[expletive]

Originally Posted by Mmmkay

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]

Originally Posted by london-boy

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]

Originally Posted by expletive

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]

Originally Posted by Sis

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.

.Sis

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

[mckmas8808]

Originally Posted by london-boy

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]

Originally Posted by g35er

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.

Originally Posted by expletive

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]

Originally Posted by london-boy

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]

Originally Posted by london-boy

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]

Originally Posted by expletive

I dont think anyone in here was using MLs opinion as to who would 'win' to make their argument.

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]

Originally Posted by london-boy

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]

Originally Posted by Mmmkay

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]

Originally Posted by Shifty Geezer

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]

Originally Posted by expletive

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:

Originally Posted by ML

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]

Originally Posted by expletive

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/spartan8...soles_CITI.pdf


[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]

Originally Posted by avaya

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]

Originally Posted by 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.

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

[expletive]

Originally Posted by 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.

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

[Carl B]

Originally Posted by Mmmkay

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/spartan8...soles_CITI.pdf

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]

Originally Posted by Shifty Geezer

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]

Originally Posted by Dave Baumann

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]

Originally Posted by Alpha_Spartan

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/...xbox360overps3