Corporate Execs talk about Next-Gen Consoles

[mckmas8808]

Everybody taking shots at each other. This is going to be the biggest fight in console history.

The Electronic Entertainment Expo marked the start of the next-generation console war. With all sides gearing up for full conflict, opening volleys of insults and predictions are starting to surface in the media at large. The Japanese newspaper Asahi Shinbun's Friday edition featured an article with comments taken from the heads of the three console makers: Microsoft senior vice president and chief Xbox officer Robert J. Bach, Sony Computer Entertainment president Ken Kutaragi, and Nintendo president Satoru Iwata. All three contenders talked about the strategies behind their own consoles and tossed harsh words over the corporate walls toward each other.


Microsoft senior vice president and chief Xbox officer Robert J. Bach--

(NOTE: Bach's comments are translated from Japanese and not directly quoted from his English statement.)

Asahi Shinbun: What do you think of the competitors' machines? Will Sony continue to dominate the gaming market?


Robbie Bach: The other two companies' presentations [at E3] weren't surprising. Sony's [PS3's] capabilities are the same as ours. Nintendo is aiming for the niche market [with its Revolution]. The current-generation Xbox sold more than the PlayStation 2 in North America last Christmas. We will become the market leader with our next-generation console.

Sony's [PS3] will be able to use seven controllers simultaneously and connect with two high-definition TV sets. But it's hard to share a single screen with seven people, and it's also difficult to imagine a room with two high-definition TV sets. We don't know about the selling price yet, but to say the least, our cost of manufacturing [an Xbox 360] is less than Sony's [PS3].

AS: Why doesn't the Xbox 360 adopt a next-generation disc format?


RB: The next-generation disc standard hasn't been solidified yet. Sony is taking a risk. We can decide after the standard has been created.

AS: What has Microsoft learned from its previous game console release?


RB: We'll basically be starting again from square one in the Japanese market. Our current Xbox console didn't have enough software for Japanese consumers. This time, we're teaming up with powerful Japanese game makers, including Square Enix, the maker of Final Fantasy. As for Microsoft's overall game division, we plan to get out of red ink by June 2007.

Ken Kutaragi, Sony Computer Entertainment president--

AS: What do you think of the competitors' machines? Will Sony continue to dominate the gaming market?


Ken Kutaragi: Microsoft is trailing behind us, but they are not a threat. They are good at improving [on products], but we will be advancing to the next level with revolutionary technology. Beating us for a short moment is like accidentally winning a point from a Shihan (Karate master), and Microsoft is still not a black belt. Just like with their operating systems, they might come out with something good around the third generation of their release.

It isn't a bad thing to have a high price. When we released the original PlayStation at 39,800 yen ($368), Nintendo's Super Famicom was in the 10,000 yen range ($100 range). Still, everyone went for the PlayStation. This time, ours [the PS3] will be like a BMW that's equipped with a Ferrari engine. Nintendo's [Revolution] will be something like a new model of a family car. Some people might want it, but if it was me, I'd want to advance to the next level.

AS: Why is Sony's next-generation console adopting a next-generation disc format?


KK: The current DVD [format] had a slow growth during its first three years of release, but it dramatically penetrated [through the market] after the release of the PS2, and its software prices had gone down. By using Blue-ray in the PS3, we hope to boost the amount of available [Blu-ray] software and sales of high-definition TV sets. With enough product [in the market], the Blu-ray will be one step closer to becoming the standard [next-generation] format.

Satoru Iwata, Nintendo president--

AS: What do you think of the competitors' machines? Will Sony continue to dominate the gaming market?


Satoru Iwata: It's questionable what the "horsepower" of the two other companies' consoles will be used for, such as fast calculations and high-definition resolution. Creating game software in high definition will require everything from the [graphic's] models to the background to be redone, and it will bloat up development costs. And yet, it has no use for people that aren't playing with a high-definition TV set. Game consoles are not an essential product in life, so we want to make ours as compact, thin, and as inexpensive as we can so that it won't be viewed with hostility by family members.

AS: What has Nintendo learned from its previous game machine release?


SI: We launched the Nintendo DS last year, and the release of our Nintendogs, which came out this April, is being called the second launch [of the DS, since Nintendogs massively boosted sales of the handheld in Japan]. We want to push the DS's sales with the release of game software during the first year. There's a big gap between people that enjoy games that take time and playing skills, and people that don't. I'm feeling a real sense of danger about the decline in the Japanese gaming population. Patting a dog and telling it to stay [in Nintendogs] is something that anyone can enjoy. We're aiming to increase the population of game players with these new kinds of games.

AS: Sony's PS3 is adopting the Blu-ray next-generation disc format. What about the Revolution?


SI: It will be more beneficial to the consumer if we took the money for [adopting the use of] a next-generation disc format and used it somewhere else where we can present more new fun. Nintendo is a company that likes to see smiles on the faces of people that love entertainment. We're not about selling new kinds of TVs or taking control of the living room.

Link http://www.gamespot.com/news/2005/05/31/news_6126725.html
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Headshop

 

[speng]

You should post the links and refrain from posting whole articles.

A few quotes is cool, but other sites want their ad revenue.

Speng.

 

[Shark Sandwich]

It isn't a bad thing to have a high price. When we released the original PlayStation at 39,800 yen ($368), Nintendo's Super Famicom was in the 10,000 yen range ($100 range). Still, everyone went for the PlayStation.

I think it's a bad sign if they're already softening people up for a high price point. I'll still keep my fingers crossed for $299.

Also, it's a little misleading to compare prices between a new system and a previous-generation one!

 

[mckmas8808]

Yeah I don't know how to take that quote from Kenny Ken. I hope his not thinking of anything crazy like $500. Even he has said that SCE execs have been saying that a 40,000 yen price will be the highest they would go. :?
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Yamaha fzr600

 

[Carl B]

I don't think the European and US markets will endure a higher price point than they're used to at launch (sorry Europe), but if the console launches first in Japan (we'll see where they go with their launch strategy) I can see them charging a little more there at first, as has traditionally been the way Japanese companies price in the domestic market.

 

[speng]

It's all about the games and the console power.

Sony has sold many folks (including me) on the power of the PS3 being more than Xbox 360.

If they can back it up with some exclusives, and great games. I think people will be willing to pay $350 at launch for it. No more though, I'd probably not buy it if it's at $400. I-Pods were selling for over $300 like hot cakes.

Speng.

 

[mckmas8808]

I really, really hate to say this but I would pay up to $500 for a PS3.
I don't know whats wrong with me but I'm hooked. Hopefully nobody from Sony reads these forums, but if I have to pay anything more than $400 I will buy it stomping on the floor and look like this.
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BUY EASY VAPE VAPORIZER

 

[Almasy]

The way I interpret that interview is that Ken Kutaragi considers PSOne´s and PS2´s launch prices to be high, and he is not afraid of doing that again with PS3.

 

[Kolgar]

Interesting!

I think all three execs make very good points. Though for me, the best part of the article by far was Ken Kutaragi saying, "Beating us for a short moment is like accidentally winning a point from a Shihan (Karate master), and Microsoft is still not a black belt."

I laughed so hard, I nearly fell out of my chair!

 

[Carl B]

Interesting!

I think all three execs make very good points. Though for me, the best part of the article by far was Ken Kutaragi saying, "Beating us for a short moment is like accidentally winning a point from a Shihan (Karate master), and Microsoft is still not a black belt."

I laughed so hard, I nearly fell out of my chair!

I love that sort of unblinking arrogance. I enjoyed that part as well.

Makes me wish they would create a fighting game where you could play the various high-profile personalities of the various video game companies.

Kutagari could play the 'hard arrogant type' vs Allard's 'rock star' character.

 

[Acert93]

Makes me wish they would create a fighting game where you could play the various high-profile personalities of the various video game companies.

Kutagari could play the 'hard arrogant type' vs Allard's 'rock star' character.

SSIBM: Console Wars

I can see the smack talking now!

KK: "Our system performs 2TFLOPs and can grill your favorite chicken recipe in 5 minutes!"

Gates: "No one needs more than 640K memory!"

 

[jvd]

I really think the ps3 is going to hit north of 400$ usd for its usa launch. Wihch isn't bad for what you get . I'm sure they are going to do this for two reasons . 1 ) its going to be very expensive to make most likely north of 550$ and so eating 250$ at a 300$ price point would be to much , 2) the blueray drive and other components are going to limit supply so sony can get away with selling out its stock of ps3s at the higher price point

 

[Carl B]

SSIBM: Console Wars

I can see the smack talking now!

KK: "Our system performs 2TFLOPs and can grill your favorite chicken recipe in 5 minutes!"

Gates: "No one needs more than 640K memory!"

Oh man, I can't help but be here dreaming up special attacks for these characters.

 

[Carl B]

I really think the ps3 is going to hit north of 400$ usd for its usa launch. Wihch isn't bad for what you get . I'm sure they are going to do this for two reasons . 1 ) its going to be very expensive to make most likely north of 550$ and so eating 250$ at a 300$ price point would be to much , 2) the blueray drive and other components are going to limit supply so sony can get away with selling out its stock of ps3s at the higher price point

Jvd I don't agree with you on that 'cost to make' assumption, but then again I've never priced it out in my mind - so I'm going to go ahead and do that now and anyone can jump in with their own input if things seem off. These costs I've estimated below are all for a first-gen PS3 system - obviously costs will begin to come down significantly as newer fab processes become available.

1 Cell@90nm: ~$80(?)

256 XDR on 4 512mb devices, in bulk: no idea, but let's say $50

256 GDDR3, in bulk but in a high-demand market: equally clueless, but $40 sounds good

Motherboard manufacture: $20 (?)

First-gen Blu-ray ROM drive manufacture: $80 (some might want to go higher here, but this is where I'm planting my flag)

Card reader for various flash cards: $5

Case: $10

Power supply: $5

RSX@90nm: $5 to NVidia plus $80 (?) in manufacturing

So I'm reaching an initial costs estimate of $375, plus whatever distribution costs... Again anyone feel free to jump in here!

 

[RancidLunchmeat]

More of the same, but it's nice that they haven't changed their stance.

Sony continues to do everything they can to get people ready for, and justify the higher price of their console.

Why BR? Again, Sony's answer seems to be what we all assumed. They believe the DVD drive was a selling point for the PS2 and so BR will be a selling point for the PS3.

The reality is the market is completely different, DVDs were available to buy and rent en mass when the PS2 launched and BR simply will not have the market penetration of the DVD when it launches.

I would have prefered to hear Sony talk about the importance of the BR drive on its actual GAMES. Bigger, more complex, more beautiful because of the increased storage, etc..

Instead, Sony essentially tells us their console will be more expensive because it includes options that don't improve the game performance, but that will be nice for people to have (like the DVD).

Problem is that everybody could see the difference between DVD and VHS quality on their existing sets. It was in your face, visual. Very few will be able to see the difference between DVD and BR, those that do will have the means and desire to purchase stand-alone BR players. And those that need convincing won't be by the time the PS3 launches so they will see no value in the BR drive.

And then N essentially tells us their console won't be as powerful as the other two, they are going to focus on game play and design, and that Sony's inclusion of a BR player is idiotic and will force them to overprice their console.

It seems to me, the top execs are confirming what they've been hinting at and what we've been guessing at for the past couple of months.

 

[BlueTsunami]

I really think the ps3 is going to hit north of 400$ usd for its usa launch. Wihch isn't bad for what you get . I'm sure they are going to do this for two reasons . 1 ) its going to be very expensive to make most likely north of 550$ and so eating 250$ at a 300$ price point would be to much , 2) the blueray drive and other components are going to limit supply so sony can get away with selling out its stock of ps3s at the higher price point

Jvd I don't agree with you on that 'cost to make' assumption, but then again I've never priced it out in my mind - so I'm going to go ahead and do that now and anyone can jump in with their own input if things seem off. These costs I've estimated below are all for a first-gen PS3 system - obviously costs will begin to come down significantly as newer fab processes become available.

1 Cell@90nm: ~$80(?)

256 XDR on 4 512mb devices, in bulk: no idea, but let's say $50

256 GDDR3, in bulk but in a high-demand market: equally clueless, but $40 sounds good

Motherboard manufacture: $20 (?)

First-gen Blu-ray ROM drive manufacture: $80 (some might want to go higher here, but this is where I'm planting my flag)

Card reader for various flash cards: $5

Case: $10

Power supply: $5

RSX@90nm: $5 to NVidia plus $80 (?) in manufacturing

So I'm reaching an initial costs estimate of $375, plus whatever distribution costs... Again anyone feel free to jump in here!

As far as the Blue Ray ROM drive.....I see $80 being a viable price. It doesn't have Blu-Ray burning capabilites (at least I think it doesn't) and I would think that its just the optical lens thats really being taylored towards that format.But in all honestly I see this new technology as the last thing thats driving up the price....its more of what there packing into the PS3. The thing has so many ports its crazy. So I see the actual possible high price coming from the sheer number of items there stuffing into the PS3....not Cell, Blue-Ray and the RSX.....

 

[Acert93]

Why BR? Again, Sony's answer seems to be what we all assumed. They believe the DVD drive was a selling point for the PS2 and so BR will be a selling point for the PS3.

The reality is the market is completely different, DVDs were available to buy and rent en mass when the PS2 launched and BR simply will not have the market penetration of the DVD when it launches.

I would have prefered to hear Sony talk about the importance of the BR drive on its actual GAMES. Bigger, more complex, more beautiful because of the increased storage, etc..

Well it is PR. MS has already taken the position that most games will fit onto 1 8.5GB DVD. It would look bad for Sony to say, "You NEED well over 8.5GB" and then have a lot of games shipping on less than 8.5GB of data, or worse, on DVDs.

It takes too much effort in the MTV PR generation to get into details. So they hit the highlights, the key notes. i.e. in 10 seconds or less why will BR be good for PS3?

"DVD was a a big plus for the PS2 because consumers wanted higher fidelity media. BR will do the same for the PS3 by allowing rich hi definition movies to be played on our gaming console. Consumers want this and we will give it to them".

Vary rarely do they get caught up in responding to their charges. Once you get sucked in it is a losing battle. Right now they are about "Our Vision". They are trying to convince consumers and developers their vision is the right one.

 

[BlueTsunami]

Isn't GTA: San Andreas already using up most of DVD9 disks? (I don't know if thats a rumor or what?).....if thats the case it seems if they where to even attempt GTA: (Place Name Here) with the same size and scope of GTA:SA but in 720p or 1080i it would have to actually span over another disk. I honestly don't mind that...but if you have the technology to fit it on all on disk without DEVs having to cut and move stuff (to fit it all on one disk), then that seems like a good reason to have BR-Disks.....

 

[Carl B]

As far as the Blue Ray ROM drive.....I see $80 being a viable price. It doesn't have Blu-Ray burning capabilites (at least I think it doesn't) and I would think that its just the optical lens thats really being taylored towards that format.But in all honestly I see this new technology as the last thing thats driving up the price....its more of what there packing into the PS3. The thing has so many ports its crazy. So I see the actual possible high price coming from the sheer number of items there stuffing into the PS3....not Cell, Blue-Ray and the RSX.....

I see what you're saying, but just knowing how inexpensively one can get a 'card reader' nowadays in retail, I just pegged it at $5. I really don't think all of that junk will add too much, though I did forget about the usb ports and the various A/V outs. I guess I'll toss in another $10 for that and roll the difference into the motherboard costs.

 

[Acert93]

I see what you're saying, but just knowing how inexpensively one can get a 'card reader' nowadays in retail, I just pegged it at $5. I really don't think all of that junk will add too much, though I did forget about the usb ports and the various A/V outs. I guess I'll toss in another $10 for that and roll the difference into the motherboard costs.

You also have the wireless chip, any non-integrated chips, 3 Gbit ethernet ports, etc...

Btw, your price numbers above are all wild guesses. Like pricing XDR at $50 and GDDR3 at $40. Is that just a guess?

Considering self fabbing vs. outsourcing and R&D it is hard to even get a grasp on it. But I think the closest thing we can get on "cost" is relative measures. CELL is 234-250M transistors. XeCPU is 165M. How will yields compare? RSX is 300M transistors. Xenos is 232M + 100M. Xeno has more transistors, but is the eDRAM more tightly packed? Will having 2 smaller chips increase yields? How about frequency? PS3 has a BR drive, Xbox 360 a DVD. PS3 has a HDD slot and is unknown if it will ship with a HDD, Xbox 360 has a 20GB HDD. Who is making the drive and what technology/size is unknown. PS3 has a lot more ports and includes wifi compared to the Xbox 360.

Without stating a cost, it would appear that MS's machine is cheaper--but there are a lot of variables. Availability of both parts and of units, demand, and how each competitor is doing + royalty fees will have more of a factor on consumer cost than just the cost to make the machine.

Where manufacturing costs come in, I believe, will be in price cuts. If one machine is 20% less expensive to make they can be more aggressive on price cuts. 20% of $300 is $60. i.e. Console A is able to sell at $240 and lose the same amount as Console B at $300, that may be significant.

If MS is cheaper relatively (and that is my guess, but who really knows?) I see MS being aggressive on the pricing front. Allard already pointed out their goal of using larger DRAM and incorperating their chips into on IC. That is how I saw it a while back also.

I will be mildly surprised if Sony comes in the US above $300, and shocked at $400. I think consumers will be happy picking up PS3's at $300 even if MS is at $250. But my gut feeling is once you break that $300 mark all bets are off.

Same thing with going sub $200. $199 is like a magic disposable income point. $199 for a console, especially if it has a pack in, is a great deal. Not many casual consumers drop down $300 for a console. Mainly early adopters, enthusiests, and hardcore gamers. And what do we get in return? Buggy 1st gen HW and a ton of crappy 1st gen games made on alpha kits!

So casual gamers have it made!