808]

Which do you think sells more. Game systems or televisions? I'll give you a hint, 120 million new TV's per year.

And TV's use chips just like game consoles. Sure, those chips might do different things, but does that really matter when you are talking about production costs? I don't think the cost to produce motherboards and chips is any different just because it's a PSP instead of a digital television.



Ding, ding, ding, ding, ding, ding, ding, freaking ding, ding, dingggggg!!!! You finally got it. Wooo! That took a while but at least we made one person understand what's been said for 12 pages.

YES!!

[nelg]

Let me ask you, how do you factor in this difference? What about the royalities or the expenses that are Microsoft is facing solely on the fact of producing their product with the help of partners like IBM, ATi & Co while Sony has their own fab? Did they also take into account that Sony invested massively into their own fabs & R&D costs? That these fabs are not only for PS3 but for other products as well? And that because they have their own fabs they also have direct control over the fabbing proccess which can result in strategic cost savings over time as seen with the PS2? And if they've considered all of these in their analysis, what numbers did they use? $$$ x or $$$ y - and why? Based on what? Based on their humble experience? Yeah right, give me break. :roll:

Maybe they considered the probable fact that Sony is not a low cost producer of chips. I would wager that at anytime you would be able to have a contract manufacturer produce a chip for less money that Sony could itself.

[Metal]

Wow what a thread based on speculation and opinion. Ugh it's a higher level than the kids sites like GAF, but it still reaks of ******ism.

[Sis]

Great point Powderkeg, exactly. Sony and Toshiba will both be using Cell in TV's as well; crank down that Cell cost even further! ;)I'm holding you to this: Xb predicts that Cell will be used in a 120 million TVs every year.

.Sis

Just kidding. :grin:

[Carl B]

I'm holding you to this: Xb predicts that Cell will be used in a 120 million TVs every year.

.Sis

Just kidding. :grin:

LOL :)

Anyway since there seems to be a break from the battle right now in this thread, I want to reiterate my own belief that indeed the 360's component costs will come in below PS3's, and remain there for a couple of years, if not throughout.

[Shifty Geezer]

If you've followed these forums sony fans have been very out spoken that there is no way the ps3 costs more than the xbox 360. This debate has been going on for along time even with people claiming sony will get things so dirt cheap because they make them.Actually I think the debate has been more a case of how much will PS3 cost, rather than is PS3 cheaper than XB360. I think most expect PS3 to be more expensive than XB360, but not by the huge numbers some quarters are suggesting. For a company that can make it's own components and get most of them all at cost, producing a system of similar tech levels to a rival who buys in all their parts, it's pretty crazy to think PS3 will be 50% more expensive say to produce.

But as you say it's old ground and not worth debating again and again. Everyone's said their piece. I've heard both side and agree with points made on both sides. I don't agree with these analyst figures though, but more out of skepticsm than industry insight. To be honest I've no idea what it costs to make a chip, so for all I know $188 a Cell is bargain basement pricing!

[scooby_dooby]

I think many pro-sony guys are using the fact that Sony produces it's own chips as some sort of universal excuse that they can include any technology, no matter how expensive and somehow just because they have their own fabs that it's suddenly drastically cheaper to produce.

BR drives STILL have not even launched in North America, it's extremely expensive technology to manufacture right now. In addition, if BR doesn't win the format war Sony is stuck with a technology they cannot cost-reduce over time in a meaningful way, regardless of whether they have their own fabs or not.

The also have CELL that may or may not make it's way into consumer electronics(The EE sure didn't). If not, many of the arguments for Sony recouping losses fall to the wayside, and they're stuck with an expensive CPU.

ML pegged BR at $101 or so to produce. There's companies that specialize in nothing but estimating hardware costs, and I'm sure ML went to one of these companies for an analysis, and I'm sure that estimate is pretty close to the truth, not complete rubbish like many are claiming.

[Carl B]

Well Scooby ML also pegged Cell and RSX at $101 each, but here they deviate from that pretty substantially. Who am I going to believe, ML or ML?

I'll choose neither. ;)

The arguments I've made stand; my biggest problem is they claim Cell will cost more than RSX. It simply doesn't make sense.

[Alpha_Spartan]

Wasn't the EE supposed to replace Pentiums? Secondly, where's my EE-powered toaster? Then again, it might be quite painful eating jaggy waffles...

[Alpha_Spartan]

Well Scooby ML also pegged Cell and RSX at $101 each, but here they deviate from that pretty substantially. Who am I going to believe, ML or ML?

So ML can't revise their forcasts based on updated information? Wouldn't that be the correct thing to do?

[Carl B]

So ML can't revise their forcasts based on updated information? Wouldn't that be the correct thing to do?

Alpha read this post and explain carefully whatever reply you might come back with to me: Link (http://www.beyond3d.com/forum/showpost.php?p=614121&postcount=297)

[Sis]

So ML can't revise their forcasts based on updated information? Wouldn't that be the correct thing to do?No, his point is: if they were wrong before, they could very well be wrong now.

.Sis

[Bobbler]

And around and around we go.

[Shifty Geezer]

Wheeeeeeeee! It's fun! :lol: Makes me dizzy! Make me laugh :lol: . I wanna go again. Sony own their own fabs so can produce Cells at cost price. Even if Cell doesn't find it's way into all and sundry devices they can use it for other chips. MS have to pay markups for all their chips.

Wheeeeeeeee!

[Mintmaster]

I think 3.2 GHz is going to be a walk inthe park for these chips - have you seen the schmoo for them?I never said it wouldn't be. I just said low clock graphics processors and high clock CPU's can't have the same transistor density.
Also it's not a good comparison to use NV vs R vs AMD series chips; the architectures and the processes of different fab houses all play a role. NV suffering with a bad IBM process back in NV30 days is just one example of freak occurence and deviation from the norm.I could keep giving you examples all day. NV30 was no bigger than it should have been, and it's poor performance had to do with architecture, not process. It's a fully valid example with nothing "freak" about it in terms of transistor density. I could cite R520 vs. Winchester, and again the density is about 30% more in the former. Prescott is higher density than Winchester, but it has a lot of transistor-dense cache.
But even with all of that aside - and I grant that the die sizes might be similar in size in the end due to different densities, certainly you understand where Cell with larger economies of scale and the ability to withstand defects should come in naturally lower in price to RSX, right?Umm, why? RSX and cell will have very similar volume, since cell sales beyond PS3 will be relatively light. RSX is so closely related to G70 that it's yeilds will be easy to get high, relatively speaking. G70 is already hitting 500MHz+ (judging by third party clock speeds and rumours of a 550MHz 7800GTX) on a 0.11 um process.
And to say nothing of the fact that on the same process, with ~70 million more transistors, and using the EE and GS as precedent with Sony, I fully expect RSX to be larger as well.I've already explained why this is unlikely to be so by any significant margin. EE and GS is irrelevant - NVidia is supplying the graphics this time.
I mean c'mon, this most recent BOM has the Cell at over three times the cost of RSX in certain places. WTF?I see $160 vs $100 for Cell vs. RSX initial cost. I suppose you looked deeper into the document than me, but the final numbers are what matters.

Look at how big GPUs are in the last few years, and how the price of the whole card compares with CPUs. The GPU cores are nearly always bigger, and cost less. NVidia and ATI prefer more transistors to higher clock speed due to the parallelizability of graphics, so they make big, dense chips and sacrifice clock speed to get yields acceptable. CPU makers like high clock speed, so they sacrifice yields to get it.

Finally, IBM's cut for these chips will be much bigger than what ATI/NVidia/TSMC/NEC/Toshiba will take for these chips.


In any case, the point of this article is to compare XB360's price against PS3's. Cell has over 40% more transistors than Xenon, and when you take into account that larger chips have lower yields, $160 vs $100 for Cell vs. Xenon is very fair. If you think Cell should cost 30% less, then Xenon will cost 30% less as well. That makes the PS3 44% more expensive at launch than XB360 instead of the 46% currently in the report. Big deal.

[mckmas8808]

I want to reiterate my own belief that indeed the 360's component costs will come in below PS3's, and remain there for a couple of years, if not throughout.

And for the record to everybody reading (this means you jvd) I will second xbd. I'm not sure if it will be throughout but I most certainly think the 360 will cost less for a few of years at least.

[pakpassion]

I think many pro-sony guys are using the fact that Sony produces it's own chips as some sort of universal excuse that they can include any technology, no matter how expensive and somehow just because they have their own fabs that it's suddenly drastically cheaper to produce.

BR drives STILL have not even launched in North America, it's extremely expensive technology to manufacture right now. In addition, if BR doesn't win the format war Sony is stuck with a technology they cannot cost-reduce over time in a meaningful way, regardless of whether they have their own fabs or not.

The also have CELL that may or may not make it's way into consumer electronics(The EE sure didn't). If not, many of the arguments for Sony recouping losses fall to the wayside, and they're stuck with an expensive CPU.

ML pegged BR at $101 or so to produce. There's companies that specialize in nothing but estimating hardware costs, and I'm sure ML went to one of these companies for an analysis, and I'm sure that estimate is pretty close to the truth, not complete rubbish like many are claiming.

im surprised u realised just now how pro sony alot of b3d console-talk participants are

[Mintmaster]

The arguments I've made stand; my biggest problem is they claim Cell will cost more than RSX. It simply doesn't make sense.
OK, so I saw you link to this:
Will the RSX, if really a modified G70, be so much smaller than 221mm^2 on 90nm going from 334mm^2 at 110nm? No.
(110/90)^2 = 1.5. ==> 334/1.5 = 223.

Similar size. RSX will have high yields because it doesn't need to be clocked this high (bandwidth limitation), and G70 is already near this clock on 110 nm. CPU's have much lower yields. The more I think about it, the more I realize that the defining reason is reliability. RSX can have every billionth pixel be bad. Cell, or any other CPU for that matter, doesn't have this luxury. A random flaw can crash the system, and it runs at 3.2 billion cycles per second.

Anyway, if you're going to continue ranting about this, address the last paragraph of my previous post. The point is that the ratio of Cell cost to Xenon cost is what you should be focussing your argument on. And you really have nothing to complain about there.

[Alpha_Spartan]

i still believe that if this thread cast the Xbox 360 in a negative light, there would be much more agreement with ML...even by hardcore Xbox fans because even they are timid to defend the Xbox in a non pro-Xbox environment. I think because Sony had two relatively uncontested wins, they get a pass more often than not.

I seriously can't believe the number of "Well anyone who thinks Sony won't dominate next gen is stupid!" posts across the net considering the history of the industry and the fickleness of game consumers in the market. Previous installed base, big-named franchises, billions in the bank and brand recognition couldn't keep Atari, Nintendo and Sega at the top. In the end it was either one stupid choice or a series of stupid choices that allowed a strong competitor to overtake these previous market leaders.

I mean, who could have predicted that a seemingly insignificant move such as Nintendo breaking off a deal for a Sega CD rip-off from Sony would have resulted in Nintendo being relegated to a niche market, and the maker of "Mickey Mania" for the Genesis (Sony), would sell over 200 million consoles?

[mckmas8808]

The also have CELL that may or may not make it's way into consumer electronics(The EE sure didn't). If not, many of the arguments for Sony recouping losses fall to the wayside, and they're stuck with an expensive CPU.


Do some more research. Matter of fact don't I will do it for you.



Mercury Computer Systems has created the Dual Cell-based Blade, a computer server capable of processing at 400 gigaflops thanks to two IBM Cell BE (Broadband Engine) processors. The Cell is a single-chip multiprocessor with nine processors operating on shared memory.
The Dual Cell-based Blade is expected to greatly boost the performance in products that rely on radar, sonar, MRI and digital X-rays for customers in aerospace, defense, seismic and medical fields. For example, military reconnaissance and surveillance groups might use the new blade to process radar, sonar, and signals. Customers might also use the blade to run medical diagnostic imaging devices including MRI, PET, and digital X-rays.




Chelmsford, Mass.'s Mercury said orders for the hardware, the first Cell-based product to market outside the gaming space, are expected in the first half of 2006. The blade system is the fruit of a June 2005 agreement, in which Mercury partnered with IBM Engineering & Technology Services to integrate Cell technology into products designed to address applications that require a lot of number crunching to run to their potential.

Link http://www.internetnews.com/ent-news/article.php/3554141

Toshiba has announced that the mysterious CELL processor (http://www.engadget.com/entry/1234000970021842/), set to be used in the Sony Playstation 3 (PS3) console, will be in all their TVs in 2006 as well.

http://www.engadget.com/entry/1234000610026194/

And don't forget that Sony will be using them also. Well looks like the CELL is already pasted the EE as far as multiple usability is concerned. Bring on your next point.

CELL -> EE lesson learned.

[Carl B]

OK, so I saw you link to this:

(110/90)^2 = 1.5. ==> 334/1.5 = 223.

Similar size. RSX will have high yields because it doesn't need to be clocked this high (bandwidth limitation), and G70 is already near this clock on 110 nm. CPU's have much lower yields. The more I think about it, the more I realize that the defining reason is reliability. RSX can have every billionth pixel be bad. Cell, or any other CPU for that matter, doesn't have this luxury. A random flaw can crash the system, and it runs at 3.2 billion cycles per second.

Anyway, if you're going to continue ranting about this, address the last paragraph of my previous post. The point is that the ratio of Cell cost to Xenon cost is what you should be focussing your argument on. And you really have nothing to complain about there.

Mintmaster have you read the thread? You seem not to know what I'm ranting about.

Here go see this: Link (http://img72.imageshack.us/my.php?image=citigroup6rk.gif)

We are using the G70's die size as a baseline for the RSX simply due to the fact that we expect them to be similar, but that said I don't expect them to be the *same*. Certainly there must be some accounting for a modified architecture vs it's predecessor fab-wise when the derivative will be on low-k and SOI when the original is not. Not to mention, a different fab once again.

Also I just have to repeat that what makes dies expensive other than die area, yield, and defect-rate? With the Cell able to withstand a defect now and then and still make it into PS3, I don't see why you're putting up such a wall to the notion that Cell could cost less than RSX.

Finally Cell will have been in production (though in limited quatities) for over a year by the time PS3 launches, and likely ~9 months before it goes into volume production. This is a chip that should already have the process reaching some state of acceptable yield by that point, rather than the 30% yield posited.

We can debate this all day long - I'm full well willing. My cost comparisons have nothing to do with Cell vs XeCPU. I've never said Cell would be cheaper than the 360's chip. What I'm arguing is the bogus BOM numbers here, and how a firm that can put RSX at $75 would put Cell at $248. Do you see my point? My case? It has nothing to do with 360 vs PS3; it's all about PS3 vs PS3 - costwise. These numbers are ridiculous.

I went off on the 360's $25 DVD drive as well earlier in the thread (the costs of that drive should be much lower), so I'm hardly limiting it to the silicon inconsistencies; they're simply the more egregious.

[aldo]

I hate to do this,( :twisted: ) but just to add a little more fuel to the fire......analysts believe Cell will cost about $30 in game consoles (http://www.businessweek.com/technology/content/jun2005/tc20050628_2209_tc024.htm). I wonder if that was based on another early ML guestimate. :wink:

-aldo

[scooby_dooby]

Mckmass - Workstation are not consumer electronics.

As for Toshiba using CELL in every single TV? I'll believe that when I see it, I have no idea why they would bother including CELL in the vast majority of their TV's, what does a 32" SDTV require CELL for? It sounds extremely far-fetched.

And like I said, it MAY or MAY NOT happen(you seem to have missed the MAY and went directly to the MAY NOT), you can tell me to do research all you want, but the fact is there's nothing to prove your point since it hasn't yet made it's way into consumer electronics, so it remains to be seen what will happen.

[mckmas8808]

Mckmass - Workstation are not consumer electronics.

As for Toshiba using CELL in every single TV? I'll believe that when I see it, I have no idea why they would bother including CELL in the vast majority of their TV's, what does a 32" SDTV require CELL for? It sounds extremely far-fetched.

And like I said, it MAY or MAY NOT happen(you seem to have missed the MAY and went directly to the MAY NOT), you can tell me to do research all you want, but the fact is there's nothing to prove your point since it hasn't yet made it's way into consumer electronics, so it remains to be seen what will happen.

What I'm trying to say is CELL will be used for more things then just the PS3. Hell the PS3 hasn't made its way the consumer electronic stores, yet you believe they will use it to power the PS3 though.:???: Point being Mercury Computer Systems has paid money to use the CELL for products that rely on radar, sonar, MRI and digital X-rays for customers in aerospace, defense, seismic and medical fields. Don't you think they have to work and test this stuff out in workstations before they release it to the market?

DeanoC and nAo right now are probably working on a workstation making HS, yet you knock Mercury Computer Systems and Toshiba? Toshiba is one-third of STI why wouldn't they use the CELL processor if they said they wanted to?

[Shifty Geezer]

IIRC EE found it's way into a few CE goods before it fell by the wayside.

[scooby_dooby]

What I'm trying to say is CELL will be used for more things then just the PS3. Hell the PS3 hasn't made its way the consumer electronic stores, yet you believe they will use it to power the PS3 though.:???: Point being Mercury Computer Systems has paid money to use the CELL for products that rely on radar, sonar, MRI and digital X-rays for customers in aerospace, defense, seismic and medical fields. Don't you think they have to work and test this stuff out in workstations before they release it to the market?

DeanoC and nAo right now are probably working on a workstation making HS, yet you knock Mercury Computer Systems and Toshiba? Toshiba is one-third of STI why wouldn't they use the CELL processor if they said they wanted to?

But the crux of the entire "CELL will pay for itself" and "Sony doesn't need to have good yields cause they can re-use CELL" arguments rest in the major adoption, in a meaningful way of CELL in consumer electronics.

As for Toshiba, they will use whatever is most cost effective going into 2006. That link you posted, January 2005! It's now Nov, and I haven't heard anything about Toshiba's new line of CELL basd TV's. Aren't the 2006 models already rolling into store shelves?

Companies say alot of stuff, it doesn't always happen.

My point is many of these arguments are based on very favourable "what-ifs", CELL being adopted for CE's and mass produced is a huge IF. And Blu-Ray winning the HD format war is also a big IF, although it's looking more and more likely, the first players have not even reached our shores, so it's a far cry from a slam dunk at this point.

[liverkick]

i still believe that if this thread cast the Xbox 360 in a negative light, there would be much more agreement with ML...even by hardcore Xbox fans because even they are timid to defend the Xbox in a non pro-Xbox environment. I think because Sony had two relatively uncontested wins, they get a pass more often than not.

What Ive learned here on the B3D Console forum is that generalizing opinion in such a dismissive and skewed manner (as you've done here) isnt usually the best way to promote conversation and civil debate. Disagreeing with a general sentiment without providing any nuance or addressing individual points by lazily phrasing the cadence of discussion as "pro Sony" or "pro MS" is simply false martyrdom, and very boring at that.

[mckmas8808]

http://webpages.charter.net/spartan85/PS3vsXbox360.jpg

Wow now that's a big difference of cost.:shock: Ken needs to just toss the XeCPU into the PS3 now before Sony loses the next-gen war.:grin:

[scooby_dooby]

I think he makes a very valid point though.

If it had been an anti-MS article it would not have been torn apart and attacked like this article was. Probably would've gone 2 pages and slipped off the front page...

[scooby_dooby]

Wow now that's a big difference of cost.:shock: Ken needs to just toss the XeCPU into the PS3 now before Sony loses the next-gen war.

Still waiting for you to show me why Toshiba is not releasing CELL based TV's since 2006 is less than 2 months away...

If you're going to make comments like "Go do some reasearch" which I find very insulting, at least have the cahones to genuinely debate the facts. Where are these CELL based TVs? Why haven't Toshiba announced anything for over 10 months?

[Carl B]

Mckmass I don't get it - why do you post stuff like this, say something like 'Sony should go with XeCPU,' and then undoubtedly spend the next twenty posts arguing with people who might suggest that very thing? ;)

That chart's just the visual representation of those ridiculous other numbers though, so nothing new.

[mckmas8808]

Still waiting for you to show me why Toshiba is not releasing CELL based TV's since 2006 is less than 2 months away...

If you're going to make comments like "Go do some reasearch" which I find very insulting, at least have the cahones to genuinely debate the facts. Where are these CELL based TVs? Why haven't Toshiba announced anything for over 10 months?

That's all I seen on the website. My point to you was that CELL will make it into more products than just PS3. I noticed that you said maybe or maybe not. I just didn't like the little EE remark. You implied there that CELLs outcome could be like the EE, which are in two completely different leagues. I didn't see the need into comparing the two. That would be like me comparing the Xbox to the Xbox 360. I would never say that just because the Xbox didn't turn a profit for MS that the X360 probably wouldn't either.

Two completly different beast you see?

Mckmass I don't get it - why do you post stuff like this, say something like 'Sony should go with XeCPU,' and then undoubtedly spend the next twenty posts arguing with people who might suggest that very thing? :wink:

That chart's just the visual representation of those ridiculous other numbers though, so nothing new.

Just having a little fun thats all.:grin: I should have placed a smiley at the end. Maybe I'll do that now...

[Branduil]

http://webpages.charter.net/spartan85/PS3vsXbox360.jpg

Wow now that's a big difference of cost.:shock: Ken needs to just toss the XeCPU into the PS3 now before Sony loses the next-gen war.:grin:

Is there any point in putting the HDD on there when it won't be included with the PS3? It seems to me the best comparison would be to compare the PS3 costs with the costs for the core 360 console.

[g35er]

Is there any point in putting the HDD on there when it won't be included with the PS3? It seems to me the best comparison would be to compare the PS3 costs with the costs for the core 360 console.

I believe they are referring to Blue Ray vs. DVD.

[mckmas8808]

And people lets get back to the basics here. Do we here at B3D expect Sony to really launch for $499.99? Of course not. I think the PS3 will be $399.99 maybe even $349.99 with less price drops.

I look at it this way say the PS3 is $500 who many people will buy one? How many people will buy millions of games for Sony like they have in the past? With less consoles sold there will be less software sells. And if the PS3 will be twice the price of the X360 next holiday, then what would stop MS from dropping the price to $149 when Sony drops the price of the PS3 to $300? To me that could possibly mean that MS could have the X360 at $99 4 years from now while Sony is just be getting to the $199 mark (a price that MS would have hit 2 or 3 years before).

How many people will download content from Sony:Connect due to the fact that they won't be buying a PS3 due to the outragoues price difference between it and the 360? How many people are going to buy Blu-ray movies now that they PS3 is $500 compared to if the system started at a price point between $299.99 and $399.99?

If you look at it that way, then you would see that $500 would kill their only cash cow. Sony's other divisions could never bank off of the PS3 due to it's horrible price disadvantage. Blu-ray wouldn't catch on no where near as quick as the movie houses are hoping it will. Sony's movie division wouldn't as much as it could if the PS3's price wasn't comparable to the 360.

Sony's electronics division would be hurting due to the lack of economy of scale. The PS3's two biggest advantages (i.e. Blu-ray and CELL) could bust. If that happens with the lose of the console market advantage that they have had for the last decade wouldn't Sony be in a worst situation than they are in now?

Why would Howard Stringer praise over and over about putting the PS3 in the middle of everything Sony related if they can't even price the PS3 comparable to the other two next-gen consoles. Yes I didn't forget (maybe you guys did) that the Nintendo Revolution will cost even less than the Xbox 360. So while the Xbox 360 could be $250 next holiday season the Revolution could be $199.

So what do we have here? Holiday season 2006 we have

A.) PS3 for $500 (without a HDD)

B.) Xbox 360 for $250 (with a HDD)

C.) Revolution for $199 (with 512MB of Flash memory)


I'm sorry I just don't see that happening.:???:

[Mintmaster]

Mintmaster have you read the thread? You seem not to know what I'm ranting about.I guess not when I saw this:
What I'm arguing is the bogus BOM numbers here, and how a firm that can put RSX at $75 would put Cell at $248. Do you see my point? My case? It has nothing to do with 360 vs PS3; it's all about PS3 vs PS3 - costwise. These numbers are ridiculous.

I thought you were talking about this, given all your references to ML and how they changed their mind:
http://webpages.charter.net/spartan85/ML_Consoles.pdf
I figured you were complaining about Cell @ $160 compared to RSX @ $100.

So for the purpose of saving me time of reading 12 pages, what was your opinion on the ML report that the thread is about?

As for why Cell won't cost less than RSX, I've given you many reasons:
A) Poorer yields, due to:
- Extra low CPU error rates needed for Cell
- High clock speed (Sony knew that whatever speed they chose, it'll get easier down the road, so 3.2GHz is intentionally not a super easy target)
B) Similar size (see calculations in previous post)
C) Similar volume, because non-PS3 cell sales will not even compare to PS3 sales.

We don't have the data to quantify (A), so it's unreasonable to say one number is way off. CPU's need to be rock solid. They cost a lot more than GPUs of the same size. In video cards, it's unlikely that the GPU costs more than 1/4 of the MSRP, as you have the memory, colling, PCB, connectors, assembly, packaging, etc. to worry about as well.

Use this to compare prices of CPUs to GPUs. A 100 mm2 Prescott is ~$180. Say $90 is profit. I doubt ATI's RV515 GPU, which is also 100 mm2, costs much more than $40, or it would be suicide.

[Alpha_Spartan]

I have a new slogan for the Internet: "The Internet...where EVERYONES an Expert! Get connected today!"

BTW, I think I found this Merrill Lynch character:
http://blog.decav.com//images/blog_decav_com/andre/11/r_the-starbucks-guy%5B1%5D.jpg

Busted! That'll teach him to stop making up numbers. You're now exposed Merrill! Stop making shit up!

[Carl B]

I guess not when I saw this:


I thought you were talking about this, given all your references to ML and how they changed their mind:
http://webpages.charter.net/spartan85/ML_Consoles.pdf
I figured you were complaining about Cell @ $160 compared to RSX @ $100.


Mintmaster what do you mean all of my references? I think I said one or two things on that matter, completely on the side and not in the vein of the main body of my debate whatsoever.


So for the purpose of saving me time of reading 12 pages, what was your opinion on the ML report that the thread is about?

As for why Cell won't cost less than RSX, I've given you many reasons:
A) Poorer yields, due to:
- Extra low CPU error rates needed for Cell
- High clock speed (Sony knew that whatever speed they chose, it'll get easier down the road, so 3.2GHz is intentionally not a super easy target)
B) Similar size (see calculations in previous post)
C) Similar volume, because non-PS3 cell sales will not even compare to PS3 sales.

We don't have the data to quantify (A), so it's unreasonable to say one number is way off. CPU's need to be rock solid. They cost a lot more than GPUs of the same size. In video cards, it's unlikely that the GPU costs more than 1/4 of the MSRP, as you have the memory, colling, PCB, connectors, assembly, packaging, etc. to worry about as well.

Use this to compare prices of CPUs to GPUs. A 100 mm2 Prescott is ~$180. Say $90 is profit. I doubt ATI's RV515 GPU, which is also 100 mm2, costs much more than $40, or it would be suicide.


The Prescott core is by and large estimated to cost Intel $40 to fab, and here's a link to such for you: Link (http://www.infoworld.com/article/05/09/14/HNintelchipscost_1.html)

I honestly don't think the yields between GPU's and CPU's at the same die size diverge *that* much; maybe we can get some stats on that. As for the 3.2GHz, I'm sure it has as much to do with power and cooling concerns as anything else. Did you check out that schmoo plot I referenced earlier in the thread?

http://realworldtech.com/includes/images/articles/cell-8.gif

I've given you my reasons already why I feel Cell will be lower priced than RSX, so I'm not going to repeat the same line over and over. (Ok maybe a little)

If you're asking me to answer the problem I have with ML's numbers, it's the same ones I have with Citi's: the numbers just seem all around too divergent and slipshod. You don't need to dwell on GPU's vs CPU's to see the fallacy of their analysis - you have low yields expected, based on the premise of perfect chips and an immature process, and on those grounds alone one can reverse engineer the cost and assume that *if* Merrill (or Citi) even had anything realistic to work with in the first place, defect-tolerence on the SPE's and a yield rate that should approach industry norms soon before or soon after the PS3 launches should lead to a much more 'in line' cost with it's die-size peers, if for nothign other than 'in line' yields.

If you came here to debate on the behalf of the position of ML because they are a 'reputable' firm, then where does Citi stand in your eyes with their divergent numbers? Do you believe at the same process with the same die size Cell (absorbing a defect and in the middle of it's schmoo capabilities) would cost 60% more than the RSX? How about Citi's three times as high numbers? What about Envisioneering Group's $30 estimates?

If you are going to arbitrarily defend one firms numbers, how do you choose which one?

To end, the XeCPU is reported by IBM to get 'good' yields. Since I imagine it would be easier to get Cell chips to 3.2 GHz than a tri-PPE cored chip, and because the Cell chips can tolerate a die defect now and then, and because the fab process is the same, I imagine that yields should at least be similar on one level or another.

[Sis]

I look at it this way say the PS3 is $500 who many people will buy one?Are you seriously restating what the report is saying?


B.) Xbox 360 for $250 (with a HDD)

And then you conveniently ignore that this is a wrong interpretation already well discussed; 250 is for the Xbox 360 without a HDD.


You may want something really badly, that doesn't make it reality. Sony may very badly want to release at the 299 price point--just like PS2. It doesn't mean they can. And just the same: Sony may very badly want to release at the 399 price point, but it doesn't mean they can.

Honestly, I think we'll see a $399 PS3 up against a 250/350 Xbox 360. This doesn't change the fact that if you look at the core model, that's 250 compared to 399, a $150 difference. Add up that it appears not to hurt MS as much financially, and you have Sony at a disadvantage--which is what the report says.

.Sis

[Inane_Dork]

Is there any point in putting the HDD on there when it won't be included with the PS3? It seems to me the best comparison would be to compare the PS3 costs with the costs for the core 360 console.The HDD is included because it's included in the more popular SKU for the 360. It's possible that Sony will have a 2 SKU setup with one of them having an HDD, so just in case, they included it. If not, then just skip that column. No biggie.

[nelg]

xbdestroya,

That chart is for PPE clocks only, IIRC.

[Carl B]

xbdestroya,

That chart is for PPE clocks only, IIRC.

Well, it's actually SPE clocks. ;)

[expletive]

Are you seriously restating what the report is saying?


And then you conveniently ignore that this is a wrong interpretation already well discussed; 250 is for the Xbox 360 without a HDD.


You may want something really badly, that doesn't make it reality. Sony may very badly want to release at the 299 price point--just like PS2. It doesn't mean they can. And just the same: Sony may very badly want to release at the 399 price point, but it doesn't mean they can.

Honestly, I think we'll see a $399 PS3 up against a 250/350 Xbox 360. This doesn't change the fact that if you look at the core model, that's 250 compared to 399, a $150 difference. Add up that it appears not to hurt MS as much financially, and you have Sony at a disadvantage--which is what the report says.

.Sis

Just to add on here, with Sony its a zero-sum game between cost and selling price. You can say sony will sell at whatever you wih but there is direct impact to losses as that sales price goes down in order to match the 360.

What Sony wants to do is obviously sell it for as much as they can without it affecting sales numbers. Maybe there is no limit. Maybe they will sell them all regardless. However, if that isnt the case it seems in terms of price, at least early on, they have to rob peter to pay paul.

[mckmas8808]

What Sony wants to do is obviously sell it for as much as they can without it affecting sales numbers. Maybe there is no limit. Maybe they will sell them all regardless. However, if that isnt the case it seems in terms of price, at least early on, they have to rob peter to pay paul.

Yeah and if you keep paying Paul with Peter money, Peter will soon realize it and just seperate itself from the robber. Thus Paul will start to receive less and less money over time.:wink:

Honestly, I think we'll see a $399 PS3 up against a 250/350 Xbox 360. This doesn't change the fact that if you look at the core model, that's 250 compared to 399, a $150 difference. Add up that it appears not to hurt MS as much financially, and you have Sony at a disadvantage--which is what the report says.

Well yeah but the report had the PS3 at $500. Something neither you nor me believe will happen as of now (a.k.a. we agree on this). And to me that basically means that in no way can Sony compete in any way with the X360 in price. Not it get close. I simply disagree with that thought. Does the 360 cost less to make? Of course. But will it be $250 less? I don't think so imho.

[Mintmaster]

xbd, the only thing I'm disputing now is this:
I've given you my reasons already why I feel Cell will be lower priced than RSX, so I'm not going to repeat the same line over and over.
The only argument I've seen is that:
A) Cell has fewer transistors and is on the same process
B) You made some obscure argument about volume.

Regarding A: # of transistors is irrelevant if you have the die size and yields. The former will be about the same for both. I've already shown you the simple calculations, and you've said nothing about them. The latter we don't have, but I see no reason for Cell to have better yeilds than RSX. There's a stricter testing for CPUs, and higher clock speeds do more for the CPU than the GPU.

Regarding B: Cell will not have an appreciably higher volume than RSX, for the last time. Both are on equal footing. The number of Cell processors sold outside of PS3 is almost meaningless.

As for your link to Intel's cost for a Prescott, remember that $40 includes all the celerons they sell, which are actually cache-defective P4's. Moreover, my number for ATI's RV515 is quite high. TSMC will take their profit as well, so the actual chip can't be more than around $20.

[Nesh]

Just read the article.Things may proove as I have expected.

Ken has the same attitude Sega had with the Saturn.And just like the Saturn PS3 is extremely costy compared to XBOX260.To make things even worse for Sony, MS can make easier price cuts.Just as Sony could, back in the PS1 days forcing Sega to reduce their price.PS1 was more competitive both at price and cost.

Now Sony is Sega, PS3 is the Saturn,MS could be Sony, and 360 could be the PS1 of this generation :???:

[one]

Sorry if this is already posted,

This is how Merrill Lynch forecasted the PS2 launch in August, 1999.
http://news.zdnet.com/2100-9595_22-515432.html?legacy=zdnn
Report: PlayStation to land Jan. 23
By Robert Lemos, ZDNet News
Published on ZDNet News: August 13, 1999, 5:00 PM PT

Financial firm Merrill Lynch predicts that the PlayStation 2 -- Sony Corp.'s next-generation game machine -- will hit Japanese shelves on Jan. 23 at a hefty price of 45,000 yen (U.S. $391), according to a report published this week.

Even at that price, Sony will barely cover the cost of the parts needed to build the machine, ZDNN reported in a previous article. In addition, the machine will have to contend with Sega Enterprises Ltd.'s own game machine, the Dreamcast, which has been available in Japan for almost a year.

While Dreamcast machine will hit U.S. shelves Sept. 9 at a much more affordable $199, analysts have predicted that the PlayStation 2 will become the giant in the market.

Merrill Lynch's outlook is also optimistic. The report pegs initial shipments of the PlayStation 2 at 400,000 units with a total of 1 million consoles sold during the first three months of 2000.

Aggressive plans
Those numbers mesh with the agreements forged between Sony and its partners. For example, Sony has contracted Toshiba to manufacture the console's main processor to the tune of 1 million processors by Dec. 1999, and another million in the first quarter of 2000.

The aggressive plans will drain the company's coffers, according to the Merrill Lynch report, which predicted that Sony's PlayStation division will post a $110 million loss in the year ending March 2000.

Those losses will be temporary if demand picks up, transforming into a $130 million profit by the following year. High software prices will contribute to the turnaround, with the 10 initial titles at an average price of 8,000 yen (U.S. $70) each.

The report said to expect more details at the Tokyo Game Show in September.

Now let's compare them with the actual stats. The exchange rate at the point of the above article was 1$= 115 yen (45,000 / 391). The rate today is 1$ = 117 yen, so not very different.

PS2 launched in Japan on March 4, 2000 for 39,800 yen. The average price of launch titles is 6,800 yen (or lower as the most expensive was at 6,800 yen).

For production shipments,
http://www.scei.co.jp/corporate/data/bizdataps2_e.html

2000/03/06 720,000 units (Japan only)
2000/03/15 1 million units (Japan only)
2000/03/31 1.41 million units (Japan only)
2000/05/24 2 million units (Japan only)

BTW, PS2 was launched in the US on October 26, 2000 at $299.99 with an HDD bay.

[Carl B]

The only argument I've seen is that:
A) Cell has fewer transistors and is on the same process
B) You made some obscure argument about volume.

Regarding A: # of transistors is irrelevant if you have the die size and yields. The former will be about the same for both. I've already shown you the simple calculations, and you've said nothing about them. The latter we don't have, but I see no reason for Cell to have better yeilds than RSX. There's a stricter testing for CPUs, and higher clock speeds do more for the CPU than the GPU.

Regarding B: Cell will not have an appreciably higher volume than RSX, for the last time. Both are on equal footing. The number of Cell processors sold outside of PS3 is almost meaningless.

As for your link to Intel's cost for a Prescott, remember that $40 includes all the celerons they sell, which are actually cache-defective P4's. Moreover, my number for ATI's RV515 is quite high. TSMC will take their profit as well, so the actual chip can't be more than around $20.

I think you and I are at an impass of sorts. You keep mentioning my commentary on Cell and volume... but I haven't given any. What in the world are you debating me about with your 'point B'? Have I mentioned Cell's volume even once with you? When did I say it would have an 'appreciably' larger volume than RSX? Any comments I made regarding Cell in TV's was simply to aggravate Powderkeg, and I only made one. In my prmary argument I simply used the point that East Fishkill will be producing Cell in addition to Nagasaki and OTSS to indicate that Cell will have more collective expertise fabbing it (and yes more volume to an extent, but not a focul point). RSX has only Nagsaki and OTSS.

On your other point, well honestly I just don't know - do GPU's have better yields, so to speak? If you could link me to any information indcative of such, I would certanly take the time to read it.

I'm not sure why you started debating with me in the first place t be honest, or what we're debating about at this point, but if it was simply to counter my assessment of the Cell costs vs RSX costs to be overly optimisitc, well we'll agree to both understand each others positions.

But now with all of that said, what I want to know is to what extent do you agree with the BOM numbers of ML and Citi, respectively? Becase even though I can undertstand you disagreeing with me, I can't full well believe you wouldn't see how their numbers seem *highly* suspect . Beyond their numbers not agreeing with each other in the least, either...

[Nesh]

Sorry if this is already posted,

This is how Merrill Lynch forecasted the PS2 launch in August, 1999.
http://news.zdnet.com/2100-9595_22-515432.html?legacy=zdnn


Now let's compare them with the actual stats. The exchange rate at the point of the above article was 1$= 115 yen (45,000 / 391). The rate today is 1$ = 117 yen, so not very different.

PS2 launched in Japan on March 4, 2000 for 39,800 yen. The average price of launch titles is 6,800 yen (or lower as the most expensive was at 6,800 yen).

For production shipments,
http://www.scei.co.jp/corporate/data/bizdataps2_e.html

2000/03/06 720,000 units (Japan only)
2000/03/15 1 million units (Japan only)
2000/03/31 1.41 million units (Japan only)
2000/05/24 2 million units (Japan only)

BTW, PS2 was launched in the US on October 26, 2000 at $299.99 with an HDD bay.
You dont know how much costy to manufacture PS2 was back then compared to how costy PS3 will be to manufacture though.Also add the aditional manucaturing cost of the BR disc which could reduce revenues per game sold and the fact that developers need more revenues per game sold since games are a lot more costy to create and Sony could end up in trouble.

[one]

You dont know how much costy to manufacture PS2 was back then compared to how costy PS3 will be to manufacture though.Also add the aditional manucaturing cost of the BR disc which could reduce revenues per game sold and the fact that developers need more revenues per game sold since games are a lot more costy to create.Do Merrill Lynch know those details? I don't think so. What I know is, Microsoft own no fabs while Sony own some.

[Nesh]

Do Merrill Lynch know those details? I don't think so. What I know is, Microsoft own no fabs while Sony own some.
Probably he doesnt but neither do we :razz:

You are right about your last comment though.Thats something I ommited.

[Powderkeg]

Sorry if this is already posted,

This is how Merrill Lynch forecasted the PS2 launch in August, 1999.
http://news.zdnet.com/2100-9595_22-515432.html?legacy=zdnn


I see something you apparently didn't notice.

They said the $391 would barely cover the cost of the parts. Now, I don't have proof, but I'm fairly sure that that figure is pretty close to right. We all know the PS2 sold for a loss at launch, and I don't think a <$91 loss per system is unreasonable.

[one]

I see something you apparently didn't notice.
Eh? They said the launch would be January 2000. Don't you see the price is closely related to the launch date?

[scooby_dooby]

Sorry if this is already posted,

This is how Merrill Lynch forecasted the PS2 launch in August, 1999.
http://news.zdnet.com/2100-9595_22-515432.html?legacy=zdnn


Now let's compare them with the actual stats. The exchange rate at the point of the above article was 1$= 115 yen (45,000 / 391). The rate today is 1$ = 117 yen, so not very different.

PS2 launched in Japan on March 4, 2000 for 39,800 yen. The average price of launch titles is 6,800 yen (or lower as the most expensive was at 6,800 yen).



So 7 months before launch they predicted the launch price within 12%, not bad.

They also nailed the X360 launch price, and 2 SKU's well before the announcement BTW.

[scooby_dooby]

You implied there that CELLs outcome could be like the EE, which are in two completely different leagues.

I said it may very well end up with the same fate as the EE, something you need to realize is a very real and distinct possibility before you start calling these reports "garbage" and insulting people who try and point that possibility out.

If you listened to analysts, and news reports in 2000, EE and it's super-computer like power was going to power many things beyond just game machines. It didn't happen.

[one]

If you listened to analysts, and news reports in 2000, EE and it's super-computer like power was going to power many things beyond just game machines. It didn't happen.So you think those like Mercury Systems already paying IBM to use the exactly same Cell PS3 uses are bunch of PR tools...:cool:

[mckmas8808]

I said it may very well end up with the same fate as the EE, something you need to realize is a very real and distinct possibility before you start calling these reports "garbage" and insulting people who try and point that possibility out.

If you listened to analysts, and news reports in 2000, EE and it's super-computer like power was going to power many things beyond just game machines. It didn't happen.

Look lets start over. My bad for being rude to you (as a man I can say this), but I don't listen to analysts. I listen to people that work in the industry and will use the actual product. If I had listened to ML in 1999 I would have thought that PS2 games would be $70. I would have thought that the PS2 would debut at 45,000 yen.

I'll rather listen more to what Sony has to say about their own product.

[scooby_dooby]

Fair 'nuff.

To be fair, this report inly says we 'might' see a $499 PS3. It says it's possible to have a $250 core(only a $50 drop) against a $499 PS3. Possible, not for sure.

I think most people will agree we'll see a $399 PS3, but it is possible that's simply too low of a price for even Sony to handle.

[dantruon]

in the long run economies scale for the PS3 will be larger than that of the xbox 360 which mean that the cost per unit of the ps3 will be lesser than that of the xbox360 given that Sony Ps3 sell more than xbox360. i can do a quick graph and show off my economic skill if you guy wishes.

[expletive]

Is it time to turn this thread into glue yet?

[BTOA]

So 7 months before launch they predicted the launch price within 12%, not bad.

They also nailed the X360 launch price, and 2 SKU's well before the announcement BTW.
When did they predict the price and 2 Sku's of Xbox 360, because I heard the pricing and package a week before the announcement at the August event.

[blakjedi]

dantruon... the economies of scale argument can only apply to the same product... i.e. PS3 has a break even/cost neutral point that is COMPLETELY independent of X360 or any other similar console. We have no idea what the cost neutral economy of scale is for either console therefore your estimation is most likely false.

Just to point out with a real world example, the economy of scale that yielded a profit for Nintendo GC has existed for several years. By designing a cost effective console from the onset, Nintendo has reached its necessary economy of scale to yield a profit even though it has sold less units than the Xbox 1. :!:

[mckmas8808]

Fair 'nuff.

To be fair, this report inly says we 'might' see a $499 PS3. It says it's possible to have a $250 core(only a $50 drop) against a $499 PS3. Possible, not for sure.

I think most people will agree we'll see a $399 PS3, but it is possible that's simply too low of a price for even Sony to handle.

Honestly and please I really want a honest answer from you. Why on two different occasions did we hear that there are whispers of the PS3 to be released for the same price that the PS2 will be released at?

Disclaimer: This question is in no way fanguyish and is not meant to start an uproar or flame battle. Take the question at face value and understand these whispers are coming from Sony's own house.

[Johnny Awesome]

The ML numbers are probably a little inflated, but the relative situation is likely correct. It might happen that the PS3 launch in the US for $399 in the Fall of 2006 and the core X360 will be next to it on the shelf for $249 along with about 50 2nd-generation titles, including Gears of War and a quality Japanese RPG or two. This is going to be a good fight. :)

[scooby_dooby]

Honestly and please I really want a honest answer from you. Why on two different occasions did we hear that there are whispers of the PS3 to be released for the same price that the PS2 will be released at?

Disclaimer: This question is in no way fanguyish and is not meant to start an uproar or flame battle. Take the question at face value and understand these whispers are coming from Sony's own house.

I don't know what whispers you're talking about, but common sense tells me there's no way in hell they launch for $299 in the US. If they do I'm buyin one!

[Mintmaster]

I'm not sure why you started debating with me in the first place t be honest, or what we're debating about at this point, but if it was simply to counter my assessment of the Cell costs vs RSX costs to be overly optimisitc, well we'll agree to both understand each others positions.
Fair enough. But FYI, this is what I was arguing against:
But even with all of that aside - and I grant that the die sizes might be similar in size in the end due to different densities, certainly you understand where Cell with larger economies of scale and the ability to withstand defects should come in naturally lower in price to RSX, right? And to say nothing of the fact that on the same process, with ~70 million more transistors, and using the EE and GS as precedent with Sony, I fully expect RSX to be larger as well.
You said you didn't want to repeat the reasons why you though Cell would be cheaper than RSX, and this is all I could find. I assumed that by "economies of scale" you're referring to volume, but the only way that's relevant to your claim is if RSX has a lot less volume. RE defects: I already said that RSX should have no problems, but even if it did, it would be a minor performance downgrade to make it like the 7800GT, where one of 6 shader quads are disabled.


But now with all of that said, what I want to know is to what extent do you agree with the BOM numbers of ML and Citi, respectively? Becase even though I can undertstand you disagreeing with me, I can't full well believe you wouldn't see how their numbers seem *highly* suspect . Beyond their numbers not agreeing with each other in the least, either...
I can definately say that the Citigroup numbers are pretty whack. But ML's numbers seem fine. I know you thought their DVD prices were way off, but I think what you pointed to on NewEgg is just old inventory. I don't think they're making anything other than writers now for OEMs. XB360 probably requires a much tighter form factor as well - I'm sure DVD drives for notebooks aren't nearly as cheap. They did pretty well last time with PS2.

The point about XB360 being half the cost of PS2 was stated as a "possibility", and it think it's there to outline that Microsoft can sell the XB360 at a high price until the PS3 launches. The "economies of scale" kick in faster for MS than Sony. I think its even more possible to see a $199 base XB360 up against a $399 PS3.

[ihamoitc2005]

dantruon... the economies of scale argument can only apply to the same product... i.e. PS3 has a break even/cost neutral point that is COMPLETELY independent of X360 or any other similar console. We have no idea what the cost neutral economy of scale is for either console therefore your estimation is most likely false.

Just to point out with a real world example, the economy of scale that yielded a profit for Nintendo GC has existed for several years. By designing a cost effective console from the onset, Nintendo has reached its necessary economy of scale to yield a profit even though it has sold less units than the Xbox 1. :!:

I do not speak for dantruon but what he is saying is correct because he is talking about relative unit cost. Although the hardware assets of the PS3 are slightly more than of Xbox360, due to higher sales volume, it will actually end up having lower per unit cost than the Xbox360. Further is that PS3 is almost certainly designed for reduction to smaller manufacting process, which reduces per unit cost even more.

However, what "NESH" said is also true, that higher cost of BluRay disc compared to one DVD can slightly impact profit of developers and slightly increase risk for small developers but latest BluRay disc process is not much more producer cost than regular DVD and when games require multiple DVDs, Blu-Ray disc will actuallly be cheaper for game producers because only one BluRay disc needed per game.

[Hardknock]

Uhh, nobody knows how much either console will sell so economy of scale comparisions are pointless.

[ihamoitc2005]

Uhh, nobody knows how much either console will sell so economy of scale comparisions are pointless.

You are right that no one knows, hence we can only speculate or project based on available information and understanding. This thread topic is one of projection no? So feel free to make projection. If you you are right, you will have satisfaction of having made correct projection, if not you will have learned something new.

[Magnum PI]

starting from a conclusion that is nothing much that wishful thinking, some or us then make some creative reasoning to support their vision.

arguing with someone who has this way of thinking is a pure waste of time point.

[mckmas8808]

Uhh, nobody knows how much either console will sell so economy of scale comparisions are pointless.

Uh that's why companies have projections. They base their cost of the console based on how many they project to sell. Sony can project to sell lets say 15 million consoles in one year; while MS could project 10 million in the first year.

This affects the price of the console in a way.

[SirTendeth]

Economies of scale wouldn't be linear.

They would vary based on internal line capacity limits, royalties, distribution lines, etc.

Product redesigns can also change the effective return negatively.

So aside from our lack of real numbers, we also suffer from ignorance to the contractual arrangements, and internal cost points of both companies.

[Phil]

Excellent find One. :smile:

Anyway now it's my turn to predict something now: I predict that when PS3 goes into full scale production, it'll be more expensive than the Xbox360. Over time though and thanks to owning their own fabs as well as that CELL can be used in other products to improve yields, I predict that Sony will be in a position to be far more agressive with pricing and that PS3 will drop quicker in costs than the competition.

[Shifty Geezer]

I don't think PS3 price will drop quicker, for the same reaon it didn't with PS2. Sony like to price high and have people think they're paying extra for quality. PS3 wouldn't IMO ever be cheaper than XB360 as that loses the price-based better-quality representation - 'It's the better console, and that's why it costs more. XB360 is cheaper, but you get what you pay for.'

[one]

Just to point out with a real world example, the economy of scale that yielded a profit for Nintendo GC has existed for several years. By designing a cost effective console from the onset, Nintendo has reached its necessary economy of scale to yield a profit even though it has sold less units than the Xbox 1. :!:Though it's widely believed that the Xbox 1 hardware cost them huge, we don't know if the Xbox Live business is profitable or not with free accounts and so on. Also they do software giveaway. You call 'hey I want to quit Xbox Live' and you get 1 free game from Microsoft if you don't :wink:

[Phil]

I don't think PS3 price will drop quicker, for the same reaon it didn't with PS2. Sony like to price high and have people think they're paying extra for quality. PS3 wouldn't IMO ever be cheaper than XB360 as that loses the price-based better-quality representation - 'It's the better console, and that's why it costs more. XB360 is cheaper, but you get what you pay for.'

I wasn't refering to the product price dropping quicker, I was refering to costs (hence why I mentioned them owning their own fabs being a factor as to how they will gain an advantage in the long run). :wink:

[Gubbi]

I wasn't refering to the product price dropping quicker, I was refering to costs (hence why I mentioned them owning their own fabs being a factor as to how they will gain an advantage in the long run). :wink:

There's both cost and risk involved in owning your own fabs. Fabs are expensive so you'd want to utilize them close to 100%. But not more! If demand outstrips supply you have to either lose money (or rather, not earn them) or build a new fab (which is expensive).

Buying your chips at foundries reduces this risk (since they have multiple fabs). And with the amount of business MS is placing, I'm sure they have excellent contracts in place.

Cheers
Gubbi

[Phil]

Gubbi,

I am aware of that, I'm sure, Sony is as well. I trust that if Sony could get better deals from other vendors, they would. The situation with the PS2 and PStwo has showed however that it obviously worked better for them to go there with PS3 / PSP again as well.

Just about anything can be a risk - yet it's up to the company to make the right risks and play off their potential of turning into an advantage. Sony's in the best position to know what their fabs can handle, how much they cost is involved and all other internal factors as well. What they can't predict is the market and how they will buy their products.

It's always a gamble, but noting their experience in the past, I'm sure they've accounted for potential risks.

I also have no doubt that Microsofts has made excellent deals with their partners - yet, you have to factor in that Sony is expecting similar sales of PS3 as what they've accomplished with PS2 (100 million units within 5/6 years?). How much is Microsoft expecting? Realistically, not anywhere near as much - a mix between being conservative (20 million after 3 years ) to optimistic (30 million in 3 years). These predictions and expectations determine deals as well. In the end though, I am sure that Sony could get better deals from the same vendors than Microsoft based on the fact that they're expecting a higher success rate than any of their competitiors (and realistically, so would be their potential vendors). Since they are continueing staying with their internal fabs, I take it they can achieve a significant advantage that would warrant this strategy - basically along the lines:

[ fixed costs of fab + variable costs of production * x units ] < [ fixed costs * x units from vendors ]

disclaimer: just a primitive equation of course - what's not included obviously is that Sony can use that fab for various products as noted further above.

[Hardknock]

Excellent find One. :smile:

Anyway now it's my turn to predict something now: I predict that when PS3 goes into full scale production, it'll be more expensive than the Xbox360. Over time though and thanks to owning their own fabs as well as that CELL can be used in other products to improve yields, I predict that Sony will be in a position to be far more agressive with pricing and that PS3 will drop quicker in costs than the competition.

Going by your logic, the PS2 should be much cheaper than the Gamecube to manufacture. Since it's manufactured in-house and has sold 5 times more than the GC. But that's simply not the case. The GC had better hardware, sold 1/5 the amount as PS2 and was still much cheaper. :wink:

There are several factors that go into how cheap a console is to manufacture, we simply do not have all the details to make such a call yet.

[Phil]

Hardknock,

I thought it was obvious that I was comparing two products with very similar transistor budgets and not, as you are expecting, a product from 2000 on process x with a product from 2001 on process y with different transistor budgets etc. If you use the search function though, I'm sure you'll come across to a discussion on the costs of PStwo vs. GameCube and that they may be quite similar if not to a slight advantage in PStwo's favour.

[london-boy]

Going by your logic, the PS2 should be much cheaper than the Gamecube to manufacture. Since it's manufactured in-house and has sold 5 times more than the GC. But that's simply not the case. The GC had better hardware, sold 1/5 the amount as PS2 and was still much cheaper. :wink:

Uhm and you know that how? Also, "much cheaper"? Err...

[Hardknock]

Hardknock,

I thought it was obvious that I was comparing two products with very similar transistor budgets and not, as you are expecting, a product from 2000 on process x with a product from 2001 on process y with different transistor budgets etc. If you use the search function though, I'm sure you'll come across to a discussion on the costs of PStwo vs. GameCube and that they may be quite similar if not to a slight advantage in PStwo's favour.

Hey, if I'm wrong about GC and PS2's BOM please hook me up with the information you have. I've just always been under the impression the GC was much cheaper to produce(which was reflected in pricing.)

[Hardknock]

Uhm and you know that how? Also, "much cheaper"? Err...

Are you going to add anything substantial or just "??" and "Err..." with each reply?

[london-boy]

Are you going to add anything substantial or just "??" and "Err..." with each reply?

:roll: Are you going to add anything substantial or just your own views on things you know nothing about?

[Hardknock]

:roll: Are you going to add anything substantial or just your own views on things you know nothing about?

Here's the thing, this is a message board filled with difference opinions. If you don't agree with what I said, show/explain where I'm wrong. Don't just respond with "Err..." A RESPONSE LIKE THAT SERVES NO PURPOSE. I don't claim to be 100% correct 100% of the time, if I'm wrong please let me know where so I can learn, thanks.

[london-boy]

Here's the thing, this is a message board filled with difference opinions. If you don't agree with what I said, show/explain where I'm wrong. Don't just respond with "Err..." A RESPONSE LIKE THAT SERVES NO PURPOSE. I don't claim to be 100% correct 100% of the time, if I'm wrong please let me know where so I can learn, thanks.

Don't you go around telling people how to post. This costs thing has been discussed many times before, and it was shown that PS2 and GC have been manufactured for the same cost (more or less depending on the source, many believe that PStwo is actually cheaper than GC to produce) for years now. That's why i went "err..."

The fact that PS2 still costs more in the shops has nothing to do with how much it costs to produce.

Happy now with the "full response"? This has all been discussed before.

[Hardknock]

Don't you go around telling people how to post. This costs thing has been discussed many times before, and it was shown that PS2 and GC have been manufactured for the same cost (more or less depending on the source, many believe that PStwo is actually cheaper than GC to produce) for years now. That's why i went "err..."

The fact that PS2 still costs more in the shops has nothing to do with how much it costs to produce.

Happy now with the "full response"? This has all been discussed before.

You sure have an attitude this morning. But anyway, you say it's been "shown". Can you provide a link to this? Otherwise I find that very hard to believe. All signs point to GC being significantly cheaper. If you want to listen to "armchair analysts" on a forum with no proof that's fine. But don't go acting like your opinion is fact and my hypothesis is ridiculous when you have no facts to back up either claim in the first place. Thank you.

[london-boy]

You sure have an attitude this morning. But anyway, you say it's been "shown". Can you provide a link to this? Otherwise I find that very hard to believe. All signs point to GC being significantly cheaper. If you want to listen to "armchair analysts" on a forum with no proof that's fine. But don't go acting like your opinion is fact and my hypothesis is ridiculous when you have no facts to back up either claim in the first place. Thank you.

Couldn't i say the same about you?
At least i'm not the one who's been completely one-sided on any discussion we've ever had.

What "signs" point to GC being "significantly cheaper" than PS2, if i may ask?
Because if anything, the "signs" are that PS2 (or PStwo) should be cheaper, (1) the EE and GS is one chip now at 90nm and has been for ages, compared to the 2 chip (Flipper+Gekko at a bigger manufacturing process, making the chips bigger than using 90nm process) solution of GC, therefore cheaper, (2) Sony's making the whole thing in house without many external clients to pay, (3) PS2 is older technology, (4) PS2 has sold 5 times as much as GC and keeps outselling it by god knows what margin, therofre economies of scale would dictate PS2 should be cheaper anyway.

They are either equal or PStwo is cheaper, according to those "signs". Now if you have other "signs", i'd love to see them.
As i said, the fact that PS2 is more expensive in the shops has absolutely nothing to do with how much it costs to manufacture. It just means that Sony can sell it at that price, because people keep buying the bloody thing!! PS2 was even more expensive (in the shops) than Xbox at one point, and today i think they sell for the same price, that in no way means that PS2 costs more (or the same) to manufacture than Xbox.

[one]

Buying your chips at foundries reduces this risk (since they have multiple fabs). And with the amount of business MS is placing, I'm sure they have excellent contracts in place.I wonder how applicable this "multiple fabs" horizontal model is to the real-world Xbox 360 production. AFAIK, it's said that the horizontal model is good for many kinds / small production, and the vertical model is good for less kinds / mass production, in terms of the cost. The horizontal fabless model is also resistant to a natural disaster such as earthquake.

For CPU, they use IBM 90nm SOI process so they can't move it from IBM and Chartered. For GPU, the daughter-die can't be moved from NEC so if it's stalled the assembly for the final product would stop. For the GPU core manufactured at TSMC, can they add second sources easily enough?

[BTOA]

Couldn't i say the same about you?
At least i'm not the one who's been completely one-sided on any discussion we've ever had.

What "signs" point to GC being "significantly cheaper" than PS2, if i may ask?

Hardknock listens to Deadmeat's cost assuptions. :lol:

[nelg]

Over time though and thanks to owning their own fabs as well as that CELL can be used in other products to improve yields, I predict that Sony will be in a position to be far more agressive with pricing and that PS3 will drop quicker in costs than the competition.

Please explain how owning your own Fab automatically equals lower cost.

[Phil]

I didn't say that owning a fab automatically equals lower costs. Actually, it should be more than obvious what advantage owning your own fab can have. As I explained further above, seeing PS2 & PSP production and PS3 to continue this trend, it's obviously cheaper for Sony as a whole.

If you disagree with this, please explain with what exactly and/or state why.

[london-boy]

Please explain how owning your own Fab automatically equals lower cost.

No middle people to feed, for one.

[Joe DeFuria]

No middle people to feed, for one.

There are pros and cons to being more vertically integrated. Nothing is automatic, otherwise ATI and nVidia would have their own fabs.

[london-boy]

There are pros and cons to being more vertically integrated. Nothing is automatic, otherwise ATI and nVidia would have their own fabs.

Sure, i was just mentioning one of the advantages. Never said there are no disadvantages. :grin:

[Phil]

There are pros and cons to being more vertically integrated. Nothing is automatic, otherwise ATI and nVidia would have their own fabs.

When your products reach a certain amount of demand, I'm sure at some point it would be of interest to them as well. Of course, such a task would be a very large investment and risky, but on the other hand, if demand is there to make it feasable...

[london-boy]

Also, it is quite different for ATI and NVIDIA.

Sony are a hardware company who have been fabbing their own stuff (or most of it anyway) for decades. They have had fabs for decades, they can change those fabs to manufacture pretty much whatever they need. And they can build new fabs if they want. Always with the assurance of getting things from 3rd parties (samsung, toshiba and others come to mind) if need be. Point being that they have had fabs already, they know what it takes, they know the advantages and the disadvantages because they've been through it all.

ATI and NVIDIA have produced much less hardware in their lifetime, they have no fabs of their own, therefore the investment for them would probably be higher than for Sony. That's without taking into consideration that those would be their first fabs ever, and lots of things go wrong when someone does something they have never done before.

Sony obviously felt they had a better deal by fabbing their own chips, in the long run. Or at least they evaluated that the advantages in the long run outweigh the disadvantages. Otherwise it wouldn't take much to them to just outsource fabbing, like everyone does.

[mckmas8808]

Going by your logic, the PS2 should be much cheaper than the Gamecube to manufacture. Since it's manufactured in-house and has sold 5 times more than the GC. But that's simply not the case. The GC had better hardware, sold 1/5 the amount as PS2 and was still much cheaper. :wink:

There are several factors that go into how cheap a console is to manufacture, we simply do not have all the details to make such a call yet.

OK so why are people saying that Sony will not sell the PS3 for $300? Going by your logic (which I think is correct) the fact that we don't have all the details could mean that everyone's $400+ predictions could possibly be wrong. And all those $500 predictions could be wrong too.

Obviously $300 could be a pipe dream, but like you said we don't have all the details yet to make that final call.

[one]

Please explain how owning your own Fab automatically equals lower cost.The more they make chips in their own fabs the cheaper those chips get as the depreciation of fab equipments proceed steadily. A very simple economic principle.

OTOH, in a fabless model such as Xbox 360, you are dependent on market dynamics. If a competitor offers a cheaper price tag, another foundry has to follow it. If foundries are reluctant at some stage, it doesn't get cheaper as time goes by. If you can't easily move your production to other foundries, there's even less possibility to pay less.

[valioso]

how much can they sell it for.. and how much it costs to produce are not always related

[expletive]

OTOH, in a fabless model such as Xbox 360, you are dependent on market dynamics. If a competitor offers a cheaper price tag, another foundry has to follow it. If foundries are reluctant at some stage, it doesn't get cheaper as time goes by. If you can't easily move your production to other foundries, there's even less possibility to pay less.

"dependendent on market dynamics" can also be "take advantage of market dynamics". Vendor price competition, advances in fab technology at other facilities besies your own, etc.

I'm sure that Sony figures it was worth building one or else they wouldnt have done it but thats not to say in every case it will be an advantage in the context of this discussion.

[Phil]

"dependendent on market dynamics" can also be "take advantage of market dynamics". Vendor price competition, advances in fab technology at other facilities besies your own, etc.

True, though vendors won't price below what it's costing them plus some profits, as it would defeat to whole purpose of running the fab in the first place. :wink:

[SirTendeth]

Hmmm... Would everyone agree that owning your own fab doesn't by DEFAULT make it cheaper in the short term, or long term?

Nor does outsourcing. Agree?

And ML would certainly have extensive knowledge of Sonys fab capabilities. It is thier proffesional oppinion. Nothing more, nothing less. History will show how close they were.(Not to say that every thing we think is historical, is factual.)

We can make predictions, and it is certainly more interesting when we back that up with sound reasoning. Yet I feel like things are slipping into absolutes for the sole purpose of being right. :)

I think both companies are likely to have teams devoted solely to cost management/Reduction, and therefore will rank it according to their corporate strategy/Finacial Capability.

My prediction is that the 360 will continualy hold a slight lead due to age, it being IMHO, the biggest uncontrollable factor.

[Alpha_Spartan]

What Ive learned here on the B3D Console forum is that generalizing opinion in such a dismissive and skewed manner (as you've done here) isnt usually the best way to promote conversation and civil debate. Disagreeing with a general sentiment without providing any nuance or addressing individual points by lazily phrasing the cadence of discussion as "pro Sony" or "pro MS" is simply false martyrdom, and very boring at that.
I wish I knew what the fuck you're talking about. Hell, I wish you knew what the fuck I was talking about before replying with that knee-jerk post.

[one]

"dependendent on market dynamics" can also be "take advantage of market dynamics". Vendor price competition, advances in fab technology at other facilities besies your own, etc.Sure, but it's not very clear in the Xbox 360 case as I wrote in the previous post (http://www.beyond3d.com/forum/showpost.php?p=614831&postcount=394) in this thread. The ICs in Xbox 360 stay state-of-the-art at least in 2005-2006 so they have to pay premium fee. Also you have to fight other customers of foundries. In market economy, if other customer can pay as much and fill state-of-the-art production facilities, the priority of investment by a foundry may go to technologies which are not applicable to Xbox 360. If MS wants to shrink chips aggressively, it will continue to be tough. Anyway, it's up to how much MS can lose, as ML suggests. 5 years? 10 years? Who knows.

Then why MS don't build or buy their fabs? It's because manufacturing semiconductors such as CCD and laser-diodes (http://www.sony.net/Products/SC-HP/pro/index.html) is not their business as london-boy wrote.

Hmmm... Would everyone agree that owning your own fab doesn't by DEFAULT make it cheaper in the short term, or long term?

Nor does outsourcing. Agree?Of course things happen so you can't say for sure about the future but at least PS2 was a success. Fabless companies, Sega and Nintendo could put cheaper price tags on their products, but they lost in the end, probably because of other reasons than manufacturing cost.

[Carl B]

I think the first half of this thread was "Do analysts know what they're talking about?", and the second half has become "Intricacies of fabbing."

All in all it's been a good thread with some good discussion that by all rights should never have made it this far based on the topic material.

Anyway on the vertical vs horizontal, I think the move definitely makes sense for Sony. PS3 provides a catalyst for them to build out this fab capacity, with some strong assurance of cost coverage in the future, but Cell and RSX production isn't the end-all be-all. Now having the new Nagasaki line in place, this is a fab that will be useful to them 10 years out, should Cell succeed or even should it fail. They'll always need chips, for PS4 (assuming there is one, right?), for their various CE devices (insourcing IC chip R&D and production is a new push for their CE division), and for any other of their own chips which they sell to others - digital camera chips being one strong one for them at the moment.

So I think the PS3/Cell provided the critical mass for the build-up, but now since reached, win or lose on Cell this fab capacity is going to be useful to them.

Remember that CE is a very high-volume field, and fab capacity gets soaked up if you're doing things right. The GPU comparisson has been made, but GPU's truly are a business more suited to outsourcing. NVidia and ATI simply do not have the capital for a modern fab investment; for them the risk would be enormous. With product cycles as they are better to have the flexibility to jump from fab to fab should a decisive advantage present itself or to contract out to multiple fabs should volume warrant it, all on a case by case basis.

[expletive]

Sure, but it's not very clear in the Xbox 360 case as I wrote in the previous post (http://www.beyond3d.com/forum/showpost.php?p=614831&postcount=394) in this thread. The ICs in Xbox 360 stay state-of-the-art at least in 2005-2006 so they have to pay premium fee. Also you have to fight other customers of foundries. In market economy, if other customer can pay as much and fill state-of-the-art production facilities, the priority of investment by a foundry may go to technologies which are not applicable to Xbox 360. If MS wants to shrink chips aggressively, it will continue to be tough. Anyway, it's up to how much MS can lose, as ML suggests. 5 years? 10 years? Who knows.

Then why MS don't build or buy their fabs? It's because manufacturing semiconductors such as CCD and laser-diodes (http://www.sony.net/Products/SC-HP/pro/index.html) is not their business as london-boy wrote.

Of course things happen so you can't say for sure about the future but at least PS2 was a success. Fabless companies, Sega and Nintendo could put cheaper price tags on their products, but they lost in the end, probably because of other reasons than manufacturing cost.

There are so many factors that go into what 'MS pays TSMC and what it costs Sony' to make chips that i dont think we can tie it up into a definitive advantage/disadvantage.

Youre right though MS wont build a fab because its not their core business, thats added risk to their strategy and its unnescessary. A large part of what MS is doing is paying fabs to assume that risk of being able to meet demand, and to deal with any problems that arise in the process.

"Fighting with other companies" isnt really a problem since MS has a demand, and then the fabs agree to meet that by a certain date, the end. MS may or may not know who else is using the fabs and probably doesnt care, as long as they get THEIR parts on THEIR timeline.

What if TSMC develops a process for producing ICs thats far superior to Sony and lowers relative costs by 30%? Then MS has an advantage. And vice-versa for Sony. In the fab business Sony is also a competitor for companies like TSMC, especially since Sony wants to sell cells to everyone. It behooves TSMC to be able to produce the products that compete with Cell as cheap as possible so people buy THOSE and NOT Cells.

And i would say that any Sega and Nintendo failures you mention are not 'probably' becuase of other reasons, but definitely becuase of other reasons.

[SirTendeth]

Sorry if what I posted was confusing. I was trying to lighten the focus on internal vs. outsourced Fabs.

To clarify it wasn't really future speculations that I was hoping we could avoid. But rather treating Fabrication as a singular Item, when it is in and of itself a broad industry. With all the complexities associated with being competitive in any mature industry.

And I don’t think there is any history that favors internal or outsourced fabrication. This may be why you see such a strong mix of companies using both.


Of course things happen so you can't say for sure about the future but at least PS2 was a success. Fabless companies, Sega and Nintendo could put cheaper price tags on their products, but they lost in the end, probably because of other reasons than manufacturing cost.

Low Fabrication costs provide their own type of win, as Nintendo has shown, but like you pointed out it didn't win the market penetration war- and their focus on price- at the expense of other areas- may have been a strong factor.

This is why I mentioned the Focus vs. Cost equation. Sometimes Cost is a predominant focus, and Ironically you can lose money by focusing to hard on just making it- see downsizing-.

I think Sony is focused on achieving a greater degree of positioning, as an all around Media/Entertainment Company (like Microsoft in the OS world). And if this is the case, they may subordinate their financials as much as possible given their capitol/credit capabilities, to achieve this goal.

[one]

What if TSMC develops a process for producing ICs thats far superior to Sony and lowers relative costs by 30%? Then MS has an advantage. And vice-versa for Sony. In the fab business Sony is also a competitor for companies like TSMC, especially since Sony wants to sell cells to everyone. It behooves TSMC to be able to produce the products that compete with Cell as cheap as possible so people buy THOSE and NOT Cells.Well, there are too many 'what if's in your sentences it seems. Where's that breakthrough tech for fabbing? Where's a super processor that eclipses Cell? If you have any concrete info, then some investor bank may be interested... :wink: if not, it's over.

[Hardknock]

At least i'm not the one who's been completely one-sided on any discussion we've ever had.

What does this mean? You are being one-sided right now, what is your point? I asked for clarifications with your comments, so obviously I'm open to differing opinions. As for you I'm not so sure...

What "signs" point to GC being "significantly cheaper" than PS2, if i may ask?
Because if anything, the "signs" are that PS2 (or PStwo) should be cheaper, (1) the EE and GS is one chip now at 90nm and has been for ages, compared to the 2 chip (Flipper+Gekko at a bigger manufacturing process, making the chips bigger than using 90nm process) solution of GC, therefore cheaper, (2) Sony's making the whole thing in house without many external clients to pay, (3) PS2 is older technology, (4) PS2 has sold 5 times as much as GC and keeps outselling it by god knows what margin, therofre economies of scale would dictate PS2 should be cheaper anyway.

The GC was made in 2001 with cheaper processes from the get go. Sony was selling the PS2 for $300 and losing money, while Nintendo was making money and selling GC for $250. Just because something came out before something else and is weaker doesn't automatically mean it's cheaper to manufacture. Remember Sony has to pay for DVD movie rights, a DVD drive, and chips for PS1 backwards compatibility. All things that Nintendo didn't have to worry about. Also lets not forget the BILLIONS that went into developing the EE and GS chips(remember they were envisioning it going into multiple appliances which it didn't) which they would need to recoup. As for fabbing yourself, that is a plus in one sense, but you also have to build the plants and manage everything yourself, which costs even more money you have to recoup. The PStwo has to use a relatively expensive laptop DVD drive. And looking at the PCB of the GC, it's much less complex than the PStwo board.

They are either equal or PStwo is cheaper, according to those "signs". Now if you have other "signs", i'd love to see them.
As i said, the fact that PS2 is more expensive in the shops has absolutely nothing to do with how much it costs to manufacture. It just means that Sony can sell it at that price, because people keep buying the bloody thing!! PS2 was even more expensive (in the shops) than Xbox at one point, and today i think they sell for the same price, that in no way means that PS2 costs more (or the same) to manufacture than Xbox.

Hey PStwo may be the same as GC to produce now, but neither of us know either way. And it's funny that the GC is more powerful, came out later, sold 1/5 as much and Sony is just now equaling it's manufacturing price(which personally I still think the GC is cheaper, but whatever.) Shoots a big hole in the "manufacturing in-house automatically makes your system cheaper" theory. :wink:

[mckmas8808]

I think Sony is focused on achieving a greater degree of positioning, as an all around Media/Entertainment Company (like Microsoft in the OS world). And if this is the case, they may subordinate their financials as much as possible given their capitol/credit capabilities, to achieve this goal.

Now if Sony wanted to position itself as the best all around Media/Entertainment Company (which I agree they are trying to do) would it be smart for them to put the most important part of this entertainment package out at twice the price of its nearest competitors price? Why would Sony charge $500 for the PS3 (the end all be all machine) at the sametime knowing that MS could cut $50 off of the core pack to charge $250? Wouldn't Sony realize that could not only directly hurt the PS3 hardware and software sales, but also hurt the income that the PS3 could pull through other mediums like Blu-ray movie sales and music and movie downloads on the PS3 from Sony:Connect?

If they price it too high they will never be the center of the living room.:???:

[SirTendeth]

Sony might think that they can get the consumers onboard at a higher price, much like they did against the GC and dreamcast.

The scale has just moved up.

Or they may feel that gambit won't work well against the 360, and will try to absorb the costs internally until they have met their goals, or until investor hemoraghing starts.

It's an elaborate chess game... and were all sports commentators.

And we are about as exciting sometimes ;)

[Phil]

Hardknock:

I actually just wrote a lengthy reply addressing nearly each and every sentance of yours but decided to write it all up again, since it really wouldn't help this thread much. In short, you're points are inaccurate on so many levels, I don't even know where to beginn.

Lets just say, you're comparing apples to oranges when you're comparing a console that launched in 2000 with a target price of $299 and a console that launched in late 2001 with a target price of $199. The point being, both had very different targets, one of which also influenced transistor budget which is a larger factor in console pricing/costs.

To make it short: PS2 launched on a very large process and with the very large chips as a result, naturally, PS2 was very expensive initially. I [u]never[/i] disagreed with nor did I ever state otherwise. What I did state however is that I am quite convinced that at the moment with PStwo on Sony's latest process is probably equal the GameCube's cost or cheaper to produce. This is obviously something Sony planned from the beginning when they decided to invest in fabs and launch a very large EE+GS back in 2000. The result was obviously massive losses initially which quickly turned into profits at a later time when they were able to shrink the process and later go onto 90nm and merge the EE and the GS into one single LSI.

In short, had Nintendo launched back in 2000 as Sony did with equal cost/pricing targets, GameCube would have been weaker - substantially - given the process would have been less advanced and the chips larger and thus costing more. It's only obvious that Nintendo decided to launch over a year later and benefit from more advanced processes in fabbing and thus more powerful hardware only comes naturally. Xbox is no different. You can also scale it the other way around: What if Sony had launched a year later using the latest processes as well? The result would be obviously more powerful hardware or equal hardware at a reduced costs - or simply slightly more powerful with still reduced costs - which is where I'd put GameCube.

Now, I obviously compared Sony's advantage of having their own fabs with PS3 with Xbox360 because they are both going for very similar targets: The CPUs and GPUs have roughly the same transistor budgets and they're using the same processes as well. Because Sony has their own fabs though, as I said, I do expect them to be in a very good position later on when they can successfully move on to a smaller process and have direct control over their costs/prices without any middleman wanting to earn money. Microsoft doesn't have this luxory - the vendors that are supplying them with the necessary chips do want to make a profit as well - and thus, each and every chip comes at a cost. On the other hand, as you said, they don't need to worry about risks, fab maintenance or effectively making the most out of fabs which is where Sony is spending money (in other words investing). If Sony can successfully use these fabs to their full capacity, they will have an advantage - and with PS2 being fabbed internally, PSP and soon to be PS3 - I'm sure they will have an advantage somewhere down the line. Obviously, if they hadn't and could get the chips cheaper from say IBM, they obviously would. They aren't, so I'm assuming they are for reasons we can only assume to be in their advantage. Simple logic, isn't it?

As for the rest you posted about GC and PS2 hardware: You forgot to factor in that Sony is apart of the DVD forum, dvd-movie licencing is peanuts, GameCube has a drive as well (same mechanics, same laser), the PSone chips (it's only 1 chip!) are not simply wasted for backwards-compatibilty but is recycled in the way that it is used as an Input-Output-Chip - something the GameCube has too! Also EE & GS R&D did not cost billions - what cost billions were fab investments that Sony Group as a whole is going to use to their advantage as is PS2, PStwo, PSP and soon to be PS3.

Anyway, as I said - no one is arguing that PS2 was cheaper to manufacure than GameCube, what I did say is that PStwo in its last incarnation on the 90nm process with a merged EE+GS as a single chip is most likely cheaper than GameCube.

[Hardknock]

Hardknock:

I actually just wrote a lengthy reply addressing nearly each and every sentance of yours but decided to write it all up again, since it really wouldn't help this thread much. In short, you're points are inaccurate on so many levels, I don't even know where to beginn.

Lets just say, you're comparing apples to oranges when you're comparing a console that launched in 2000 with a target price of $299 and a console that launched in late 2001 with a target price of $199. The point being, both had very different targets, one of which also influenced transistor budget which is a larger factor in console pricing/costs.

To make it short: PS2 launched on a very large process and with the very large chips as a result, naturally, PS2 was very expensive initially. I [u]never[/i] disagreed with nor did I ever state otherwise. What I did state however is that I am quite convinced that at the moment with PStwo on Sony's latest process is probably equal the GameCube's cost or cheaper to produce. This is obviously something Sony planned from the beginning when they decided to invest in fabs and launch a very large EE+GS back in 2000. The result was obviously massive losses initially which quickly turned into profits at a later time when they were able to shrink the process and later go onto 90nm and merge the EE and the GS into one single LSI.

In short, had Nintendo launched back in 2000 as Sony did with equal cost/pricing targets, GameCube would have been weaker - substantially - given the process would have been less advanced and the chips larger and thus costing more. It's only obvious that Nintendo decided to launch over a year later and benefit from more advanced processes in fabbing and thus more powerful hardware only comes naturally. Xbox is no different. You can also scale it the other way around: What if Sony had launched a year later using the latest processes as well? The result would be obviously more powerful hardware or equal hardware at a reduced costs - or simply slightly more powerful with still reduced costs - which is where I'd put GameCube.

Now, I obviously compared Sony's advantage of having their own fabs with PS3 with Xbox360 because they are both going for very similar targets: The CPUs and GPUs have roughly the same transistor budgets and they're using the same processes as well. Because Sony has their own fabs though, as I said, I do expect them to be in a very good position later on when they can successfully move on to a smaller process and have direct control over their costs/prices without any middleman wanting to earn money. Microsoft doesn't have this luxory - the vendors that are supplying them with the necessary chips do want to make a profit as well - and thus, each and every chip comes at a cost. On the other hand, as you said, they don't need to worry about risks, fab maintenance or effectively making the most out of fabs which is where Sony is spending money (in other words investing). If Sony can successfully use these fabs to their full capacity, they will have an advantage - and with PS2 being fabbed internally, PSP and soon to be PS3 - I'm sure they will have an advantage somewhere down the line. Obviously, if they hadn't and could get the chips cheaper from say IBM, they obviously would. They aren't, so I'm assuming they are for reasons we can only assume to be in their advantage. Simple logic, isn't it?

As for the rest you posted about GC and PS2 hardware: You forgot to factor in that Sony is apart of the DVD forum, dvd-movie licencing is peanuts, GameCube has a drive as well (same mechanics, same laser), the PSone chips (it's only 1 chip!) are not simply wasted for backwards-compatibilty but is recycled in the way that it is used as an Input-Output-Chip - something the GameCube has too! Also EE & GS R&D did not cost billions - what cost billions were fab investments that Sony Group as a whole is going to use to their advantage as is PS2, PStwo, PSP and soon to be PS3.

Anyway, as I said - no one is arguing that PS2 was cheaper to manufacure than GameCube, what I did say is that PStwo in its last incarnation on the 90nm process with a merged EE+GS as a single chip is most likely cheaper than GameCube.

Wow, great synopsis! :razz: It's cool when people can discuss/debate things without it getting personal. I pretty much agree with all your points, I was just pointing out that nothing is for certain and it's not impossible for Xbox 360 to be cheaper to manufacture than PS3 over the course of next-gen. Certainly for Sony to even get on the same level as MS it will take several years, tremendous sales and several refreshes. I'd say for the next few years atleast, MS will have a lot more flexibility when it comes to pricing, wouldn't you agree?

[Inane_Dork]

Don't you go around telling people how to post.You do see the irony here, right? :p



It's an elaborate chess game... and were all sports commentators.I call Madden.

"Well, see here what we have is good chess. Good chess is when good chess players play chess in the way only they know how. This player here in the hastily drawn white circle on the Replaycam is my kind of player. Look, we've only had 4 moves and he's already bleeding and grass stained."

[mckmas8808]

Wow, great synopsis! :razz: It's cool when people can discuss/debate things without it getting personal. I pretty much agree with all your points, I was just pointing out that nothing is for certain and it's not impossible for Xbox 360 to be cheaper to manufacture than PS3 over the course of next-gen. Certainly for Sony to even get on the same level as MS it will take several years, tremendous sales and several refreshes. I'd say for the next few years atleast, MS will have a lot more flexibility when it comes to pricing, wouldn't you agree?

Well I certainly agree with that. *raises hand*

[nelg]

I didn't say that owning a fab automatically equals lower costs. Actually, it should be more than obvious what advantage owning your own fab can have. As I explained further above, seeing PS2 & PSP production and PS3 to continue this trend, it's obviously cheaper for Sony as a whole.

If you disagree with this, please explain with what exactly and/or state why.

You were the one who said that there are obvious advantages to owning your own fab without taking into account the possible downside. It is not so simple as to say we can make it cheaper if we do it ourselves. There are far to many factors for it to be so simplistic. As Gubbi mentioned, Fabs are expensive. To be profitable you need near 100% utilization. Sales projections of Cell processors would not be accurate to within 20%. That margin could be the difference between a fully utilized Fab plant which would be profitable and one that would not. Furthermore to assume that just by removing a third party you automatically acquire their profit for yourself is just that an assumption. Business is ripe with cases where a product is offered at or slightly below cost to guarantee cash flow. Is it unfathomable to think that a contract Fab like TSMC might give someone like MS a deal at cost if they guarantee to buy 50% of their .65nm production capacity? The benefit to them is that they could use the scale provided by that deal to lower there cost and gain a higher margin for the remaining capacity. Again this is all speculation but such things happen all the time.

One,

Depreciation expensing is something all companies can take advantage from. Not just Sony. Do you think that Contract Fabs keep the same prices year over year?

[SirTendeth]

Inane- that was to funny...

Could you give a play by play, showing Maddens confusion in whether he is analyzing Chess or Checkers? please!

;)

[Phil]

nelg:

You were the one who said that there are obvious advantages to owning your own fab without taking into account the possible downside.

Hold on for a second; I did state that I was speaking on behalf of their advantage. Just because I didn't touch on the possible downside (which I did in other replies, just not in the one directed at you) doesn't mean I don't see them likely as well. Obviously there are many IF-scenario's, heck we can even think up some scenario in which an earthquake destroys all the fabs Sony has but I don't think they have much room in this topic. As I already said; I'm using the basis of the successful PS2->PStwo transistion as a baseline to form that Sony can gain quite an advantage (if all goes well) with PS3 and the point that CELL is (can) to be used in various different products where CELLs with less than 7 SPEs can still be used which will drive down the defection rate opposed to Xenon where this is not possible.

[expletive]

Well, there are too many 'what if's in your sentences it seems. Where's that breakthrough tech for fabbing?

However, my post was not to make an argument for an outsourced fab model or otherwise, just to show why its not ALWAYS the best solution regardless of the products and doesnt always guarentee youre getting the cost for your chips. Sorry if that didnt come across. It doesnt have to be a technological breakthrough (though it could) it could be anything to processes, efficiency, lower costs, lower labor costs to run the plant, etc. All these things add up to being able to sell for 'less'

Where's a super processor that eclipses Cell? If you have any concrete info, then some investor bank may be interested... :wink: if not, it's over.

The assumption that anything but the PS3 will need the power of an 8:1 cell is really whats up for debate. Theres a lot of other threads on the forum debating whether or not the Cell will ever make it into a TV, Sony or otherwise becuase its 'overkill' compared to a cheaper, dedicated IC that performs the same NECESSARY functions. My point here was that the cheaper TSMC could make those competing dedicated ICs, the better the chance they have to get a huge order for them. Thats their incentive and thats why in the fab business they are a competitor of Sony's.

[one]

Depreciation expensing is something all companies can take advantage from. Not just Sony. Do you think that Contract Fabs keep the same prices year over year?Do you mean in terms of the vertical/horizontal model in general, or do you mean the specific cases for the next-gen game consoles? If the former, I agree with SirTendeth. If the latter, I'd like to ask you this question (http://www.beyond3d.com/forum/showpost.php?p=614831&postcount=394) I wrote in this thread. Intel continue to build fabs, and it's been a great success so far.

[mckmas8808]

The assumption that anything but the PS3 will need the power of an 8:1 cell is really whats up for debate. Theres a lot of other threads on the forum debating whether or not the Cell will ever make it into a TV, Sony or otherwise becuase its 'overkill' compared to a cheaper, dedicated IC that performs the same NECESSARY functions. My point here was that the cheaper TSMC could make those competing dedicated ICs, the better the chance they have to get a huge order for them. Thats their incentive and thats why in the fab business they are a competitor of Sony's.

Well Toshiba has already said they will use them in TVs so....

[scooby_dooby]

So what?

That was nearly a full year ago, and they have not begun using them at all. Until we actually start seeing it used his point stands, and is actually bolstered by the fact Toshiba seems to be backing away from their promise of all TV's in 2006 to be CELL based...

[nelg]

Do you mean in terms of the vertical/horizontal model in general, or do you mean the specific cases for the next-gen game consoles? If the former, I agree with SirTendeth. If the latter, I'd like to ask you this question (http://www.beyond3d.com/forum/showpost.php?p=614831&postcount=394) I wrote in this thread. Intel continue to build fabs, and it's been a great success so far.

Do you mean amortize as opposed to depreciate? Anyways, Intel has a different market reality. One of the strengths of Intel is their fabrication abilities. How would be advanced neough to fab chips for Intel? Look for Arron Spink's post to this regard. If Intel overestimates production requirements they would not over-saturate the x86 market by a considerable degree. Whereas Cell outside of the PS3 does not have an established market so the impact of overcapacity is unknown.

[Phil]

Nelg,

Assuming Sony's success rate doesn't change and we expect them to sell around 70 million PS3 within 5 years - wouldn't that be enough in your opinion? Also, during this time, also expect full scale production of PSP chips as well...

Also, if they do have overcapacity, what's stopping Sony to use manufactured CELL chips for products such as TV, Hifi? If the chips are lying around (albeit defective for use in a PS3 because more than 1 SPE is defect), better to use them in products you intend to put on the market anyway?

[nelg]

nelg:



Hold on for a second; I did state that I was speaking on behalf of their advantage. Just because I didn't touch on the possible downside (which I did in other replies, just not in the one directed at you) doesn't mean I don't see them likely as well.

You conveniently omitted the possible downsides while stating that it was an obvious advantage. Does IBM have an obvious advantage making their own chips? When was the last time their foundry business made money?

[Carl B]

Do you mean amortize as opposed to depreciate? Anyways, Intel has a different market reality. One of the strengths of Intel is their fabrication abilities. How would be advanced neough to fab chips for Intel? Look for Arron Spink's post to this regard. If Intel overestimates production requirements they would not over-saturate the x86 market by a considerable degree. Whereas Cell outside of the PS3 does not have an established market so the impact of overcapacity is unknown.

Nelg I don't know if you caught this post of mine before, but I think it's relevent to the question of whether vertical integration makes sense for Sony.

I think the move definitely makes sense for Sony. PS3 provides a catalyst for them to build out this fab capacity, with some strong assurance of cost coverage in the future, but Cell and RSX production isn't the end-all be-all. Now having the new Nagasaki line in place, this is a fab that will be useful to them 10 years out, should Cell succeed or even should it fail. They'll always need chips, for PS4 (assuming there is one, right?), for their various CE devices (insourcing IC chip R&D and production is a new push for their CE division), and for any other of their own chips which they sell to others - digital camera chips being one strong one for them at the moment.

So I think the PS3/Cell provided the critical mass for the build-up, but now since reached, win or lose on Cell this fab capacity is going to be useful to them.

Remember that CE is a very high-volume field, and fab capacity gets soaked up if you're doing things right. The GPU comparisson has been made, but GPU's truly are a business more suited to outsourcing. NVidia and ATI simply do not have the capital for a modern fab investment; for them the risk would be enormous. With product cycles as quick they are, better to have the flexibility to jump from fab to fab should a decisive advantage present itself, or to contract out to multiple fabs should volume warrant it - all on a case by case basis.

[Phil]

You conveniently omitted the possible downsides while stating that it was an obvious advantage. Does IBM have an obvious advantage making their own chips? When was the last time their foundry business made money?

As I said, I noted them in other replies. Also, my posts were in reply to people arguing the disadvantages of having your own fab - naturally by disagreeing, I was taking a stance from the opposition (hence my emphasis on the advantages and not bringing something up others had already before you decided to jump in on what, page 15?). Now, are you going to continue taking this to a personal level or are you going to stay on topic and address the points I and others have brought up instead? :roll:

[one]

Do you mean amortize as opposed to depreciate? Anyways, Intel has a different market reality. One of the strengths of Intel is their fabrication abilities. How would be advanced neough to fab chips for Intel? Look for Arron Spink's post to this regard. If Intel overestimates production requirements they would not over-saturate the x86 market by a considerable degree. Whereas Cell outside of the PS3 does not have an established market so the impact of overcapacity is unknown.Intel manufacture many kinds of semiconductor components at their fabs for their own platform business.

http://www.intel.com/pressroom/archive/releases/20050915corp.htm
Both fabs are 200mm facilities that produce primarily chipsets communications and flash memory components for a variety of Intel platforms.

[expletive]

Well Toshiba has already said they will use them in TVs so....

That was REALLY peripheral to the main point, but ok.

[scooby_dooby]

Nelg,

Assuming Sony's success rate doesn't change and we expect them to sell around 70 million PS3 within 5 years - wouldn't that be enough in your opinion? Also, during this time, also expect full scale production of PSP chips as well..

Why would their success rate not change? With a huge competitor like the XBOX360 it would be a miracle if Sony has the same level of success that they had with PS2.

The best Sony can hope for IMO is to retain a 10-20% lead in overall consoles sold, and even those are lofty goals IMO.

[dantruon]

Why would their success rate not change? With a huge competitor like the XBOX360 it would be a miracle if Sony has the same level of success that they had with PS2.

The best Sony can hope for IMO is to retain a 10-20% lead in overall consoles sold, and even those are lofty goals IMO.

ahhahah, that really make me laugh hard, ahahahah, ok i agreed with you that xbox360 might be a success in North America but and is a really big but, it will sell like crap in Japan, you wont see Japanese who bought 400 xbox per week to 400000 per week anytime soom after the launch.

[nelg]

As I said, I noted them in other replies. Also, my posts were in reply to people arguing the disadvantages of having your own fab - naturally by disagreeing, I was taking a stance from the opposition (hence my emphasis on the advantages and not bringing something up others had already before you decided to jump in on what, page 15?). Now, are you going to continue taking this to a personal level or are you going to stay on topic and address the points I and others have brought up instead? :roll:

I must have missed your disclaimer that you must read all your post to ascertain your point. Perhaps if you refrained from making absolute statements they wont go unchallenged. To illustrate my point look at this post.
True, though vendors won't price below what it's costing them plus some profits, as it would defeat to whole purpose of running the fab in the first place. :wink:

By that logic IBM must stupid because the did contract work for nV and others and still lost money. Therefore they priced their services below cost. Must have been the HP calculators used in the accounting dept.

[ihamoitc2005]

Please explain how owning your own Fab automatically equals lower cost.

There are many advantages to owning fab facility.

Company has more control over quality, manufacturing process and hardware changes, change in production volume, and have more opportunities to review and adjust many steps in process. This leads to reduced cost, but having fab capability also reduces cost, as said by others, by not paying middle-men. Owning fab facility is good for a large company like Sony with many years experience in manufacturing and many products that benefit from fab capability.

Disadvantage is for companies with limited product line which results in very high percentage of assets locked up in fab facility so change in demand for one product makes big difference in total output of facility and hence big difference in contribution of the facility to company's bottom-line.

As for GameCube vs PS2 manufacturing cost, originally, GameCube had smaller chip and simpler case, but now that PS2 has a very small 90nmchip (originally multiple 250nm), no sliding drive and small, simple case, it is fair assumption that PS2 is less costly to produce. Higher selling price of PS2 is due to higher demand. Only if sales at higher price drop such that increased sales at lower price also increases profits, or if there is strategic advantage to lower price, PS2 price will not come down.

Not including development cost, software sales, and marketing, I feel the slim PS2 can be manufactured and sold at the $49 price with profit.

[Hardknock]

Not including development cost, software sales, and marketing, I feel the slim PS2 can be manufactured and sold at the $49 price with profit.

So you believe the PStwo costs about the same or less than a GBA to produce? :shock:

[Hardknock]

I'm really just dumb-founded by this new revelation... The PStwo sells over 10+ million a year. That means if what iham says is true, Sony is making over $1 BILLION in profit on hardware alone. Not even including licensing and software sales.

For some reason I don't find that likely, just call it a hunch :wink:

[Panajev2001a]

Why would their success rate not change? With a huge competitor like the XBOX it would be a miracle if Sony has the same level of success that they had with PSOne.

The best Sony can hope for IMO is to retain a 10-20% lead in overall consoles sold, and even those are lofty goals IMO.

I do not claim I can predict the future, but saying that a 10% lead is a LOFTY goal, the best Sony can ever wish for and something that is quite more of a dream than reality as you seem to be saying... well, you are selling the bear's skin before having killed the bear ;).

Let's see if they can play in the Western areas a good catchup game against the Xbox 360 that is shipping earlier and they can keep their presence n the Japanese market by taking over quickly once they launch.

It is not going to be easy, but I see this as an incentive for all the players to appease their consumer base even more :D.

Let's enjoy all the next-generation consoles, while waiting for the next-next-generation ones to arrive :D.

[BTOA]

I'm really just dumb-founded by this new revelation... The PStwo sells over 10+ million a year. That means if what iham says is true, Sony is making over $1 BILLION in profit on hardware alone. Not even including licensing and software sales.

For some reason I don't find that likely, just call it a hunch :wink:
If you take out all the cost from the PSTwo then $1 Billion is possible. ;)

[scooby_dooby]

I do not claim I can predict the future, but saying that a 10% lead is a LOFTY goal, the best Sony can ever wish for and something that is quite more of a dream than reality as you seem to be saying... well, you are selling the bear's skin before having killed the bear ;).

Let's see if they can play in the Western areas a good catchup game against the Xbox 360 that is shipping earlier and they can keep their presence n the Japanese market by taking over quickly once they launch.

It is not going to be easy, but I see this as an incentive for all the players to appease their consumer base even more :D.

Let's enjoy all the next-generation consoles, while waiting for the next-next-generation ones to arrive :D.

Well we're all entitled to our opinion. I see MS taking a substantial lead in the USA and Canada this round, an early 10-15million console lead that Sony will never be able to catch up.

Sony will win Japan easily since they will get much more japanese style games.

Europe is the big question, Sony will have to beat MS soundly to retain their global lead in consoles sold, and I don't know how likely that is, more likely that they do do better in europe but not by a huge margin.

I think we'll end up roughly half and half at the end of this gen taking the 3 regions into account, if sony were to maintain a 10-20% lead that would be a success for them IMO.

[blakjedi]

If you take out all the cost from the PSTwo then $1 Billion is possible. ;)

no. How do you ignore the cost of manufacture, assembly, distribution, shipping, warehousing, marketing warehousing....

Unless you are talking about $1 billion in profits over the life of ps2/pstwo then ok.

[mckmas8808]

no. How do you ignore the cost of manufacture, assembly, distribution, shipping, warehousing, marketing warehousing....

Unless you are talking about $1 billion in profits over the life of ps2/pstwo then ok.

Well I think he meant if you take out the cost to make, store, and advertise the PStwo then you will get $1 billion dollars.

[Phil]

Well we're all entitled to our opinion. I see MS taking a substantial lead in the USA and Canada this round, an early 10-15million console lead that Sony will never be able to catch up.

Sony will win Japan easily since they will get much more japanese style games.

Europe is the big question, Sony will have to beat MS soundly to retain their global lead in consoles sold, and I don't know how likely that is, more likely that they do do better in europe but not by a huge margin.

I think we'll end up roughly half and half at the end of this gen taking the 3 regions into account, if sony were to maintain a 10-20% lead that would be a success for them IMO.

Hold on for a second, after Sony has more or less outsold the Xbox by 4 to 1 this generation, you really believe Sony should be lucky to attain a 10-20% lead after next generation? :lol: Yeah, right. I see all the Sony happy owners outthere jumping onto Xbox360 based on.... err..... yeah, franchises that were already around on Xbox yet didn't interest any beyond the Xbox userbase at the time. I can also see them magically ignoring all the PlayStation known franchises as well...

It's all 2000 again. We shall see. :lol:

[mckmas8808]

Hold on for a second, after Sony has more or less outsold the Xbox by 4 to 1 this generation, you really believe Sony should be lucky to attain a 10-20% lead after next generation? :lol: Yeah, right. I see all the Sony happy owners outthere jumping onto Xbox360 based on.... err..... yeah, franchises that were already around on Xbox yet didn't interest any beyond the Xbox userbase at the time. I can also see them magically ignoring all the PlayStation known franchises as well...

It's all 2000 again. We shall see. :lol:

Yeah I know right. All of a sudden Sony has lost everything that made them good. Why is it that MS doesn't have to prove anything, yet when Sony has already proved itself for 10 years people still don't have no respect?:???: Sony has more PS2 in each territory then MS has in the world. They have done that with the PSone and PS2, yet people think all of those 190 million (closing in on 200 million) Playstation owners just won't care about their well known franschises.

And Sony still tell this day doesn't get the respect that they deserve. The PSone had many great franchises like MGS, Gran Turismo, Tekken, main FFs series and the like yet people don't realize that they hit the world with more franchises with the PS2. The PS2 created new franchises like Socom, Rachet and Clank, Sly Cooper, Jak and Daxter, Devil May Cry, God of War, SOTC, Singstar games, The Getaway, Killzone, and the like.

Yet for some reason some people think that just because the 360 is coming out first MS will now have just as many great franchises and that the 360 will close the gap tremendosly. Should I remind you guys that most of those franchises that I named above are games made or published by Sony themselves. Why will Sony all of a sudden forget how to make hits? I think game devs like Ninja Theory is what Sony will continue to have to make BIG hits like hopefully Heavenly Sword will be. Hopefully in 2010 we will have Heavenly Sword 3: The Revenge of the Ninjas or something like that.

So to scooby_dooby why are you giving MS this free road?

Disclaimer: I am not attacking scooby_dooby about his opinion, just on how he came up with that opinion. You shouldn't skin the bear before it's dead. Again this is not an attack.

[Hardknock]

EVERY new generation people start over at Square ONE. You don't automatically obtain the same userbase. Sure there are the diehards that you see on the internet, but the majority of people just go where the games are. It's that simple. By the time Xbox came out, PS2 had sold 20 million units. That is quite a bit of momentum. This time PS3 won't have that advantage and may be more expensive aswell. This will not be as cut and dry as a lot of people want to think.

[mckmas8808]

EVERY new generation people start over at Square ONE. You don't automatically obtain the same userbase. Sure there are the diehards that you see on the internet, but the majority of people just go where the games are. It's that simple. By the time Xbox came out, PS2 had sold 20 million units. That is quite a bit of momentum. This time PS3 won't have that advantage and may be more expensive aswell. This will not be as cut and dry as a lot of people want to think.

Not saying it's cut and dry just looking at the facts from past history. The Playstation has never came out first. You need to read what's on this website http://www.1up.com/do/feature?cId=3145154.

Then after that read this http://www.1up.com/do/feature?pager.offset=1&cId=3145154.


There are plenty of reason on that first website page that shows what can happen. Now obviously the second page has some good things about MS. Yet can MS really close that 70 million unit gap that Sony has had with both the PSone and PS2 with just the X360?

[avaya]

Well we're all entitled to our opinion. I see MS taking a substantial lead in the USA and Canada this round, an early 10-15million console lead that Sony will never be able to catch up.

Sony will win Japan easily since they will get much more japanese style games.

Europe is the big question, Sony will have to beat MS soundly to retain their global lead in consoles sold, and I don't know how likely that is, more likely that they do do better in europe but not by a huge margin.

I think we'll end up roughly half and half at the end of this gen taking the 3 regions into account, if sony were to maintain a 10-20% lead that would be a success for them IMO.

I think this is rather optimistic.

Japan is very difficult for Microsoft. I think Nintendo could pull off something there with regards to PS3.

Europe is also very much like Japan for Sony. I would be totally shocked if Microsoft got remotely close to Sony in Europe.

NA is the only real contest this next generation. I honestly cannot predict who will take that market, but I don't see any competitor winning that market by a significant margin.

Those are my "predictions", I won't say I'm 100% confident about any of them :)

[scooby_dooby]

Sure there are the diehards that you see on the internet, but the majority of people just go where the games are. It's that simple. By the time Xbox came out, PS2 had sold 20 million units. That is quite a bit of momentum.

Exactly.

The big flaw I see in XBD and Phil's logic is that of the 70million or so PS2 owners, 100% of them are die hards. It's not the case. A small percentage of those are die-hards, the vast majority simply bought it for the GAMES.

So lets take a look at what consumers really care about, Game Library and Costs. Brand Loyalty is not a determining factor here, you guys like to use precedants set in history alot, so why not take a look at how little brand loyalty has really mattered?

Sony has never faced a competitor like the X360 before, and the #1 reason why is 3rd party developer support. In addition MS is investing extremely heavily in 1st party titles, as can be seen by them creating studios like Real Time Worlds from the creator of GTA, Mistwalker studios from the father of FF, and purchasing heavy weights like RARE, and the list really does go on....

Some people insistance to compare X360 to XBOX, or even dreamcast, really shows how they are not taking a clear look at the situtation, and completely underestimating the type of competition X360 will be offering.

Casual consumers care about game library & price, that's it, bottom line.

The reason I believe Sony will be luck to get a 10-20% lead is because the X360 is going to have an EXTREMELY strong game library, it will have variety and a good selection of AAA titles. It will also be cheap. It's going to drop in price very fast, I believe it's MS's strategy to capitalize on this, their key advantage.

I think you'll also see 3rd party developers begin to develop for the X360 primarily as it carries the lead through 2006, 2007 and likely into 2008. X360 will have a greater installed base, and an easier programming environment with better software. I wouldn't be surprised if by the time we get to 2008 there are still more games on X360 as it becomes the development platform of choice.

It's all about the games, it's all about whether, over the next 3 years, developers decide to bet on Sony and it's eventual installed base(2008-2009) or decide to support the X360 with it's greater installed base and better programming tools.

The 3rd part Dev's will decide this, as well as the 1st party smash-hits from both companies, those are wildcards.

Also, I believe Live! to be somewhat of an X-factor here, it may or may not become a huge driver this generation, and it could be the one thing many people are counting out. But when we look back in 5 or 6 years, Live just might be the feature that really put MS over the top.

But that's just my opinion...:twisted:

[ROG27]

EVERY new generation people start over at Square ONE. You don't automatically obtain the same userbase. Sure there are the diehards that you see on the internet, but the majority of people just go where the games are. It's that simple. By the time Xbox came out, PS2 had sold 20 million units. That is quite a bit of momentum. This time PS3 won't have that advantage and may be more expensive aswell. This will not be as cut and dry as a lot of people want to think.

That used to be the case....but since Backwards Compatibility came into the picture, previous gen installed userbase is HUGE to the success of the next-gen.

[mckmas8808]

Exactly.

The big flaw I see in XBD and Phil's logic is that of the 70million or so PS2 owners, 100% of them are die hards. It's not the case. A small percentage of those are die-hards, the vast majority simply bought it for the GAMES.

So lets take a look at what consumers really care about, Game Library and Costs. Brand Loyalty is not a determining factor here, you guys like to use precedants set in history alot, so why not take a look at how little brand loyalty has really mattered?

Sony has never faced a competitor like the X360 before, and the #1 reason why is 3rd party developer support. In addition MS is investing extremely heavily in 1st party titles, as can be seen by them creating studios like Real Time Worlds from the creator of GTA, Mistwalker studios from the father of FF, and purchasing heavy weights like RARE, and the list really does go on....

Some people insistance to compare X360 to XBOX, or even dreamcast, really shows how they are not taking a clear look at the situtation, and completely underestimating the type of competition X360 will be offering.

Casual consumers care about game library & price, that's it, bottom line.

The reason I believe Sony will be luck to get a 10-20% lead is because the X360 is going to have an EXTREMELY strong game library, it will have variety and a good selection of AAA titles. It will also be cheap. It's going to drop in price very fast, I believe it's MS's strategy to capitalize on this, their key advantage.

I think you'll also see 3rd party developers begin to develop for the X360 primarily as it carries the lead through 2006, 2007 and likely into 2008. X360 will have a greater installed base, and an easier programming environment with better software. I wouldn't be surprised if by the time we get to 2008 there are still more games on X360 as it becomes the development platform of choice.

It's all about the games, it's all about whether, over the next 3 years, developers decide to bet on Sony and it's eventual installed base(2008-2009) or decide to support the X360 with it's greater installed base and better programming tools.

The 3rd part Dev's will decide this, as well as the 1st party smash-hits from both companies, those are wildcards.

Also, I believe Live! to be somewhat of an X-factor here, it may or may not become a huge driver this generation, and it could be the one thing many people are counting out. But when we look back in 5 or 6 years, Live just might be the feature that really put MS over the top.

But that's just my opinion...:twisted:

I see your point scooby, but for your theory to become true the PS3 will have to lose one of its biggest advantages. And that is franchise creation. Didn't the PSone and PS2 have the biggest and most varied libaries in the past 10 years? What is stopping Sony from capturing and creating those great franchises themselves?

Why is it that just because the X360 was lots of great devs on board that, that equals loses on the side of the PS3 and its franchises? Yes you are right the X360 will have great 3rd party support and it will have plenty of great franchises too, but don't you believe that Sony themselves have already proved that they can publish/make great franchises too?

What's stopping Sony from having its same great 3rd party games that its always had? What's stopping Sony from making new franchises like they did when they went from the PSone -> PS2?

[mckmas8808]

The best Sony can hope for IMO is to retain a 10-20% lead in overall consoles sold, and even those are lofty goals IMO.

Huh? What? How? Why? Just huh what? So if the PS3 sells lets say 100 million consoles (I can say this because its predesesors have shown it's possible), then you are then believe that the Xbox 360 will sell 85 to 90 million consoles. :shock:

Wow! That's something that no other console maker has done whos name is not Sony.

[expletive]

What is stopping Sony from capturing and creating those great franchises themselves?

Why is it that just because the X360 was lots of great devs on board that, that equals loses on the side of the PS3 and its franchises? Yes you are right the X360 will have great 3rd party support and it will have plenty of great franchises too, but don't you believe that Sony themselves have already proved that they can publish/make great franchises too?

What's stopping Sony from having its same great 3rd party games that its always had? What's stopping Sony from making new franchises like they did when they went from the PSone -> PS2?

I think the obvious answer here is the development costs of the PS3. We're already hearing grumblings from developers and if the 360 can gain the installed-base momentum that Laa-Yosh talks about earlier in this thread (great post but i think those numbers are unlikely) getting the best software for the PS3 may be more difficult than Sony thinks. When the whole MS strategy is about costs, cost for the consuemrs, the developers, its hard to argue against the almighty dollar.

When you think about it, Sony has built a cost-is-no-object console. Theyve got what has been reported as inferior and extremely pricey development tools/costs. Does this take its toll at some point?

I'm not syaing any of this WILL happen or even that I think it will. Just answering your questions about what's 'stopping Sony'.

[expletive]

Sure there are the diehards that you see on the internet, but the majority of people just go where the games are. It's that simple. By the time Xbox came out, PS2 had sold 20 million units. That is quite a bit of momentum. This time PS3 won't have that advantage and may be more expensive aswell. This will not be as cut and dry as a lot of people want to think.

Just some anecdotal evidence. One of the things I do in real life is manage a help desk of about 10 people. 8 of them are young guys who are gamers. 2 are MS guys and the rest are either Sony or 'undeclared'. The MS guys and Sony guys go back and forth from time to time but nothing as harsh as what we see on this forum. :) On Friday, one of the guys asked everyone to gather around his desk and he showed them the HD NBA 2k6 trailer. All they could say was 'wow'. All the Sony guys asked when it was coming out and how much the system was, after finding out, all but ONE of them said 'i'm buying that, i'm not waiting until next christmas'. (an undeclred guy later went nuts over the PGR3 video and added his name to the 'i'm buying one' list)

OBviously a very small sampling but i think its true that a vast majority of the gamers out there are 'up for grabs' so to speak. If the competition is compelling enough i dont think the past matters as much as you all think. I think since most of the people in THESE forums are diehards for a brand they tend to assume everyone feels that way about their console.

[mckmas8808]

I think the obvious answer here is the development costs of the PS3. We're already hearing grumblings from developers and if the 360 can gain the installed-base momentum that Laa-Yosh talks about earlier in this thread (great post but i think those numbers are unlikely) getting the best software for the PS3 may be more difficult than Sony thinks. When the whole MS strategy is about costs, cost for the consuemrs, the developers, its hard to argue against the almighty dollar.

When you think about it, Sony has built a cost-is-no-object console. Theyve got what has been reported as inferior and extremely pricey development tools/costs. Does this take its toll at some point?

I'm not syaing any of this WILL happen or even that I think it will. Just answering your questions about what's 'stopping Sony'.

Thanks expletive for a very fair response. *raises thumb up to the sky* See the problem is this. It has not been proven that games being developed for the PS3 will cost way more than making a game for the X360. Hell we haven't even heard all that much about games being developed for the PS3 due to its earlyness and NDAs.

To be fair expletive you are taking what some precieve as a internet myth and sort of in a small way making it a true statement. I'll wait until the Sony releases it's final game sheet for upcoming games to see if your theory is correct.

Just because Sony hasn't released as much information about the PS3 doesn't mean that it will lose franchises. And if development cost was the main factor for great franchises shouldn't the GC have had the best game this gen?

[Mefisutoferesu]

Scooby, can I ask for a rather long winded favor? Would you list all the games that have been announced for Xbox360? Maybe even order them by genre? I'm, frankly, too lazy and you're probably a lot more aware of what's been announced than I am. I'd ask for dates also, but that's a bit excessive. The reason I'm asking is I honestly don't see this large and diverse library for 360 we keep talking about. Surely, the 360 is getting better support than the Xbox got, but looking back that not all that hard. Perhaps, I'm just stuck comparing meaningfully diverse (in other words, interesting to ME) as opposed to diverse in a general sense. What I'm trying to say is I, for some reason or other, can't see that gaming rainbow everyone else sees. I dunno, I guess, all I see is Mistwalker. After that, the support feels no different than what Xbox had, which everyone seems to disagree with me on, but I just don't see anything else. Yeah, square-enix, but a, what?, 3 year old game isn't exactly what I call a win. Frankly, once FFXII comes out FFXI won't mean much to any of the fans, least that's how I feel.

In other words, someone enlighten me! Show me the gaming mecca that is Xbox360!!!

[dantruon]

Just some anecdotal evidence. One of the things I do in real life is manage a help desk of about 10 people. 8 of them are young guys who are gamers. 2 are MS guys and the rest are either Sony or 'undeclared'. The MS guys and Sony guys go back and forth from time to time but nothing as harsh as what we see on this forum. :) On Friday, one of the guys asked everyone to gather around his desk and he showed them the HD NBA 2k6 trailer. All they could say was 'wow'. All the Sony guys asked when it was coming out and how much the system was, after finding out, all but ONE of them said 'i'm buying that, i'm not waiting until next christmas'. (an undeclred guy later went nuts over the PGR3 video and added his name to the 'i'm buying one' list)

OBviously a very small sampling but i think its true that a vast majority of the gamers out there are 'up for grabs' so to speak. If the competition is compelling enough i dont think the past matters as much as you all think. I think since most of the people in THESE forums are diehards for a brand they tend to assume everyone feels that way about their console.

why didnt you showed them the killzone trailer or the the tekken or getway trailer they will be like " i will rob the bank of america tommorow"

[expletive]

Thanks expletive for a very fair response. *raises thumb up to the sky* See the problem is this. It has not been proven that games being developed for the PS3 will cost way more than making a game for the X360. Hell we haven't even heard all that much about games being developed for the PS3 due to its earlyness and NDAs.

To be fair expletive you are taking what some precieve as a internet myth and sort of in a small way making it a true statement. I'll wait until the Sony releases it's final game sheet for upcoming games to see if your theory is correct.

Just because Sony hasn't released as much information about the PS3 doesn't mean that it will lose franchises. And if development cost was the main factor for great franchises shouldn't the GC have had the best game this gen?

My response was to your specific question of 'what could stop Sony' and more specifically in 'what could stop Sony in comparison to the X360' . If you had asked what are all the factors that go into deciding a console war and rate them in order, my response probably would have been different. :)

Additional disclaimers: I'm not saying this WILL happen or even probably, i have NO idea. All i was pointing out was there is smoke around this, myth or not, and this is something that could cause software development issues for Sony. Whether or not it happens, only time will tell. The one injection of my own was that since it IS Micorosoft's strategy to be easier to dev for and be cheaper for everyone (and it does NOT seem to be Sony's based on the 'work harder' comments from KK), i think the likelihood RELATIVELY increases.

P.S. Thanks for the thumbs up! :)

[expletive]

why didnt you showed them the killzone trailer or the the tekken or getway trailer they will be like " i will rob the bank of america tommorow"

They saw the killzone trailer right after E3 and have known it was prerendered video for about 6 months now. I never saw the getaway trailer or even knew it was a 'statement'-type trailer. I guess what i took from it is that launching early may REALLY help MS. When the PS3 comes out there may have been a lot of PS2 owners who have already bought the 360 and will need a compelling reason to drop $400 or whatever on a PS3.

[mckmas8808]

My response was to your specific question of 'what could stop Sony' and more specifically in 'what could stop Sony in comparison to the X360' . If you had asked what are all the factors that go into deciding a console war and rate them in order, my response probably would have been different. :)

Additional disclaimers: I'm not saying this WILL happen or even probably, i have NO idea. All i was pointing out was there is smoke around this, myth or not, and this is something that could cause software development issues for Sony. Whether or not it happens, only time will tell. The one injection of my own was that since it IS Micorosoft's strategy to be easier to dev for and be cheaper for everyone (and it does NOT seem to be Sony's based on the 'work harder' comments from KK), i think the likelihood RELATIVELY increases.

P.S. Thanks for the thumbs up! :)

No arguement here. I guess we will have to wait and see. But I also think people take KK comments out of context. The 'work harder' comment also applies to devs developing games on the X360 too due to it's 3 cores and Xenos' unified shaders compared to what the Xbox had. So KK is right, but he's right about the PS3 and X360.

[mckmas8808]

When the PS3 comes out there may have been a lot of PS2 owners who have already bought the 360 and will need a compelling reason to drop $400 or whatever on a PS3.

I like this statement. It shows that you are non-biased and can see that this is a possiblity.

[expletive]

No arguement here. I guess we will have to wait and see. But I also think people take KK comments out of context. The 'work harder' comment also applies to devs developing games on the X360 too due to it's 3 cores and Xenos' unified shaders compared to what the Xbox had. So KK is right, but he's right about the PS3 and X360.

Sorry i wasnt clear, i meant the 'I want people to work harder becuase its expensive but it rox' line.

Regardless, its a good time to be a (console) gamer!

[expletive]

I like this statement. It shows that you are non-biased and can see that this is a possiblity.

Unfortunatley (for my wife, foruntate for my kids :) ) in wont need a compelling reason and will likely be $400 (+games) poorer when it launches. :)

[ihamoitc2005]

So you believe the PStwo costs about the same or less than a GBA to produce? :shock:

Less than retail price of GBA, yes. GBA has nice LCD screen, but nevertheless it should be cheaper in cost to manufacture than PSTwo. Retail price of replacement for much superior TFT LCD screen of PSP is ~$40-45.

[YeuEmMaiMai]

I will not buy a PS3 or an Xbox. I will just buy a Nintendo console when they get cheap enough. Sony will undoubtidly be #1 simply due to it's extremely large fanbase but in light of no "live" type of network play may hurt them.........

[Phil]

Exactly.

The big flaw I see in XBD and Phil's logic is that of the 70million or so PS2 owners, 100% of them are die hards. It's not the case. A small percentage of those are die-hards, the vast majority simply bought it for the GAMES.

Before you start discrediting what I post, at least have the decency to read it and know at least what you're arguing. Throughout all my posts I have analyzed the userbase and made assumptions as to how they are split up between hardcores, loyal supporters and casuals. What you have failed to address on multiple occasions is that many of the Sony consumers not only bought it because it has a bigger software collection but because it is the number one selling brand that most people feel confortable with. They know it'll be supported through the end, that it should receive the largest support and that it's regarded as the best and easiest choice for them. It's convinient and it's a brand-name that they trust because it's the safe bet.

You also got the numbers wrong: The PS2 has reached 90+ million, not 70. From those 90+/- million consumers, I assume that somewhere around 60-70 million are exclusive to the PlayStation brandname. Undoubtedly, many of todays exclusive owners also originated from the PlayStation userbase. How many of those will not be anticipating a PS3 more until they show interest in a potential Xbox360 as long as Microsoft isn't offering more / better? (and from the casuals point of view, they are not)

So lets take a look at what consumers really care about, Game Library and Costs. Brand Loyalty is not a determining factor here, you guys like to use precedants set in history alot, so why not take a look at how little brand loyalty has really mattered?

No, they also care about the value attached to the system. Consumer confidence is an important factor as well. Consumers don't simply buy because one has x times more games than the other - they buy what seems to be "the big thing" - an investment that should last them for quite some time and deliver on their gaming needs. There's a reason why PS2 blew away the casuals. If what you say is true (that mindshare isn't a factor), then consumers would have picked up the Dreamcast like crazy without worrying about Sega's image problems. They didn't however, for reasons quite obvious: The PS2 was the great successor of a system bought by millions, the timing of the launch was right (Dreamcast was too early after millions had just bought a PSone and was still primary supported by publishers) and marketing as backwards-compatibility. While you may choose to put down backwards-compatibilty - it is a factor to especially consumers that lookup back on their 10 to 20 or so games and a slowly old and breaking PS2 and think "hey, at least I'll still be able to use my games on the next Sony system" - and that again, is added value for money and it makes them feel confident in their purchase. They also feel confident that the software they'll buy for PS3 will also be backwards-compatible 5-6 years down the road when PS4 will come out. Sure, no one will actually go back and play the old games, but it's still something that adds value. The knowledge of knowing that your money on software the last couple of years wasn't entirely wasted.

Sony has never faced a competitor like the X360 before, and the #1 reason why is 3rd party developer support. In addition MS is investing extremely heavily in 1st party titles, as can be seen by them creating studios like Real Time Worlds from the creator of GTA, Mistwalker studios from the father of FF, and purchasing heavy weights like RARE, and the list really does go on....

Go and repeat that a little while longer. While it means something to the average Xbox fan outthere, it means squat to the average PS owner. In fact, the casuals you are talking about don't take notes of the producers and which company is supporting which. No one cares about games that may or may not come. The casual consumer takes notice then, when something big does launch and delivers something new and great experience. Look at EyeToy for reference. Sure, what you are talking about has potential to end some striked 3 to 4 years down the road, but it will simply not matter anytime soon and the casuals won't even know about it until that potential turns into something successful.

Xbox360 has healthy support and that's what matters. Though while the Xbox360 is supported by 3rd parties, PS3 is as well - and receiving much more support as we speak. While the Xbox might be launching earlier (and that IS its prime advantage), you still have to note that most casuals are still buying PS2s at the moment - they won't be running out anytime soon to buy a Xbox360. They'll be buying once the price drops and by then, PS3 will be out as well, probably with as many games as Xbox360 on the shelve - and simply because it has more support and these games are in development already. And a lot of these games are franchises and successors of games people already know. How many of the teams you have mentioned above have an established franchise on the market? Rare's games are new (except for PerfectDark that is), the creators of GTA? No one knows them by their new name. And "father" of the FFs - you do are aware that he wasn't the producor of the last 5 main Final Fantasy's that have sold millions, right? You also are aware that the next Final Fantasy is coming out exclusivily for PS2 right? And you can be sure that the next Final Fantasy (XIV) will most likely be exclusive to PS3 right?

Some people insistance to compare X360 to XBOX, or even dreamcast, really shows how they are not taking a clear look at the situtation, and completely underestimating the type of competition X360 will be offering.

Quite to the contrary, mon amie. In fact, I have posted quite a bit more on the entire subject accounting for more factors than you ever had. I am in no way putting down the Xbox360's potential and how much competition it will be to the PS3. However the numbers you are suggesting are surreal and quite laughable at this point of time. There's nothing supporting it beyond the fact that Microsoft does have money and even that ment squat last generation. It's quite evident that you are very excited about Microsoft's next console and I'm sure many other Xbox fans feel the same as well. To suggest that everyone feels the way you do though is quite far from the truth though. Again: While you might be very excited - at this point, many of the PlayStation userbase don't give a damn. And I'm not speaking about this forum or any other forum in particular either: Just go and ask around people that have been PlayStation consumers since the last generations and have come to enjoy some of the PlayStation exclusive franchises. Or visit some rather PlayStation exclusive boards (not any of the tech-orientated boards like this one, I'm speaking of the more casual ones outthere).


Casual consumers care about game library & price, that's it, bottom line.

As other factors as well. Read above.

The reason I believe Sony will be luck to get a 10-20% lead is because the X360 is going to have an EXTREMELY strong game library, it will have variety and a good selection of AAA titles. It will also be cheap. It's going to drop in price very fast, I believe it's MS's strategy to capitalize on this, their key advantage.

As I already said, you might be very excited as an Xbox fan to what is coming your way but I think you're off in Lala-land if you believe most of the PlayStation casuals that just bought a PS2 recently are already all hyped and pysched up as you are. Reality is; They aren't - they've just begun enjoying their PS2 and by the time they'll be looking into buying a new system is when the PS3 will already be out - and that is sometime in 2006. Xbox360 won't be cheaper than the PS3 anyway - not in its premium form, that you can be sure of. As a reminder: Microsoft is launching at $399 now and it won't drop the price until later next year as they wouldn't want to piss of their own consumers that just got a Xbox360 at its high price. Expect price drops around christmas next year and the premium Xbox360 will not be sold below $299, that you can be sure of. If anything, Microsoft will be gambling their way with the basic SKU, the one that's going to be sold now for $299. On the other hand, you have absolutely no proof or idea at what price Sony is going to launch their PS3 in North America when it launches. My prediction is, if they launch in Spring in NA, it'll be at $399 - the same price as the Xbox360 premium package - or if they launch near fall, somewhere between $299 and $349. I guess it'll depend how well Xbox360 is doing until then that will influence the price tag - so, we shall see. If the prices do end up being in the same league, I fail to see what kind of a cost advantage Microsoft will have. The hype around the PS3 will be huge and the software will be there as well (thanks to the support they are already receiving). Then there is Blu-Ray and marketing which will make PS3 look as the bigger, better investment to last over the next 6 years. If casuals are already perceiving Xbox360 as Xbox1.5 now, do you really believe they won't go for a brand-new high-tech PS3 when it launches? Again, keep in mind that the PlayStation brand is the best selling console brand for the last 10 years - it has the largest loyal fanbase and it's going to get the biggest support by publishers that already cashed in on the last two generations on Sony's consoles. The timing will be right as well, since many of the casuals that bought their PS2 in 2002-2004 will be looking for something new in late 2006. And then again, there will be backwards-compability with all their favorite games that are just barely working on their old and breaking PS2. Added value again. And as for costs - even if PS3 is going to be more expensive (even if by little), if consumers feel they are getting something better that will last them for the next 5 years and give them a Blu-Ray player - they'll buy it. As I said, consumers favoured the more expensive PS2 over the newer Xbox as well - why? Not solely because of the bigger game library - but also because of consumer confidence of knowing "this product is selling and my games from last generation will work as well - and its the safest bet".

I think you'll also see 3rd party developers begin to develop for the X360 primarily as it carries the lead through 2006, 2007 and likely into 2008. X360 will have a greater installed base, and an easier programming environment with better software. I wouldn't be surprised if by the time we get to 2008 there are still more games on X360 as it becomes the development platform of choice.

Answered already above. *Hint* There's more support for the PS3 already. As for multi-platform games and which will be the primary console of development: does it even matter? No one was aware of that this generation (and a few games were targeted for Xbox first and later ported to PS2) - what do the casuals care as long as the game is coming out? Answer: no one, as did no one this generation either.

It's all about the games, it's all about whether, over the next 3 years, developers decide to bet on Sony and it's eventual installed base(2008-2009) or decide to support the X360 with it's greater installed base and better programming tools.

I think you're in for a mighty disappointment. As I said, first year: Hardcore and loyal supporters for the most part - after that year, casuals will make up for more and more of the growing fanbase. PS3 will be already be out then... but hey, Dreamcast's superiour userbase sure made a difference didn't it? (factor in that casuals - as you are arguing - don't give a damn about mindshare and brandname.... :wink: )

The 3rd part Dev's will decide this, as well as the 1st party smash-hits from both companies, those are wildcards.

Also, I believe Live! to be somewhat of an X-factor here, it may or may not become a huge driver this generation, and it could be the one thing many people are counting out. But when we look back in 5 or 6 years, Live just might be the feature that really put MS over the top.

You sure are a believer aren't you? Well, I guess enjoy it while it still lasts. :wink:

[Carl B]

Exactly.

The big flaw I see in XBD and Phil's logic is that of the 70million or so PS2 owners, 100% of them are die hards. It's not the case. A small percentage of those are die-hards, the vast majority simply bought it for the GAMES.



Whoa whoa whoa... now when did I ever say that PS2 owners were die-hards? I think you must be thinking of someone else there Scooby. ;)

How come I get associated with so many concepts I've never written about?

I must have missed these recent posts in this thread, else I certainly would have responded sooner! But just wanted to clarify that. I mean hell, I own PS2, but I own GameCube too, yeah? I'm hardly hardcore myself... just interested in the technology of these things really.

[Phil]

Whoa whoa whoa... now when did I ever say that PS2 owners were die-hards? I think you must be thinking of someone else there Scooby. ;)

How come I get associated with so many concepts I've never written about?

I must have missed these recent posts in this thread, else I certainly would have responded sooner! But just wanted to clarify that. I mean hell, I own PS2, but I own GameCube too, yeah? I'm hardly hardcore myself... just interested in the technology of these things really.

Heh, don't take it personally - I'm sure he was refering to me in particular, though I must say I find it rather annoying myself since I have never simplyfied the market to what he is suggesting - in fact, if you read his own posts on the matter, it is quite obvious that he himself is looking at the market rather one sided and simple. It gets annoying then when I actually take the time for a 30 minutes essay on all the factors I can think of and see my own efforts get reduced and dismissed on one-liners that don't even touch on the greater points I made.

I don't know why I bother. There's hardly anyone that seems to go through the effort to really respond to what has been stated and that really makes it a waste of time. Yay for the signal/noise ratio. :roll:


EDIT: Read post below for a nice example of exactly what I mean that simply adds more noise to the forum and isn't wanted here. <sigh> :roll:

[expletive]

Before you start discrediting what I post,.....

... sure are a believer aren't you? Well, I guess enjoy it while it still lasts. :wink:

Wow does J. Allard know how screwed he is? They should just cancel the launch now. Especially since there's no precedent over the last 20 years of mindshare and/or marketshare shifting in the console market...

:)

[pipo]

MS is in a pretty good position IMHO.

With Nintendo's new route and a possible early launch for the US / Europe I'd say Sony's is in a interesting position.

Not that I expect bad sales for the PS3, but I think Ken is losing more sleep than Iwata or Moore at the moment...

OK, maybe not Moore, but you know what I mean. ;)

[mckmas8808]

MS is in a pretty good position IMHO.

With Nintendo's new route and a possible early launch for the US / Europe I'd say Sony's is in a interesting position.

Not that I expect bad sales for the PS3, but I think Ken is losing more sleep than Iwata or Moore at the moment...

OK, maybe not Moore, but you know what I mean. ;)

Well if Iwata can't turn around Ninteno's horrible past of losing marketshare with every new console system he might not have a job in 5 years. Therefore I think Iwata's sleep is not long and comfy either.:wink:

[jvd]

Huh? What? How? Why? Just huh what? So if the PS3 sells lets say 100 million consoles (I can say this because its predesesors have shown it's possible), then you are then believe that the Xbox 360 will sell 85 to 90 million consoles. :shock:

Wow! That's something that no other console maker has done whos name is not Sony.

Sony sold more this gen as the competition sold less . I.e xbox and gamecube combined only sold 38million i believe while the saturn and n64 combined sold close to 55m i believe (can be off with my numbers)

What happens to sony if both ms and nintendo can grow thier markets . I.e if ms sells 40-50 and nintendo sells 25 million ?

Will sony be able to sell more consoles than last gen or will they sell less ?

[mckmas8808]

Sony sold more this gen as the competition sold less . I.e xbox and gamecube combined only sold 38million i believe while the saturn and n64 combined sold close to 55m i believe (can be off with my numbers)

What happens to sony if both ms and nintendo can grow thier markets . I.e if ms sells 40-50 and nintendo sells 25 million ?

Will sony be able to sell more consoles than last gen or will they sell less ?

Good question. http://www.beyond3d.com/forum/images/icons/icon14.gif

Well first of all the PS2 hasn't stop selling yet. So to say that the PS2 sold more than the PSone due only to this is not factual as of yet. If the PS2 slows down big time around 118 million consoles then your theory will be correct. But if the PS2 soars past 120 million and is still kicking it would prove that the Sony and the devs that made games for it truly increased what they did on the PSone.

[jvd]

Good question. http://www.beyond3d.com/forum/images/icons/icon14.gif

Well first of all the PS2 hasn't stop selling yet. So to say that the PS2 sold more than the PSone due only to this is not factual as of yet. If the PS2 slows down big time around 118 million consoles then your theory will be correct. But if the PS2 soars past 120 million and is still kicking it would prove that the Sony and the devs that made games for it truly increased what they did on the PSone.

well the nes went back on sale recently as nintendos patent expired . But for the sake of arguement lets use the 5-6 year market numbers as that is when sony will make 90% of thier moeny off the platform.

WIth increased competition and perhaps an increase of multiplatform games (due to rising dev costs perhaps ) wil lthey be able to grow their market ?

Will the market itself keep growing as it has year over year in the numbers it has or will it drasticly slow down ?

There are a slew of factors and in reality its hard to say if sony will even come close to what they did with the ps2.

The ps2 had about a 10 million unit lead on the xbox when it launched and the same with the gamecube . It was far and away the safe choice for the majority of developers to program for because of its use preexisting installed base that neither the xbox or the gamecube had .

This time though the ps3 will be walking into a system that unlike the dreamcast has staying power along with a lead in market share from the get go .


To say sony wil lsell as many units as it did last gen or even more gutsy increase the size of thier installed base over last is a very bold claim and one that can't be backed up .

I believe in this gen we will see a normalizing of the market with sony prob holding the biggest piece of the pie but it much reduced over last gen and ms coming very close to a 30% piece and nitnendo increasing thier market also .


I believe this because i believe the following

Sony will launch at a 400$ price range to limited units in the retail chain with europe and america in the holdiay season 2006 . With ms after that holiday droping the price of the core and premium by 100$ .

With the xbox 360 core unit at 200$ it will breath new life into the system and offer an affordable next gen system with no kiddy image announced. In 2007 when the ps3 drops in price most likely to 350 we will see ms announce another 50$ price drop.

Ms will keep doing this until the core unit htis the magical 100$ price point at which time the 200$ premium package will get upgraded to a 40 gig drive and stay at that price while both units get pack ins of a game (most likely one that has strong live features )

I believe this will continue to give ms the momentum to sell tons of units and most likely be at the 30-40 million mark by 2008 at which time sony will most likely start to pull away from them do to strong japanese sales

[london-boy]

To say sony wil lsell as many units as it did last gen or even more gutsy increase the size of thier installed base over last is a very bold claim and one that can't be backed up .


Obviously it can't be backed up, it's in the future, Homer!! :wink: Unless you have a Delorian, how do you confirm claims for the future? And even if you had one, you might irreversably change the future by going there. You might come back in a universe without EA. :shock:

I believe in this gen we will see a normalizing of the market with sony prob holding the biggest piece of the pie but it much reduced over last gen and ms coming very close to a 30% piece and nitnendo increasing thier market also .


I believe the same. But obviously no one can "back up the claim". We'll have to wait and see. Sony has only one way to go, and that's down. What needs to be monitored on their side is how far down they go.
They COULD increase their lead over MS and Nintendo, but i think it's very very very unlikely.

[jvd]

Obviously it can't be backed up, it's in the future, Homer!! :wink: Unless you have a Delorian, how do you confirm claims for the future? And even if you had one, you might irreversably change the future by going there. You might come back in a universe without EA. :shock:


hehe actually i was hoping for someone to post the market growth in the last few gens over all to see if its slowing or growing

I believe the same. But obviously no one can "back up the claim". We'll have to wait and see. Sony has only one way to go, and that's down. What needs to be monitored on their side is how far down they go.
They COULD increase their lead over MS and Nintendo, but i think it's very very very unlikely.


aye hopefully they start to slide down .

Just look at the pc 3d card add in . Its just boring as hell with 2 players and really we don't make out in the end as consumers because instead of the high end lowering in price its raising . 3 and a half years ago the high end with the 9700pro was 400$ , now with the x1800xt its 600$ . Thats a 200$ increase .

I really want both ms and nintendo to take alot of market share away from sony so we can have 3 semi equal players in the market all making money and lasting a long time . something like ms 30% , sony 50% and nitnendo 20% wouldn't be bad .

But the way it is now with sony having what 90% is not good news for us

[london-boy]

Personally i don't give a damn who takes what size of market share. Shadow of the Colossus is the first game i bought in 2.5 years (apart from HL2, Farcry and Doom3 for PC which i hated, never finished them). So PS3 is the console of choice for me. Mainly for Bluray and for the games that i loved so much this generation. I hardly play games these days anymore.
If they slide, they slide, if they dominate, they dominate. I'm not "hoping" for anything.
More competition will mean better quality so it's all good for me.

[Shifty Geezer]

Sony has only one way to go, and that's down. What needs to be monitored on their side is how far down they go.Well they could go up. If they manage to turn PS3 into the next mobile-phone phenomenum somehow so everyone wants one, there's like 10x as many people out there to sell to as theyve already sold to. eg. I've thought of a couple of uses for PSP that greatly extend it's potentia in general use ways (of which I wil be submitting to Sony in their Yaroze thingum ;) )
Let's say they get an advanced make-up simulator going a la Toshiba's demo, and that attracts all the girlies. And then a super networked genealogy system to attract everyone digging up their roots (which seems to be ever increasingly popular). If Sony aren't content to limit themselves to games there's actually plenty of scope to reach new audiences and expand their customer base, so I don't think down is the only option (even though I think elsewhere I've said myself this is the case...:???: )

[london-boy]

Well they could go up. If they manage to turn PS3 into the next mobile-phone phenomenum somehow so everyone wants one, there's like 10x as many people out there to sell to as theyve already sold to. eg. I've thought of a couple of uses for PSP that greatly extend it's potentia in general use ways (of which I wil be submitting to Sony in their Yaroze thingum ;) )
Let's say they get an advanced make-up simulator going a la Toshiba's demo, and that attracts all the girlies. And then a super networked genealogy system to attract everyone digging up their roots (which seems to be ever increasingly popular). If Sony aren't content to limit themselves to games there's actually plenty of scope to reach new audiences and expand their customer base, so I don't think down is the only option (even though I think elsewhere I've said myself this is the case...:???: )

I did say "they COULD go up" but unless they do something very right, it's very unlikely.
Many things could happen. Both MS and Sony could go up for example, if the market expands, which could very well happen seen how so many things are now included in these machines, to attract even more people who aren't usually drawn to videogames...

[Shifty Geezer]

Yes. Just saying that there's plenty of scope for up as well as down and maybe it isn't overwhelmingly proably they'll go down just yet? I expect they'll lose market share, but I'd maybe only weight my expectations 60:20:20 down/stay/up. Actually, no. Revised figures are 58.3:19.6:22.1. Carefully considered based on really indepth market research. Honest guv'.

[Phil]

aye hopefully they start to slide down .

Just look at the pc 3d card add in . Its just boring as hell with 2 players and really we don't make out in the end as consumers because instead of the high end lowering in price its raising . 3 and a half years ago the high end with the 9700pro was 400$ , now with the x1800xt its 600$ . Thats a 200$ increase .

I really want both ms and nintendo to take alot of market share away from sony so we can have 3 semi equal players in the market all making money and lasting a long time . something like ms 30% , sony 50% and nitnendo 20% wouldn't be bad .

But the way it is now with sony having what 90% is not good news for us

Huh, what has the console industry got to with the GPU market that is driven by two key players? Despite the fact that Sony has dominated the two last generations, I still see them investing in cutting-edge hardware. Why is their 90% marketshare a problem? It's not as if Software could have been better... or do you disagree?

[jvd]

Huh, what has the console industry got to with the GPU market that is driven by two key players? Despite the fact that Sony has dominated the two last generations, I still see them investing in cutting-edge hardware. Why is their 90% marketshare a problem? It's not as if Software could have been better... or do you disagree? software and hardware can be better and cheaper .

There is only one reason why we are seeing a ps3 in 2006 and that is microsoft. If microsoft wasn't in the console business sony would still be sitting on the ps2 . Its still selling well for them and at a 150$ price point

The closer the market shares the sooner we would see prices of the hardware drop too. If ms and sony are neck and neck this gen we will see the 100$ price point from the market leader much sooner than we did last gen (which is almost 6 years and hasn't been seen)

[london-boy]

There is only one reason why we are seeing a ps3 in 2006 and that is microsoft. If microsoft wasn't in the console business sony would still be sitting on the ps2 .

How would you know?? These arguments based on "if xxx did "this", "that" would have happened to yyy" are so out of the blue, unprovable and subjective, it's hardly worth discussing them.

Sony were selling PS1's like crazy, more than DC, and still came out with PS2. They could have sat on PS1 for another year or so without bothering, but they didn't. And it certainly wasn't because they saw MS coming, not entirely anyway.

If MS weren't here with X360, someone else would. Thinking a company would just sit and slow technology just for their personal interest (much like MS did many times with their PC business) is quite a bold statement isn't it...

[YeuEmMaiMai]

How would you know?? These arguments based on "if xxx did "this", "that" would have happened to yyy" are so out of the blue, unprovable and subjective, it's hardly worth discussing them.

Sony were selling PS1's like crazy, more than DC, and still came out with PS2. They could have sat on PS1 for another year or so without bothering, but they didn't. And it certainly wasn't because they saw MS coming, not entirely anyway.

If MS weren't here with X360, someone else would. Thinking a company would just sit and slow technology just for their personal interest (much like MS did many times with their PC business) is quite a bold statement isn't it...

Actually he/she may be right. without competition from other companies, why would a company be in a hurry to make a new product when they can milk the current one for all it is worth?

[jvd]

The dreamcast wasn't the factor that pushed the ps2 onto the market as it came out over a year later , it was the gamecube and ms that did that .


This time around its ms pushing it We can see from last gen when nintendo was selling decently that sony was droping the playstation price down faster . That is why it hit 100$ earlier in its life than the ps2 (which once again still hasn't hit it )

As for another company being there if ms wasn't there i think your underestimating the amount of money it would take to enter into the console busniess. Just take a look at ms . They spent tons of money to get in , frankly i don't think anyone else can get in and live with a small userbase .

I think the 3 players we have now are the 3 players we are stuck with , if either exits we'd be done to 2 .

[london-boy]

Actually he/she may be right. without competition from other companies, why would a company be in a hurry to make a new product when they can milk the current one for all it is worth?
That's the point!!

He MAY or MAY NOT be right. No one will ever know because competition IS there and things happened in a certain way already!!

What's the point of basing a serious argument on what could have happened if reality worked differently? No one can prove him wrong, and he can't prove he's right.

What if MS hadn't entered the market?

What if Sony hadn't entered the market?

What if Nintendo went bankrupt before the NES and never released it?

We're not in a "What if speculation" thread.

[Phil]

software and hardware can be better and cheaper .

That's your opinion - yet, I still have to ask again - what has Sony got to do, with the software quality of various 3rd party studios? It's not as if Sony or any hardware vendor can dictate the quality of the game in perspective of what the individual jvd may like or not. In short: Nothing. Software quality is dictated by the competition from other software on the market and consumer demands. Sony or any other vendor only has an indirect control of software qualtiy - and that is in relation to errors/bugs and other criteria.

There is only one reason why we are seeing a ps3 in 2006 and that is microsoft. If microsoft wasn't in the console business sony would still be sitting on the ps2 . Its still selling well for them and at a 150$ price point

Of course - and how is this a bad thing? Personally, I would have rather waited until 2007 for the new consoles and enjoyed this generation a little while longer. What you fail to see is that publishers too would rather have longer console cycles: Software costs decrease as libraries and assets are available and at the same time means they can push out software faster and concentrate more on gameplay rather than game-engines etc. Each new console cycle means high costs for each and everyone. This generation still hasn't maxed out any of the consoles yet - there's still potential there. Potential that is ultimately lost because Microsoft is forcing an early shift onto newer hardware. Hey, it's your money on the console too that is wasted on the lost potential.


The closer the market shares the sooner we would see prices of the hardware drop too. If ms and sony are neck and neck this gen we will see the 100$ price point from the market leader much sooner than we did last gen (which is almost 6 years and hasn't been seen)

Each hardware vendor is here to make money. If they are already taking higher risks to bring out more sophisticated hardware for the same price and need to drop the price quicker at the same time, it'll make them loose money (since consoles are sold at a loss, at least initially). What good to the market is a hardware vendor that can't make money in order to invest again into newer and better hardware? It's simple economics - companies are here to make money, money that they can invest again in newer and better products that will in turn make them money and so the cycle continues. If you force vendors to cut prices too early, at some point, they can't afford to bring out hardware at a loss anymore - and thus hardware will become either more expensive or weaker relative to what could be possible. What you are suggesting isn't really helping your software-quality theory in the least bit.

[jvd]

That's the point!!

He MAY or MAY NOT be right. No one will ever know because competition IS there and things happened in a certain way already!!

What's the point of basing a serious argument on what could have happened if reality worked differently? No one can prove him wrong, and he can't prove he's right.

What if MS hadn't entered the market?

What if Sony hadn't entered the market?

What if Nintendo went bankrupt before the NES and never released it?

We're not in a "What if speculation" thread.
Its very simple .

The ps2 had very little competition compared to the psone. Thus we see the ps2 in its 5th year at the 150$ price range instead of the 100$ price range. We already see sony keeping the price of the hardware higher longer with less competition .

[jvd]

That's your opinion - yet, I still have to ask again - what has Sony got to do, with the software quality of various 3rd party studios? It's not as if Sony or any hardware vendor can dictate the quality of the game in perspective of what the individual jvd may like or not. In short: Nothing. Software quality is dictated by the competition from other software on the market and consumer demands. Sony or any other vendor only has an indirect control of software qualtiy - and that is in relation to errors/bugs and other criteria.


Sony approves each game that is put on thier system , they have everything to do with the quality of the software on the playsation. If a game is substandard they can stop it from coming out .

Of course - and how is this a bad thing? Personally, I would have rather waited until 2007 for the new consoles and enjoyed this generation a little while longer. What you fail to see is that publishers too would rather have longer console cycles: Software costs decrease as libraries and assets are available and at the same time means they can push out software faster and concentrate more on gameplay rather than game-engines etc. Each new console cycle means high costs for each and everyone. This generation still hasn't maxed out any of the consoles yet - there's still potential there. Potential that is ultimately lost because Microsoft is forcing an early shift onto newer hardware. Hey, it's your money on the console too that is wasted on the lost potential.

I disagree .

Its a bad thing all around for consumers if the cycles were pushed out or sony had less competiton (or any market leader for that matter )

I'm sorry but i was tired of xbox graphics 2 years ago , its time it was replaced and the ps2 should have been replaced along time ago. Letting sony go into 7 or 8 year long generations just hurts us .

Not to mention with no competition sony wouldn't have to push the power of the systems or take the losses they are taking on the hardware which is once again bad for us .

As for developers proper managment and reusing engines in a generation would be a smart way to lower the cost of production budgets .

Movies can be made in a wide spectrum of investment . You have 500k movies and you have 200 million movies. I see no reason why you can't have a spectrum as wide and still retain good quality games .

Not only that but once again with more systems on the market aimed at diffrent price brackets and feature sets a dev can port the game to more platforms and recoup the money .

Each hardware vendor is here to make money. If they are already taking higher risks to bring out more sophisticated hardware for the same price and need to drop the price quicker at the same time, it'll make them loose money (since consoles are sold at a loss, at least initially). What good to the market is a hardware vendor that can't make money in order to invest again into newer and better hardware? It's simple economics - companies are here to make money, money that they can invest again in newer and better products that will in turn make them money and so the cycle continues. If you force vendors to cut prices too early, at some point, they can't afford to bring out hardware at a loss anymore - and thus hardware will become either more expensive or weaker relative to what could be possible. What you are suggesting isn't really helping your software-quality theory in the least bi


companys can still make money . Yes they will loose money in a price war but of course you hit mass market apeal much quicker in the life of the unit at the same time . Of course when you hae hardware makers that rather sell u a swiss army knife of electronics instead of a gaming system it may hurt thier wallet alot , but that is thier choice .

I personaly want lower hardware costs as it means i can own more systems sooner and i'm not tied down to one system . Each company evolves gaming in some shape of form. If nintendo wasn't around and it was just sony chances are we wouldn't see the analog stick or we wouldn't see the new rev controler . These are all things born out of competition .

Competition is what makes advancements happen .

I'm sure with sony they would still put out a new system when they had a new format they wanted to shove at us (and the same goes with ms ) but it would be on thier time schedual and with them most likely breaking even or making money on the console . Thus we might see a console 7 or 8 years after the last one with tech that was cutting edge 5 years after the last console . Not only that but we would see inovation go out the window . We'd also see the price of hardware drop slower than it is now . I'd be surprised if the xbox didn't exist if sony would have hit the 200$ mark at this point . This is something i don' want .

What i do want is

More inovation , More powerfull hardware at a cheaper price quicker

because thats what happens when there is healthy competition . With out it the market stagnets

[Phil]

Sony approves each game that is put on thier system , they have everything to do with the quality of the software on the playsation. If a game is substandard they can stop it from coming out .

Well, then I'll just end this silly argument here and now: Since the tie-in ratios from each console vendor are on the good side, I suspect consumers don't see software quality as a problem as you do. Neither do I. Games that I don't like, are not bought. Thus the market dictates what they want, like and what they don't.

The problem you're refering to has been existent thoughout all industries: there are good products and there are worse ones. Buy the ones you like and quit whining.

I disagree .

Its a bad thing all around for consumers if the cycles were pushed out or sony had less competiton (or any market leader for that matter )

I'm sorry but i was tired of xbox graphics 2 years ago , its time it was replaced and the ps2 should have been replaced along time ago. Letting sony go into 7 or 8 year long generations just hurts us .

Again, that is your opinion. Besides, I thought we were talking about software quality - now you're talking about graphics? If you're such a graphics whore, go and buy a PC. I think we've established that the market (which you are arguing for) demands innovative and intuitive gameplay as graphics as well. The current consoles aren't maxed out and have a lot to improve on. Even if the game-engines are reaching a phase in which they can't be really improved on, there's still a lot left you can achieve with better art-direction and better gameplay / new ideas. This has been no different from the last few generations: the best software has always launched late within the consoles cycle - then when developers have more time to deal with what enhanced the gameplay experience since graphics have already hit the hardware's limit.

Not to mention with no competition sony wouldn't have to push the power of the systems or take the losses they are taking on the hardware which is once again bad for us .

Of course they would, or else you have a company like Microsoft or Nintendo start a new console and grab the share as Sony once did when Nintendo was on top. Besides, what are we arguing now? About a non-existance monopoly or that, that Sony has a stake around 75% in the industry as it is now? These are two different things, one of which is from within your fantasies and not existant in the current industry.

As for developers proper managment and reusing engines in a generation would be a smart way to lower the cost of production budgets .

They can only do that once engines are available and the money and time budget is there. This is usually towards the end of the console's cycle since plenty of art assets can be reused and code recycled in order to enhance the gameplay experience for the player. As I said, since Microsoft is forcing an early shift into the new generation, Sony is following suit and thus shortening the cycle and ultimately the potential that this generation still has left.

Not only that but once again with more systems on the market aimed at diffrent price brackets and feature sets a dev can port the game to more platforms and recoup the money .

Porting isn't cheap, especially when the hardware of each vendor is quite different. I'd rather have one console and all the games maximized for the platforms strength than a watered down multi platform planned game that is aimed to be ported evenly among all consoles. I thought further up you were critizing the game quality and graphics? Now you even want to have them all port games and do multi platform games and make the quality and graphics even worse because they have to make all games portable? :lol:

Seems to me you don't quite know what you want to argue. In anycase, it's not making any sense, neither from an economical point of view nor for the consumer.

companys can still make money . Yes they will loose money in a price war but of course you hit mass market apeal much quicker in the life of the unit at the same time . Of course when you hae hardware makers that rather sell u a swiss army knife of electronics instead of a gaming system it may hurt thier wallet alot , but that is thier choice .

I personaly want lower hardware costs as it means i can own more systems sooner and i'm not tied down to one system . Each company evolves gaming in some shape of form. If nintendo wasn't around and it was just sony chances are we wouldn't see the analog stick or we wouldn't see the new rev controler . These are all things born out of competition .

Wait a minute: Further up you're arguing that software isn't good enough and that you are already tired of graphics... so now, you want console vendors to take less risks by making their hardware cheaper (and thus inherently cheaper and less cutting-edge)... which in turn favours the consumer how? I thought you wanted better graphics? Or do you want shortened life-cycles too (which is a direct result of weaker less sophisticated hardware)? Yep.. lets shorten the console-life-cycle to 2 years so JVD can enjoy buying 3 equal consoles for less money but every 2 years! Even better, imagine all software developers that now have to take losses on 1st generation hardware (new libraries, new assets, the whole lot) but also jump onto next generation development already right after they launch their first game! :roll:

I'm sure with sony they would still put out a new system when they had a new format they wanted to shove at us (and the same goes with ms ) but it would be on thier time schedual and with them most likely breaking even or making money on the console . Thus we might see a console 7 or 8 years after the last one with tech that was cutting edge 5 years after the last console . Not only that but we would see inovation go out the window . We'd also see the price of hardware drop slower than it is now . I'd be surprised if the xbox didn't exist if sony would have hit the 200$ mark at this point . This is something i don' want .

As soon as consumer demand goes back, prices drop. This has been in every industry. Or have you ever sat there and wondered why Microsofts OS software prices come down in prices as well? They might be still too high, but they too have reduced their prices of their software as consumer demand scales back.

What i do want is

More inovation , More powerfull hardware at a cheaper price quicker

because thats what happens when there is healthy competition . With out it the market stagnets

And as I've already told you further above, you can't simply ask for more for less as somewhere, the money has to come from and end in profits so that vendor x can invest again into newer console cycles. What you are suggesting would merely break the industry as we know it today.