~~Help Me See How the PS3 Is Going to Be Under $500~~

[Alpha_Spartan]

I'm trying to crunch some numbers to see just how in the world the PS3 is supposed to hit the sweet-spot of $300 USD. As I was looking at the PSX, I could not help but compare it to the PS3 feature wise and price wise.

PSX:
--Emotion Engine x 2
--Graphics Synthesizer
--DVD Burner
--Hard Drive
--Wired Dual Shock
--Remote
--32 MB RAM
--I/O: 1 x USB, 1 x FireWire, 1 x PCMCIA
--A/V: RCA, S/PDIF, composite, S-video

Initial Cost: $900

PS3:
--Cell Processor
--RSX (Sony's paying royalties unlike for the PSX)
--Blu-Ray Drive
--Bluetooth Wireless + Controller
--256MB Rambus XDR memory
--256MB DDR3 video memory
--I/O: 6 x USB, various card slots, GbE ports x 3
--A/V: DVI x 1, HDMI x 2

Intial Cost: < $300 (?)

Okay, we have a DVD Recorder from Sony that isn't 1/10 of what the PS3 is expected to be, yet Sony sold it for $900. Okay, I realize that since it's a regular CE product that Sony sold it for a profit. I'll be generous and say that Sony made a $300 profit on each PSX and that it initially cost $600 to produce. The PS3 has hardware that is expensive in comparison to the PSX, I'm talking the BD player, the dual HDMI's, the card slots and the three GigaE's. I cannot convince myself or anyone else that this machine will retail at $300 nor can I convince myself or others that people will pay more money for features alone. Let's face it, the PSX flopped. It proved that contrary to what Kutaragi-san believes, people aren't willing to pay extra for more features. PSX had hundreds of PSX/PS2 games, a DVD burner/recorder and PSP connectivity. However, those were not enough to overcome the insane price.

Look at the Bluetooth controller that's supposed to come packed-in. I can't even buy a bluetooth earpiece for my Cellphone for under $70. Is Sony supposed to sell Bluetooth controllers at a loss when generally speaking, controllers and other peripherals are a profit-maker for console manufacturers? How can I be sure that PS3 Bluetooth controllers will be cheaper than other Bluetooth devices like cellphone earbuds? Since one will be packed-in with all PS3's that will also affect the final cost. Let's say that the PS3 costs $600 to make. Will Sony take a $300 hit per console to stay competitive with the competition? Or will Sony take a $200 hit and sell the console for $399? Am I blowing things out of proportion? Is there a way that the PS3 is cheaper than the PSX that I'm not thinking of?

In my opinion, as we get closer to the PS3 launch, we will see massive feature cuts for the console. I don't believe that Blu-Ray or Bluetooth will make the cut. If we use the PSX as a model, Sony cut DVR capabilities out at the last minute as well as the speed of the DVD writer (from 24x to 12x). I think Sony will be smart and simplify the PS3 taking away the three GigaE ports and one of the HDMI's. We may also see GPU and CPU speed cuts. That's my analysis based on a fair comparison between an almost identical Sony product (albeit a different business model).

I cannot be easily convinced that Sony will take a hit larger than $150-$200 per machine, nor can I be easily convinced that the PS3 we saw at E3 will be the PS3 I buy Fall '06. What do you guys think? What am I missing here? Do you agree or disagree?

 

[one]

PSX:
--Emotion Engine x 2

For PSX, Emotion Engine and Graphics Synthesizer are in a 90nm EE+GS chip. Also, it had 250GB HDD, TV tuner board, ethernet, remote controller, and various software such as XMB. Its first price was $884 (99,800 Yen), so the inial cost is NOT $900.

Last of all, your argument is weak as you don't factor a discount you get when you mass-produce PS3 in the scale incomparable with PSX.

 

[Bobbler]

Comparing it to the PSX doesn't make a lot of sense. Your comparison from the start is rather biased to the point where coming from the direction you are you'd never even allow yourself to see anything other than what you want to.

Compare it to the PS2 and its initial offerings for when it came out (~2000). Many of those things in the PS2 were powerful and "costly" the year it came out. It didn't stop it from being profitable shortly after. There is no reason to believe Sony all of a sudden became incredibly stupid -- PS3 might take a little longer for it to become profitable, but I have a feeling in the end the investment (because of BR and Cell) will probably be worth the price of admission for them.

PS: PSX doesn't cost 600 to make, and didn't when it came out -- there was a lot of profit in the console hybrid. So comparing it to it at all, when you admit you realized it made a profit and was a different business model, is a tad silly.

As for offering you some reasons it won't be 500 when it launches, I'm not going to bother. It seems to me you're set in your ways about what you think the price will be. This thread looks like it is trying to convince other people that the price will be 500 instead of the other way around.

 

[Sean*O]

Another good question is, how can Sony sell the machine with a BRD for $300-400 when the stand alone players are probably going to cost that much, if not more, without discouraging other CE manufacturers from making BRD players and putting them up for sale against the PS3?

Maybe Sony is willing to sell at a loss because it's their format, but what resoanable CE company who has no strings attached to BRD royalties will want to, or could afford to do the same?

This may be an insane idea, but what if the PS3 ends up not shipping with BRD at all because they just can't cut costs down enough in time for launch?

 

[Bobbler]

Another good question is, how can Sony sell the machine with a BRD for $300-400 when the stand alone players are probably going to cost that much, if not more, without discouraging other CE manufacturers from making BRD players and putting them up for sale against the PS3?

Maybe Sony is willing to sell at a loss because it's their format, but what resoanable CE company who has no strings attached to BRD royalties will want to, or could afford to do the same?

Those consumer DVD/CD/etc players are all a very profitable section of the market -- when you aren't trying to pull a profit on it the story changes a bit.

People need to stop comparing consoles to things that are sold for profit -- it isn't comparable unless you know the actual manufacturing cost (because that is the only number that matters -- hell even stores like EB/Gamestop don't sell the consoles for profit -- $1-5, at most, profit on the consoles from what I've heard).

I don't think anyone is going to claim PS3 is going to be profitable right at the start -- PS2 wasn't, PS1 I don't think was. Gamecube is about the only console that was supposedly profitable from the start.

 

[one]

This argument is so recurrent it's rather easier to search this forum instead of bothering to create a topic.

 

[Carl B]

Alpha did you compare the 360 to those PSX specs? Cuz if you did, I just don't see how the XBox 360 can be under $500.

 

[Acert93]

*YAWN*

PS3, Xbox 360, makes no difference. Both will be expensive to manufacturer at launch. While it does appear to me that the PS3 will be more expensive to make in the short term, it does not appear to be that outrageous.

Sony has a proven track record of being able to cut the prices on their consoles to meet market demand. While I would not be surprised with any first Christmas "value bundles" ala PSP or initial high prices (I think some of Kutaragi's comments lean that way) I think it is pretty safe to say the PS3 will be at a competitive price point on the market for the value Sony believes it offers in relation to their competition.

If PS3 has more/better software selection + better features (like BR player) then I don't think Sony will feel out of place charging $50 per unit.

$50/unit goes a far way to cover any additional costs the design may or may not have.

My question is how will Sony&MS get under $300 at launch. Large CPUs, 512MB memory, Top End GPUs, nice periphrials (HDD or HD Optical), etc...

They aint going cheap or cutting many corners this round.

 

[Alpha_Spartan]

PSX:
--Emotion Engine x 2

For PSX, Emotion Engine and Graphics Synthesizer are in a 90nm EE+GS chip. Also, it had 250GB HDD, TV tuner board, ethernet, remote controller, and various software such as XMB. Its first price was $884 (99,800 Yen), so the inial cost is NOT $900.

Last of all, your argument is weak as you don't factor a discount you get when you mass-produce PS3 in the scale incomparable with PSX.

Well maybe you can explain this to me. I'll try to keep up with your obvious intellectual superiority.

 

[Alpha_Spartan]

Alpha did you compare the 360 to those PSX specs? Cuz if you did, I just don't see how the XBox 360 can be under $500.

Yes, I did. It was unspectacular. It has 2.4GHz wireless, DVD9, 3 usb ports and a 20GB hard drive.

I think some people blew a whole lot of things out of proportion in this thread. The fact that some of you immediately went on the defensive proves that you either have some sort of console bias or you percieve that my intent was to provoke you guys. I assure you that it's not. I'll post detailed responses. I have to go to the gym now, I'll post back later.

 

[Powderkeg]

The PSX makes a profit on the hardware.

The PS3 loses money on the hardware, but makes it back on game sales.




And that's why Sony can sell the PS3 for $300.

 

[jvd]

we've had many threads in this forum about it , do a search .