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

[PC-Engine]

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.

Let's break down the PSP's components.

Screen is made by Sharp
Memory made by Samsung
GPU/CPU made by Toshiba
UMD drive made by SONY
Battery made by SONY

Not much difference from Playstation other than the battery which you NEED for a portable anyway not to mention a battery is not a IC.

KK continues to spew more of the same BS...I wouldn't be surprised if SONY is still taking a loss on PSP hardware.

Anyone care to break down PS3's BOM to see if KK BS still holds up?

 

[DuckThor Evil]

Thats ~465 USD -- then add on ~18% tax? I wouldn't exactly call that comparable or better.

WTF! is that tax you mentioned?, I for one don't have to pay any 18% tax on top of the price, besides doing direct Euro to Dollar conversion is not the whole story, for example if dollar get's stronger then we would pay less dollars for X360, but it would still cost us 399 euros, so it doesn't really make much difference to us how many dollars it is, as long it's 399 euros.

 

[Bobbler]

WTF! is that tax you mentioned?, I for one don't have to pay any 18% tax on top of the price, besides doing direct Euro to Dollar conversion is not the whole story, for example if dollar get's stronger then we would pay less dollars for X360, but it would still cost us 399 euros, so it doesn't really make much difference to us how many dollars it is, as long it's 399 euros.

No VAT? I order a lot of stuff online; I guess I forgot that's all it applies to.

 

[Bobbler]

GPU/CPU made by Toshiba

Since when? I thought this and the PSP CPU/GPU dies were fabbed at Sony's fab.

And where would we get ahold of a real PS3 BOM?

edit: Typo: PSP, not PS2

 

[DuckThor Evil]

No VAT? I order a lot of stuff online; I guess I forgot that's all it applies to.

Yes there is VAT, but it's already included in the price.

 

[PC-Engine]

Since when? I thought this and the PS2 CPU/GPU dies were fabbed at Sony's fab.

And where would we get ahold of a real PS3 BOM?

I'm talking about PSP.....you know the portable console that KK is boasting about with regards to cost savings...

Toshiba designed the VME and probably the CPU too since it's a dual MIPS core. Fabbing it inhouse doesn't save you that much money when the rest of the console's parts is outsourced. Again compare PSP to Playstation which KK is doing and not much has changed. PSP is similar to PS2, but I don't see KK boasting about PS2 being cheap to make at launch.

 

[Bobbler]

Yes there is VAT, but it's already included in the price.

Ah, okay -- that's not _too_ horrible then. Thanks for clearing that up.

 

[Bobbler]

I'm talking about PSP.....you know the portable console that KK is boasting about with regards to cost savings...

Err, that was a typo on my part -- I meant PSP... the PSP GPU/CPU is supposed to be fabbed at Sony's plant as well as PS2's. Where did you hear Toshiba had any part of the PSP CPU/GPU fabbing?

 

[PC-Engine]

Err, that was a typo on my part -- I meant PSP... the PSP GPU/CPU is supposed to be fabbed at Sony's plant as well as PS2's. Where did you hear Toshiba had any part of the PSP CPU/GPU fabbing?

I didn't say Toshiba fabbed the chip. I said Toshiba designed it. Fabbing a chip yourself doesn't save you THAT much money, at least not as much as KK likes you to believe. Again look at PS2, nothing cheap to manufacture about it. Kinda ironic KK is boasting about designing and fabbing the chips themselves to lower costs yet PS3 is using a GPU designed by Nvidia and a CPU designed mostly by IBM. PS3 sounds like it'll cost more to manufacture than even PS2 which is totally opposite of what he's trying to say.

 

[Bobbler]

I didn't say Toshiba fabbed the chip. I said Toshiba designed it. Fabbing a chip yourself doesn't save you THAT much money, at least not as much as KK likes you to believe. Again look at PS2, nothing cheap to manufacture about it.

Well, the word made usually holds the implication of fabrication -- but I'll give you that.

Now, where did you hear that Toshiba designed them...? I can't find any mention of Toshiba at all being involved with PSP.

 

[_leech_]

How do others feel on this board for a console that costs $399 US in the US, but $472 US in Europe?

Canadians are getting ripped to, thought not by as great of a margin as Europeans. We're paying the equivalent of $340 US for the Core package and $425 US for the Premium.

 

[PC-Engine]

Now, where did you hear that Toshiba designed them...? I can't find any mention of Toshiba at all being involved with PSP.

I thought it was common knowledge they designed the VME and most likely the dual MIPS cores.

 

[Jov]

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.

I don't think this is the case, but do you have a link to back it up?

Anyway, its pretty much comparing apples to oranges when comparing Sony and Sun Microsystems. Different industry and very very different target customers.

I agree Sony is doing well setting up the right foundation to make the profitable in the medium/long run.

 

[Platon]

Just to clear up the Euro price a bit. The X360 is sold at €399. That includes everything, taxes/VAT or whatever, there are not addidtional costs to that. In some countries the taxes are 25% which means that the hardware itself is being sold for around €320 which is $377. Not bad right?

Now the conversion to $ is not so important, although it is nice to see that we don't pay that much more than our US friends, but what is more important is that the xbox360 is launching at a price that is around €100 LOWER than the xbox1 launched at and that is something I would lke to see if Sony can match. This means not only should they not launch at a higher price than what they launched PS2 (around €499) but actually lower it...

 

[Vince]

Toshiba designed the VME and probably the CPU too since it's a dual MIPS core.

Bullshit. Why is it you can never accept that Sony may actually be good at something? So, instead of admitting the above, you lie your ass off without any proof. Seriously, your entire post sucks. I don't even see the point of addressing the rest of it after your blatent lying shows just how much you care for educated discussion.


On the history of Sony's Virtual Media Engine (VME), taken from Sony's CX-News Vol. 42:

The VME design was started in FY2000 under the guidance of Katsunori Seno(1) and the LSI Design Division. He had previously done research into dynamic reconfigurable logic in the United States and took on the immediate goal of designing such an IC for Sony. Mamoru Yamazaki(2) heard of the project and took an interest in 2000; their collaboration lead towards a Sony R&D program called the Microwatt Project, with the goal of reducing power consumption during ATRAC playback from Sony's current DSP's 20mW draw down to 5mW.

In July 2001, they yeilded a test chip which ran at 4mW. It has since been implimented in several Sony Products, such as the PSP and the Network Walkmen series.

(1) holds the title of: General Manager, Dept 4, Design Platform Division, System LSI Business Group, Semiconductor Business Unit, Sony Corporation.
(2) holds the title of: System Enginee, Department 3, LSI Business Division 2, SoC Business Center, Semiconductor Business Unit, Sony Corporation.

 

[PC-Engine]

Bullshit. Why is it you can never accept that Sony may actually be good at something? So, instead of admitting the above, you lie your ass off without any proof. Seriously, your entire post sucks. I don't even see the point of addressing the rest of it after your blatent lying shows just how much you care for educated discussion.

On the history of Sony's Virtual Media Engine (VME), taken from Sony's CX-News Vol. 42:

The VME design was started in FY2000 under the guidance of Katsunori Seno(1) and the LSI Design Division. He had previously done research into dynamic reconfigurable logic in the United States and took on the immediate goal of designing such an IC for Sony. Mamoru Yamazaki(2) heard of the project and took an interest in 2000; their collaboration lead towards a Sony R&D program called the Microwatt Project, with the goal of reducing power consumption during ATRAC playback from Sony's current DSP's 20mW draw down to 5mW.

In July 2001, they yeilded a test chip which ran at 4mW. It has since been implimented in several Sony Products, such as the PSP and the Network Walkmen series.

(1) holds the title of: General Manager, Dept 4, Design Platform Division, System LSI Business Group, Semiconductor Business Unit, Sony Corporation.
(2) holds the title of: System Enginee, Department 3, LSI Business Division 2, SoC Business Center, Semiconductor Business Unit, Sony Corporation.

Calm down man.

http://www.extremetech.com/slideshow_viewer/0,1205,l=&s=200&a=133950&po=1,00.asp

I guess I got the (Toshiba designed) Media Engine mixed up with Virtual Mobile Engine.

Looks like the dual MIPS cores with its vector units are designed by Toshiba. Since you're such a wealth of information how about confirming or denying this information? Also who designed the GPU?

 

[Phil]

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).

While I agree those two being prime factors, you can't avoid the stake Sony has in having a successful launch as the perception among its potential future buyers. Demand of the PS2 was ridiculously high and yet it still launched at a price of $299. It's quite obviously that they could have gone higher with the price, yet they chose not to, because a higher price would have influenced the general perception on their product. With the $299 price point, people wanted one and demand when through the roof, yet people that wouldn't want to spend more than $299 knew they'd be getting one eventually, rather than being put off by the price. Another reason is; if you price your product too high too early because of demand, you loose potential customers but also you can't drop the price of your product as quick as you would only piss off the early customers that got it at the higher price weeks/months earlier. It makes much more sense to come out at a price you are willing to hold for a year before you start to cut prices at strategic points, as was done with the PS2.

Here's my prediction: If PS3 goes on sale in Spring in Japan, it will be priced at the same price as the premium Xbox360. If it launches in Spring in the US as well (doubtful), it will also be priced at $399. If they launch later - perhaps at a time Microsoft would be expected to bring down their price of the premium Xbox360 to $349 or $299, I'd expect them to sell the PS3 within the same range (+= $50). They'll be building on the perception: we have better hardware, it will last longer and we have blu-ray and are offering much more, yet selling it for the same premium price or for $50 more. (perhaps with memorystick?).

 

[one]

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.

You mean, like Nintendo did in the last gen?

 

[one]

Calm down man.

http://www.extremetech.com/slideshow_viewer/0,1205,l=&s=200&a=133950&po=1,00.asp

I guess I got the (Toshiba designed) Media Engine mixed up with Virtual Mobile Engine.

Looks like the dual MIPS cores with its vector units are designed by Toshiba. Since you're such a wealth of information how about confirming or denying this information? Also who designed the GPU?

The PSP SoC CXD2962GG is all designed by Sony.
http://type.jp/s/2464/psp/ (machine translation)

In this CXD2962GG development, SCEI did design planning, SSNC and Sony LSI design did design development, and Nagasaki Technology Center in Sony Semiconductor Kyushu manufactured it. It's exactly the LSI in which "All Sony" semiconductor technologies concentrated in.

The design of GPU is also by Sony (ISSCC 2004).

 

[Gubbi]

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.

Sun don't fab their own chip, Texas Instruments does.

But besides that they are vertical in their business model, but so is IBM (even more so than SUN) and while SUN is in decline, IBM is doing great.

Vertical integration is not an indicator of doom.

Cheers
Gubbi