Kutaragi's big plan (Why the PS3 could be priced under $399)

M

mckmas8808

Legend
The market research (Scottsdale, Ariz.) said Sony jumped three spots in its 2005 rankings to ninth while NEC fell four spots to 13th. Sony is forecast to reach the highest annual growth rate on the list19 percent. All companies on IC Insights' top-20 list are expected to record chip sales of at least $3 billion this year


By contrast, Sony's chip sales are being driven by growing demand for video game consoles, MP3 players, digital TVs and other consumer systems. IC Insights added that Sony's internal semiconductor use is expected to surge by about 50 percent this year. Only four of the chip makers ranked in the top tenSony, Intel, Samsung and Toshibawere forecast to record higher annual growth in 2005 than the industry-wide rate of 7 percent.
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With Ken the old leader of the semiconductor division this was one of his dreams. With Sony being able to produce more things themselves instead of outsourcing everything. And if you combine this new news with old news from what Ken Kutaragi said months ago about the PSP you can see how it may be possible how the PS3 can be priced between $299 - $399.

But Sony wasn't willing to live with lower margins, especially for Playstation. In unveiling the Playstation Portable in Tokyo last fall, Kutaragi said the game division relied on Sony's semiconductor operations for 50 percent of the box's component value. Aggressive pricing was only possible, he said, because key ICs were designed and fabricated internally, using a 90nm process. "You can't pull off this kind of pricing by depending on off-the-shelf components," Kutaragi said. The first-generation Playstation, by contrast, used ASICs from LSI Logic, a graphics chip from Toshiba, and memory from NEC, Mitsubishi, Toshiba and Hitachi. The only key internally developed component was a Sony disk drive, Kutaragi said.
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So can we know discuss further on how this semiconductor news can positivly affect the PS3?:smile:




*Thanks to Panajev @ GAF (I think he posts here too) for bringing this to my attention.


http://www.eetasia.com/ART_8800382726_499486_0d5e6aa8_no.HTM
 
I think it's impossible, just not feasible for the ps3 to be priced under 399$. But i think it's highly unlikelly for it to cost more than 399 too.
 
therealskywolf said:
I think it's impossible, just not feasible for the ps3 to be priced under 399$. But i think it's highly unlikelly for it to cost more than 399 too.
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How can it be impossible? You can surely say unlikely, but impossible? Why?
 
mckmas8808 said:
So why did it affect the launch price of the PSP?
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Who said it did?

Costs make a product viable or not at a given price point. Costs don't dictate selling price. Demand and supply do.
 
Joe DeFuria said:
Who said it did?

Costs make a product viable or not at a given price point. Costs don't dictate selling price. Demand and supply do.
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Ken Kutargari!!

In unveiling the Playstation Portable in Tokyo last fall, Kutaragi said the game division relied on Sony's semiconductor operations for 50 percent of the box's component value. Aggressive pricing was only possible, he said, because key ICs were designed and fabricated internally, using a 90nm process. "You can't pull off this kind of pricing by depending on off-the-shelf components," Kutaragi said.
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My guess is $299, as that is the price the PS2 launched at, and $399 for a version with a harddrive, but then again, Ken did say people are willing to pay more, so $399, and $499 with a HD.

Stop arguing guys. No one knows the price, and any price Sony chooses will be reasonable.
 
It's really kind of pointless to speculate on PS3 launch price until we can make some estimate of the competitive landscape closer to launch. (In other words, how is X360 being received...what games for 360 have shipped and will be shipping by the time Ps3 launches, etc.)

The price of the Ps3 will be much, much more dependent on how XBox360 is doing (and how well Ps3 manufacturing is going) vs. component costs.
 
Joe DeFuria said:
Read what I wrote.
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I understand the viable/possible thing that you said. So going off what I said earlier and combine it with what you said lets come up with a prediction.

Sony should now be seeing growth in their semiconductor division with the lastest news right? So being that in-house development has helped Sony have a nice viable low price with the PSP, so lets say the PS3 has the same supply and demand as the PSP; could Sony sell the PS3 for less than $399? (I know it's a run on sentence by try to work with me here)
 
mckmas8808 said:
... could Sony sell the PS3 for less than $399? (I know it's a run on sentence by try to work with me here)
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They can and will sell it for less than or more than $399 at launch depending on many factors...least of which is component cost.

At launch, supply will be constrained. Agree?

Component cost will dictate more how fast Sony will be able to bring the price down to the broader market in the years following.
 
Joe DeFuria said:
They can and will sell it for less than or more than $399 at launch depending on many factors...least of which is component cost.

At launch, supply will be constrained. Agree?

Component cost will dictate more how fast Sony will be able to bring the price down to the broader market in the years following.
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I guess it would help if we knew how much the PSP and PS2 cost at launch too. Because we know both of those machines had some kind of supply contraints.
 
mckmas8808 said:
I guess it would help if we knew how much the PSP and PS2 cost at launch too. Because we know both of those machines had some kind of supply contraints.
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The constraints on those were yield constraints, not cost constraints. Though both were clearly loss-leading products at the time of their debut.
 
mckmas8808 said:
Ken Kutargari!!
In unveiling the Playstation Portable in Tokyo last fall, Kutaragi said the game division relied on Sony's semiconductor operations for 50 percent of the box's component value. Aggressive pricing was only possible, he said, because key ICs were designed and fabricated internally, using a 90nm process. "You can't pull off this kind of pricing by depending on off-the-shelf components," Kutaragi said.
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Click to expand...

It would have been a much more insightful comment had he separated the designing and fabricating cost.
 
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