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This is the reason why I think comparisons to Apple makes no sense. When a consumer buys a current gen iPhone they are basically making a $2000 to $4000 commitment over a 2 year period. Smartphones are profit margin monsters for the successful hardware vendorsand telooms like Apple, samsung, verizon and att. Apple's hardware profits only represent about 5-10% of what a consumer's spends on hardware and service commitments. Yet it allowed Apple to quickly build its war chests up to 100 billion dollars. Apple is in a high profit margin/high volume business. Apple hardware is cheaper to manufacturer compared to consoles yet command 2X-2.5X what a console can demand in terms of price. On top of that Apple sells 10-15 times as many units.
Do you know how potentially powerful consoles could be if they were sold to retailers for $500-$600 a unit. Where retailers would then sell a gamer a XBOX for $200 and a 2 year subscription commitment where on average the gamer would commit to purchase 28 full retail games over two year period. All while MS is selling a 100 million consoles a year.
Regardless of how important graphics performance may be considered when it comes to consoles it has never produce that type of a reality. One of the rarest argument is that the console market is capable of sustaining high priced hardware. Yet not many of us is satisfied unless we get $300-$600 PC GPU performance from a $300-$400 console.
Let the smartphone market lose 90% of its hardware sales, 100% of the profits generate by said hardware and become dependent on profits strictly provided by content sales. And we will see how committed Apple is to free services, annual hardware updates and highend hardware for its products.
GrimThorne
Newcomer
Speaking of which, Epic has been pretty quiet about whatever next-gen games they might be working on. I wonder if Microsoft has at least one of their tech demos wrapped up as 1st party games the same way they had Gears of War.
Gears of War started as a tech demo, or at least was presented as such in the beginning. So what do we have, the Samaritan, the Infiltrator and of course the Elemental. And will we ever get another Tournament game from them?
(((interference)))
Veteran
This is true
The issue here is, Apple's competitors also charge premium prices (though not quite to the same level) for their phones/tablets - see the Galaxy line - that also does not reflect the actual cost of the hardware.
The smartphone business is based on this kind of demand based pricing as smartphones are still an aspirational consumer good, much like designer clothing.
This is traditionally different for consoles, since the goal here has been to have the lowest price possible to sell as many consoles as possible and make money off games, accessories and services.
Now if MS wants to change this to demand based pricing, the issue will be that the PS4 is sticking to the old approach and so offers consumers the same or better perceived value for money (depending how sensitive the market is to power differences or always on/no used games etc).
Plus, let's not forget that Xbox does not have anywhere near the brand strength Apple does, other than the US they fall behind the PS brand - which is why despite being more expensive and launching 1 year later, the PS is still neck and neck with the 360 in sales.
If I was MS i'd leverage their cheaper BoM to undercut the PS4 by $100 and comfortably outsell it - given how sensitive the console market is to price.
At launch, selling the most consoles is definitely more important than maximising your profit.
It's too much money the market says, that's what's wrong with it. ...And it is, for the rumored hardware. The costliest component is an APU which traditionally goes into mid-end notebooks, which can be had for $500, only then you get a honkin' big battery and a screen included with that price as well.
Except if you actually used that xbox for that whole time period, you would have been forced to buy at least two of them and potentially several more, because they kept breaking all the time. Lol.
...So you see, it's not that simple.
If bought on contract. Lots of people in the world buy their phone outright. That's £529 outright from Apple store direct, let alone what you can get one for by shopping around.
chances of them selling 100 million consoles a year at that price is slim IMO. If the pricing model went that way, I wouldn't buy a console. Indeed, for people already subscribing to internet, TV, and phone services, yet another subscription might be pushing it. The option to sell the product outright needs to be there, and that needs to be far cheaper than the $2000 - 4000 you're wanting invested in a console!
That's yet to be proven as there hasn't been a console without $300 PC GPU performance released yet. Oh, except Wii, which sold gangbusters for a spell.
You're talking about pricing versus competitors. I'm talking about how a company sets its product price and how that isn't tied to BOM. If Apple assemble some specs, even if high end, they can then charge a premium. So can Samsung. If some cheap Ukrainian startup wants to release exactly the same spec phone, they'll have to charge a lot less to have any market appeal. Price of goods != BOM * x%. Price of goods == as much as you can charge and still have people buy at the rate you want to sell.
I think we all know the basics of market dynamics and don't need to turn this thread into an Xbox versus PS4 market wars thread. The rumour is the price point and the discussion should be focussed on whether the rumour is likely right or not. We've had some ideas that could explain the higher than expect price and why the price doesn't reflect BOM.
We should leave market performance discussion to when the products and prices are announced. Then we can have a 'predict which will win next gen wars' poll thread...
xbox have 3 years warranty right?
i doubt MS and Sony will repeat the fragility of X360 and PS3
i doubt MS and Sony will repeat the fragility of X360 and PS3
french toast
Veteran
That all depends on just what they have to uncover doesnt it? If it is just what we are hearing and nothing extra then I agree, but if there really is some special feature that is a gamechanger (excuse the pun
) then perhaps they ar better leaving it to the last minute, there by building up a mad rush of excitement and something that is 'new' and 'fresh' in the news whilst the ps4 has for the most part been discussed. Im sure they know what they are doing with this.
Microsoft are re-imagining and re-inventing themselves. And this includes the new Xbox.
They are working on new designs for their logos and so on from their varied software and hardware.
http://www.theverge.com/2013/4/27/4275944/microsoft-design-presentation-bing-skype-xbox-rebrands
In a video that was just published yesterday, Tom Warren hints us about the future -although the new Xbox is nowhere to be seen for obvious reasons-.
They are working on new designs for their logos and so on from their varied software and hardware.
http://www.theverge.com/2013/4/27/4275944/microsoft-design-presentation-bing-skype-xbox-rebrands
In a video that was just published yesterday, Tom Warren hints us about the future -although the new Xbox is nowhere to be seen for obvious reasons-.
That all depends on just what they have to uncover doesnt it? If it is just what we are hearing and nothing extra then I agree, but if there really is some special feature that is a gamechanger (excuse the pun
Im sure they know what they are doing with this.
Leaving negative rumors and discontent spread among fans and customers is not a very intelligent move IMO.
And MS is not really encouraging any sort of excitement: MS fans are building hopes and expectation on what DF or VG leaks gave them.
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If the negative rumours are true, what advantage does it get MS by confirming them?
But MS should not confirm them, I never said it; that would be anoteh unwise move.
MS IMO doesn't have to reveal the specs to convince players that "Xbox whatever" is a good and valid product
They should just say/show something reassuring, positive.
Silence is not the right strategy IMO.
If MS said what Polygon just said about always online/connected they they would have speared us and them months of hysteria and negative publicity.
It's too late to defuse the bomb since it went off already but MS could have shown that the bomb didn't harm anyone...they didn't.
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Bagel seed
Veteran
They can't say anything until they officially unveil the product. That was their choice to wait until May 21st though.
Maybe they don't perceive it as negative PR (or care) because internally they're all very excited to deliver and profit from the features and services available to customers with always online?
Maybe they don't perceive it as negative PR (or care) because internally they're all very excited to deliver and profit from the features and services available to customers with always online?
Looks like it will fit in well with their 4 main products...
Bing definitely needs new branding. I think the boomerang is appropriate. Will be interesting to see how they improve on the Xbox logo.
Tommy McClain
Which amounts to what lost sales?
It hasn't; not any more than whether MS revealed details or not. If one isn't adversely affected by Durango being always on, the silence doesn't affect one. If one is adversely affected, all the features in the world won't change that, and one would still be moaning. Indeed, if the rumour didn't break and we had MS's official reveal listing all the features along with additional explanation that you cannot play games offline, would the back-lash be any different? I doubt it, but it would distract from the positives. MS's epic online services and feature reveal on Tuesday, internet up in arms about not being able to play offline on Wednesday, drowning out Ms's message.
I repeat, what are the fiscal losses to MS on account of not saying anything ahead of when they choose to, well in advance of when the console releases?
Are you really comparing a mid-end notebook APU to a next gen console APU? Lets take the most powerful AMD notebook APU and compare it to the Sony's official PS4 APU specs (GPU FLOP/s and memory bandwidth).
Richland A10-5750M (Radeon HD 8650G) vs PS4 APU:
- Memory bus: 29.85 GB/s (DDR3-1866, 128 bit) vs 176 GB/s (GDDR5, 256 bit?). PS4 APU wins by 5.9x
- GPU flops: 409 GFLOP/s vs 1840 GFLOP/s. PS4 APU wins by 4.5x
If I could buy a laptop with the PS4 APU + 8 GB of 176 GB/s GDDR5 for $500 I would buy it immediately! No questions asked. AMD would be back in the game if they had a product like this on the market (and could sell it with this low price).
But the current situation is: The only AMD mobile GPU that matches the PS4 APU (in FLOP/s and BW) is their highest end discrete model, the Radeon HD 7970M. It is rated at 2176 GFLOP/s and has 153.6 GB/s memory bandwidth. It has 18% edge in FLOP/s to PS4, but loses 13% in memory bandwidth. Gaming laptops equipped with this GPU start from $1000+. That's what you should be comparing against (if you want to compare against laptops).
Not that I disagree with your general point but isn't Kaveri a better comparison point than Richland since it uses more similar technology and will be realeased at around the same time frame as PS4? I'd expect Kaveri to roughly double the memory bandwidth and FLOPS of Richland. It would still take something more than twice as powerful to match the PS4 APU of course so I'd image another 2-3 generations of APU following Kaveri (late 2015/16) will give us APU's in that ball park.
I never spoke about fiscal losses.
I just saw a lot of negativity around the next Xbox due to MS inability to address concerns.
Of course the conference that will take place May 21st will finally address them but it cloud have been done sooner IMO.
I repeat my original point: MS IMO just left too much room to rumors and speculations.
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