therealskywolf
Regular
Edge said:
Launched at where? I don't doubt it will cost 299 IF...it launches 6 months after Japan. Because...thats what happened, Ps2 didn't cost 299 in japan when it launched.
Kutaragi's big plan (Why the PS3 could be priced under $399)
- Thread starter mckmas8808
- Start date
Launched at where? I don't doubt it will cost 299 IF...it launches 6 months after Japan. Because...thats what happened, Ps2 didn't cost 299 in japan when it launched.
Joe DeFuria
Legend
Edge said:
Except te XBox360, you mean.
The original statement tied the two issues of designing and fabricating together. They are separate issues. My point is, IMHO, that while designing the ICs and owning the IP confers a huge benefit, it is questionable as to whether fabricating them yourself does. It is a very low margin business. Though owning your own fabrication plants does give you more control over supply.mckmas8808 said:
Joe DeFuria
Legend
Edge said:
IIRC, very comparable (if not slightly better) than U.S. prices. The "premium" is 399 Euro.
How do others feel on this board for a console that costs $399 US in the US, but $472 US in Europe?
Yahoo Finance $399 Euro's to $US:
http://finance.yahoo.com/currency/convert?amt=399&from=EUR&to=USD&submit=Convert
Is that considered a "comparable" price? That is a 18 percent difference by the way.
Yahoo Finance $399 Euro's to $US:
http://finance.yahoo.com/currency/convert?amt=399&from=EUR&to=USD&submit=Convert
Is that considered a "comparable" price? That is a 18 percent difference by the way.
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Joe DeFuria said:
Thats ~465 USD -- then add on ~18% tax? I wouldn't exactly call that comparable or better. Europe consistantly gets the shaft, and X360 is no different -- its just slightly-less-bad compared to previous electronics. If I were in Europe I still wouldn't be happy about paying a game's value more than the other two place its launched ($400 us, ~$360 japan, and ~$465 in europe?). I suppose its certainly better than previous pricing in europe, but it still pains me to see the price differences that friends have to pay for their stuff vs. what I pay.
mckmas8808
Legend
nelg said:
Thus explaining exactly what Joe D. was trying to explain to me. So Joe high demand with better supply due to fabing your own stuff equals a lower price right?
mckmas8808
Legend
Nesh said:
Cost to make the product right? Which was my first point. So, this debate has now come full circle like the....3 .....60.
Revelation
Joe DeFuria
Legend
Nesh said:
During product launch...highly doubtful.
nondescript
Regular
It has been Sony's strategy for several years now to have a heavily vertically integrated business model for consumer electronics. This puts them in a unique position to push out new technologies, because they control the whole stack, from fabrication technologies to finished product, with content to boot. Sounds great - but there's a catch.
The catch is best illustrated by Sun - another vertically integrated company, that does fab, IC design, hardware, OS, and application software. But look where they are now.
The real question is, is it cheaper to do it all in-house? With ODM/OEMs in Taiwan and China really pressing down on profit margins, it might be cheaper to out-source it all (like Microsoft). Sony has done very, very well by producing in-house, and for certain processes (esp. 65nm fabrication) fabbing in-house seems to be a good idea. But as they say, "Past performance is not an indicator of future returns."
The catch is best illustrated by Sun - another vertically integrated company, that does fab, IC design, hardware, OS, and application software. But look where they are now.
The real question is, is it cheaper to do it all in-house? With ODM/OEMs in Taiwan and China really pressing down on profit margins, it might be cheaper to out-source it all (like Microsoft). Sony has done very, very well by producing in-house, and for certain processes (esp. 65nm fabrication) fabbing in-house seems to be a good idea. But as they say, "Past performance is not an indicator of future returns."
Joe DeFuria
Legend
mckmas8808 said:
Sigh.
Demand depends on price.
All else being equal, given a certain price, you can expect "x" demand for the product. At the same time, there is a set amount of supply based on physical capability. "Fabbing your own stuff" does not equal better supply. It might, it might not..."in-house" is not automatically better than outsourcing. Supply might be limited by any number of things you may or may not have control over.
One final time.
Price of PS3 at launch will be set based on primarily two things:
1) Available supply that Sony can produce
2) Competitive landscape. (How well X360 is or is not doing in the market).
But looking at the many revisions of the PS2 chipset, with something like 7 for the GS, and 6 for the EE, till they integrated both of them, shows that Sony is very concerned about cost. I have no doubt we will eventually see an integrated CELL+RSX chip at some point if it makes financial sense. At the very least, there will be a number of revisions using smaller design rules, and probably will be brought down to 45 nm manufacturering, and possibly lower!
This will not only allow the factories to produce more chips at lower cost, but will lower the power requirements of the console, saving money on the power supply, fans, and heat sink, also allowing for a smaller redesigned unit like the PS2.
Sony is very concerned about cost, as much as any Tiawanese factory.
This will not only allow the factories to produce more chips at lower cost, but will lower the power requirements of the console, saving money on the power supply, fans, and heat sink, also allowing for a smaller redesigned unit like the PS2.
Sony is very concerned about cost, as much as any Tiawanese factory.
Sony is just making all kinds of bad bussiness moves.
Come on, admit it!
They have billions in fabs MS showed them they dont need. You know they wish they could copy MS and outsource everything. They're already copying MS and making basically a PC in a box. Though I suppose that trend was fairly inevitable, at least if anybody wanted to compete (maybe if there was just Nintendo, Sony could have gone with their Toshiba GPU, but then the results wouldn't have been nearly as pretty as was possible).
Come on, admit it!
They have billions in fabs MS showed them they dont need. You know they wish they could copy MS and outsource everything. They're already copying MS and making basically a PC in a box. Though I suppose that trend was fairly inevitable, at least if anybody wanted to compete (maybe if there was just Nintendo, Sony could have gone with their Toshiba GPU, but then the results wouldn't have been nearly as pretty as was possible).
Bill said:
Bad business moves. Huh?
Sony can copy MS and outsource everything, but when you already have the factories to not only produce chipsets for the PS3, but the hundreds of other consumer products they carrry, why would they outsource PS3 production?
I agree, MS has been a positive boost in the market, and Sony is being more aggressive, to the delight of Sony fans. Competition is good.
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The production costs doesn't determine price but it does put a lower bound on it. Take the 360 for instance. iSupplies is saying to put everything in a shipping box, it costs about $525 before distribution costs for the 360. Blloomberg says their total cost is $550. As long as it continues to cost $550 to produce the system, it's doubtful that MS will lower the cost of the 360 even if sales drop off. Likewise, Sony is willing to take only so much of a loss on each system no matter what their sales will be. So, yes, they want the demand and supply curve to meet, but if it meets at a level that is financially unfeasable for them, they'll just have to accept lower demand. Look at the PSP. They could have lowered it by $50-100 and it would have sold a lot better, but they'd rather accept lower sales than take such a huge loss on it.
The only real exception to this is when a company is clearing out hardware, such as Sega did with the DC. But at that point, they've just given up and want to get rid of the inventory.
The only real exception to this is when a company is clearing out hardware, such as Sega did with the DC. But at that point, they've just given up and want to get rid of the inventory.
