Price Increases of Consoles and Services *spawn*

[eastmen]

Xbox Series X and Xbox Series S price increase announced for Japan - Gematsu

Microsoft has announced a 5,000 yen price increase for the manufacturer suggested retail price of Xbox Series X and Xbox Series S consoles in Japan, which will go into effect beginning February 17.

www.gematsu.com

Hope you all took advantage of the deals this past holiday !

 

[Silent_Buddha]

Considering how the Yen has recovered versus the dollar over the past few months I was wondering when it might happen. The Euro has recovered as well, so there may be an upcomming increase for the EU as well.

Regards,
SB

 

[BRiT]

From other Era, pointing out how the financial currency adjustments have tracked:

 

[SmooTh]

https://twitter.com/i/web/status/1671572067076931594

 

[MCharta]

What a strange decision and timing given multiple contexts....

 

[Jay]

What a strange decision and timing given multiple contexts....

Probably best time to do it.
Better to do it before ABK deal goes through (if it does). As then it will be seen as hiking up prices due to having ABK.

 

[cheapchips]

Glad bought one last week!

 

[fehu]

Is it mandela effect or spencer just some months ago said that they have no intention to increase prices for the x and gamepass?

 

[orangpelupa]

interesting. this basically means the new PS5 in october/september/december wont get any price drop.

as i assume, if sony originally planned it to have a price drop due to cheaper costs, now they surely will scrap the plan for a price drop.

 

[Nesh]

At least the argument that Sony is exploiting its supposed monopoly with price increases is dead now.

 

[orangpelupa]

At least the argument that Sony is exploiting its supposed monopoly with price increases is dead now.

Plot twist, they will be doing price drop with the new PS5 model.

At least I hope that'll be the case... Surely their cost will be lower than the current PS5 DE.

 

[iroboto]

At least the argument that Sony is exploiting its supposed monopoly with price increases is dead now.

That doesn’t change just because MS increased prices.

 

[Jay]

I've always said I'm surprised MS hadn't raised prices even when lots of people kept saying it's going to get price cuts.

By not raising price of base XSS that's made it even slightly more 'appealing' in those countries.

We need to see how well the XSX stock will improve now.

Is it mandela effect or spencer just some months ago said that they have no intention to increase prices for the x and gamepass?

I think he specifically said during holiday period so people expected price rise especially for gamepass as soon as the year started and it never happened.

 

[Deleted member 11852]

Is it mandela effect or spencer just some months ago said that they have no intention to increase prices for the x and gamepass?

It was the reverse, in his interview at the Wall Street Journal Live event, Phil Spencer set out expectations that price rises were on the horizon.

“We’ve held price on our console, we’ve held price on games and our subscription. I don’t think we’ll be able to do that forever. I do think at some point we’ll have to raise some prices on certain things, but going into this holiday we thought it was really important that we maintain the prices that we have.”

 

[Silent_Buddha]

Actually, I wouldn't be surprised if Sony ended up increasing the price of the PS5 again. It depends on whether or not Sony want to have subsidized console pricing in the future. Manufacturing isn't getting cheaper, especially for semiconductor based products.

This isn't like previous generations where you could drop the price of a new model because components in the supply chain have gotten cheaper. While some components may be getting cheaper, most are holding steady or getting more expensive.

We've already seen Sony release multiple revisions of the PS5 as they've changed some component designs to save some costs on manufacturing ... and that wasn't enough to keep pricing the same in the face of global inflation.

MS held onto the pricing longer because they, unlike Sony, didn't massively increase production as early as Sony did. Now that they have, they are likely facing higher per console costs just as Sony likely have been due to either increasing production beyond the original console manufacturing contracts (Contract for X to Y units, but now wanting Z units made which is above X and Y) or because those original contracts have expired and the new manufacturing contract has a higher cost associated with it.

Regards,
SB

 

[Deleted member 11852]

This isn't like previous generations where you could drop the price of a new model because components in the supply chain have gotten cheaper. While some components may be getting cheaper, most are holding steady or getting more expensive.

What is more expensive? As high volume customers like Apple are leaving super high volume processes behind, that it leaving massive capacity for others stepping onto that older node. Like-for-like, TSMC costs have dropped over the last four years. For PS5, Sony went from 7nm to 6nm for whatever reason, and this year well see dropping a ton of 5mm output for 3nm for the new iPhone which is their single biggest selling product.

 

[Silent_Buddha]

What is more expensive? As high volume customers like Apple are leaving super high volume processes behind, that it leaving massive capacity for others stepping onto that older node. Like-for-like, TSMC costs have dropped over the last four years. For PS5, Sony went from 7nm to 6nm for whatever reason, and this year well see dropping a ton of 5mm output for 3nm for the new iPhone which is their single biggest selling product.

Apple may be leaving some capacity, but NV have been starving for more capacity for high margin AI chips (which is good for them, because demand for consumer GPU chips has fallen significantly). They just recently greatly increased their wafer starts with TSMC as more capacity becomes available.

That said, the processor isn't the only component in the system. While it may be the most costly component it isn't likely to be the majority of the cost of the system. Materials costs are going up. Labor costs are going up. Smaller component costs are generally holding steady or going up. Shipping costs are going up. GDDR5 costs are either going to remain relatively steady or go up with a small chance they might decrease very slightly. GDDR6 is the only memory that's seeing any notable drops in pricing and that isn't currently used in consoles and is still higher in price than an equivalent memory quantity of GDDR5.

NAND prices might be the only spot where there can be appreciable cost reduction, although I'm not sure how long that will last. Actually over the past year, NAND chip spot pricing has been pretty steady with some ups and downs. The comedown from Covid lockdown has helped with resellers (SSD makers and retailers) lowering prices in order to move inventory, but actual chip prices haven't reduced much if at all.

So, yeah, if not for the current AI boom, maybe the SOC might be able to come down in price, but it's not likely with both NV and AMD, especially NV, attempting to grab as much of the advanced node wafers as they can when they become available in order to supply to the current AI boom.

Regards,
SB

 

[Nisaaru]

What is more expensive? As high volume customers like Apple are leaving super high volume processes behind, that it leaving massive capacity for others stepping onto that older node. Like-for-like, TSMC costs have dropped over the last four years. For PS5, Sony went from 7nm to 6nm for whatever reason, and this year well see dropping a ton of 5mm output for 3nm for the new iPhone which is their single biggest selling product.

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Sony increased their prices in Aug 25 2022 and MS now in late June 2023. Both actions correlate with a certain chart line. MS must have taken the hit in 2022 though.

 

[Deleted member 11852]

That said, the processor isn't the only component in the system. While it may be the most costly component it isn't likely to be the majority of the cost of the system.

It's not, but it's the single most expensive component. RAM and flash are produced on very different processes, and the world isn't running out of plastic or Blu-ray drives. What does that leave? What commodity parts in PS5 (or Xbox Series) have increased.

Sony increased their prices in Aug 25 2022 and MS now in late June 2023. Both actions correlate with a certain chart line. MS must have taken the hit in 2022 though.

Exchange rates? Sony attributed their price increase to inflation, which has increased in all markets. Sony have always eaten favourable/unfavourabe exchanged rates because they chance constantly.

TSMC costing is pretty much the only cost which hasn't increased.

 

[Silent_Buddha]

It's not, but it's the single most expensive component. RAM and flash are produced on very different processes, and the world isn't running out of plastic or Blu-ray drives. What does that leave? What commodity parts in PS5 (or Xbox Series) have increased.

The world isn't currently running out of anything in the current generation consoles, but the price of materials continues to go up due to continuing high demand. One of the most important for electronics is the price of copper. Compare the price of copper now to when the current generation consoles launched. IE - when the initial manufacturing contracts were negotiated. While it has recovered somewhat from its high during covid, it's steadily been increasing again.

Most of the important sub-components of the consoles use ... copper. Worldwide it's about 50% higher what it was when the consoles were launched. On its own it can be an absorbable increase in component pricing, but it's just another compounding factor that is making current gen consoles more expensive to manufacture and distribute now than when they were originally launched. And I'm not seeing any global trends that will either reduce those costs or even stop them from going up further.

It's not like energy costs are decreasing (impacting manufacturing and distribution). So, that impacts global container shipping costs which are anywhere from 2-5x higher (depending on shipping regions) than they were when the consoles launched. Materials costs aren't decreasing (affecting almost all components within the current gen consoles). There's still relatively high global inflation.

The one potential bright spot was potentially excess fab capacity on advanced nodes at TSMC due to slowdown in high end electronics demand due to inflation ... except now there's unprecedented demand for AI class silicon which has NV and to a lesser extent AMD scrambling for as much advanced node capacity as they can get. Perhaps it's not as much as Apple was willing to pay, but it's certainly enough that it's likely to keep silicon costs for console SOCs from decreasing and potentially will see them increasing.

Memory cost (GDDR5) isn't going down and is likely to only go up if PC GPUs transition to GDDR6. I mean is there any component within modern consoles where the price will decrease appreciably? NAND chips should be one of those, but even that isn't currently seeing any appreciable price decreases. Optical drives were likely already as low as they could go. I doubt the liquid metal used in the PS5 is going to get any cheaper. But that could be one area of savings for Sony, if they can get the SOC cool enough that they don't need the liquid metal anymore.

Regards,
SB