Merrill Lynch Update: PS3 BOM Approaches $900

Hell yeah, it makes people think that the PS3 will cost $700. Will Sony says same price as the 360 people will go for no reason. Is Sony paying ML?

 

They also previously said that all three: Cell, RSX, and blu-ray drive cost an even 100.

They also estimated the 360 to cost 340 dollars to make... yet MS is reporting fairly substanial losses at the 400 price point.

Also, observe:

http://rei-rom.com/gallery/albums/userpics/13423/norm_PSX3cost.GIF

http://img216.imageshack.us/img216/5151/ml3600zx.png

Look at their lines for the GPUs. Make no sense.

Xenos starts off 30 dollars more than RSX, but drops 70$ in three years? RSX is cheaper yet only drops 20$ in three years?

 

of course they are probably close. this is not a rumor site with fanguys wanting to create wind. They are advising investors.

that does not mean they are right exaclty or that sony won't be willing to lose a fortune on release though.

 

Don't be so sure. They do a lot of "rounding."

 

Youll have to ask them how they came up with all these numbers as they would probably have to have some reason for them, i certainly cant defend them.

(However, if xenos is a more cutting-edge part than RSX then i could see where there would be more opportunity for it to be fabbed more efficiently than RSX, which may be further along in its lifecycle and have reached a lot of manufacturing efficiencies already.)

Also, as time moves on more accurate information probably becomes available. For example, just because Sony predicted the Cell would cost $100 6 months ago doesnt mean that THEY were actually right. Manufacturers are often wrong on what they think costs might be based on yields, component availability, etc.

 

Since when were these events not mutually exclusive...

 

That doesn't make any sense unless you can explain why this "buffer" doesn't apply to the "after 3 years" colum.

Beyond that, I find $350 for Blu-ray hard to swallow. Sure, Sony dumped a bucket into developing the tech and I'm sure some of the parts take some effort to make; but when it comes down to it the thing is just a drive, a spinny thing with a light on it and a couple of ICs to manage the data.

That is what I get out of this as well.

 

That's rather one-sided, isn't it? I think it would be equally likely that people are shocked that the PS3 cost so much and become disinterested in it. Then when the price is confirmed as $400 or whatever, they've already gotten used to having written it off and the enthusiasm is dead.

If you want to know why I think that situation likely, let's just say I saw similar blowouts in other forums to MS's less-than-perfect showings/screens/decisions/PR.

I mean, if people really believe this, it could even affect shareholder confidence. And that would be really bad.



EDIT: Too, remember that the PS3's biggest console competitor is already out and gaining strength *now*. This works best when there's no recourse.

 

Merrill Lynch historically has pushed MS equities and derivatives to its investors, as they have much vested and do much businesss with the company at the institutional level. That being said, the investment advice and associated prospectus may be unnecessarily conservative and even blatantly negative for MS competition. It seems to be the ML trend to "sway" the market in a way that will ultimately be beneficial for them and their partners. But then again, there's always going to be bias on the part of financial institiutions.

 

Aren't these the same guys that predicted a PS2 costing about $400-500, but yet Sony still sold it for $299.99 here in the US?

 

I stopped reading the report when they couldn't get such things as the capitalization of product names correct. Why would I trust the numbers after that simple error?

 

Xenos starts off as two chips. GPU + EDRAM. However, thanks to new processes, it becomes one chip and thus saves (relatively) a LOT of money. RSX starts out as one chip. new processes make the chip cheaper. Its is certaintly possible for the Xenos to cost more than the RSX but end up cheaper after 1 or more changes in processes.

 

900 $?

ok, but they say that after 3 years the cost will be only 340$ so the solution for Sony is to be late of 3 years with launch

 

Yep leads me to not even consider this ML estimate at all. Will Sony really want to lose say $500 per console to match the X360's $399 price?

 

I think that, if all this is true, Sony will go in the middle.. 599-649 $
but at this time Microsoft will change the price, premium at 349$, core at 249$
and......

HALO3 Bundle
Premium+ Halo3 399$

if Sony will point to 499$, Microsoft will react with
Premium 299$ - Core 199$
HALO3 bundle 349$

IMO

 

Great PR for Sony.

 

There are more errors in this article. Might as well be fake, surely they have more people checking this stuff before it gets out?

 

Exactly. Anyhow I don't know how this is good PR for SONY. It's not like people look at PS3 and think to themself "Whoa, I'm getting $900 worth of electronics for $500!". It's more likely to look bad because A) It makes SONY seem desperate and B) Losing so much money on each PS3 unit can't be good because they're already in huge debt.