Merrill Lynch Update: PS3 BOM Approaches $900

[Brad Grenz]

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

Yeah, we're all clear on the fact that these analysts make shit up, right?

I'm pretty sure I remember cost estimates in the $900 range for the PS2 before it was launched, too. They pull this shit out of their asses so they can have something, anything to say to their investor clientel.

 

[Griffith]

Yeah, we're all clear on the fact that these analysts make shit up, right?

I'm pretty sure I remember cost estimates in the $900 range for the PS2 before it was launched, too. They pull this shit out of their asses so they can have something, anything to say to their investor clientel.

hey, remember that we are talking of professional analyst, not of "the inquirer" or "spong" sensationalism

if they says something that you don't like, don't means that they 'pull shit'

 

[pipo]

Yeah, we're all clear on the fact that these analysts make shit up, right?

I'm not disputing the actual number. I couldn't care less as a matter of fact.

All I care for are the launch details...

 

[ihamoitc2005]

Image

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.

Consumer does not care if sony has debt no? They only think "this is amazing deal." Sony has knowledge of this and maybe Sony is "client" of Merryl Lynch and so Merryl Lynch says what Sony wants to say. This is why analysts have much money from big companies. Always give good "PR" for customer companies. This is only my guess because I have no facts to prove this statement. But this is very normal and historical.

 

[Shifty Geezer]

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.

I can't see that working...

Person A : "Can't wait for PS3."
Person B : "Have you heard, PS3 is gonna cost like $900 to make!"
Person A : "Wow. Must be a good machine then, but it'll be out of my price range. Damn. I'll have to miss out for a couple of years."
(PS3 is released at $400)
Person B : "$900 worth of kit for $400? Nah, I've lost interest"

...Or...

Person A : "Can't wait for PS3."
Person B : "Have you heard, PS3 is gonna cost like $900 to make!"
Person A : "Wow. Must be a good machine then, but it'll be out of my price range. Damn. I'll have to miss out for a couple of years."
(PS3 is released at $400)
Person B : "$900 worth of kit for $400? Yeah, count me in!!"

A high announced BOM, low(ish) price makes the system look like a bargain and even more desirable because the punters feel they're getting value for money. Kinda of like, if you saw a Ferrari F430 for £20,000, would you ignore it because you know it normally costs hundreds of thousands, or would you jump at the chance to get expensive goods at that price (even if just to sell it on eBay!)?

 

[pipo]

On top of that, normal people don't read this kind of 'news'.

Only freaks like us.

 

[Titanio]

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 remember they put out a report with both a specific date and sale price for PS2 in Japan, both of which were wrong. I don't know if it was Merill Lynch, but other analysts were indeed forecasting a production cost of $700+ for PS2 pre-launch.

They also seem to have changed their minds:

http://www.gamespot.com/news/2005/06/28/news_6128295.html

Merrill Lynch Japan estimates that the machine's main components--namely its Cell chip, RSX, and BD-ROM drive--will cost about 11,000 yen ($101) each. After adding the other electronics that will be used in the PS3, the machine's production cost goes up to 54,000 yen. ($494)

I think $100 for Cell is far more on the money given that previous Inquirer report about Cell yields and die cost. In fact, it could well be less than that given that they're using 7-SPE Cells.

Besides all the other inconsistencies already pointed out

 

[ihamoitc2005]

Very smart

I can't see that working...

Person A : "Can't wait for PS3."
Person B : "Have you heard, PS3 is gonna cost like $900 to make!"
Person A : "Wow. Must be a good machine then, but it'll be out of my price range. Damn. I'll have to miss out for a couple of years."
(PS3 is released at $400)
Person B : "$900 worth of kit for $400? Nah, I've lost interest"

...Or...

Person A : "Can't wait for PS3."
Person B : "Have you heard, PS3 is gonna cost like $900 to make!"
Person A : "Wow. Must be a good machine then, but it'll be out of my price range. Damn. I'll have to miss out for a couple of years."
(PS3 is released at $400)
Person B : "$900 worth of kit for $400? Yeah, count me in!!"

A high announced BOM, low(ish) price makes the system look like a bargain and even more desirable because the punters feel they're getting value for money. Kinda of like, if you saw a Ferrari F430 for £20,000, would you ignore it because you know it normally costs hundreds of thousands, or would you jump at the chance to get expensive goods at that price (even if just to sell it on eBay!)?

That is good logic my friend. No one loses interest for ferrari because it is expensive. This is why Kutaragi always tells people they must "save money" for PS3. He wanst people to think PS3 is like Ferrari.

 

[Brad Grenz]

hey, remember that we are talking of professional analyst, not of "the inquirer" or "spong" sensationalism

if they says something that you don't like, don't means that they 'pull shit'

They're professional guessers! They don't have any better access to the information they're speculating on then we do. Any exmination of their coverage of the previous generation will show how poor their track record in these matters.

The problem with Spong and Inquirer is that they're rumor mills. They reprint whatever they hear. Maybe it's credible, probably it isn't. These analysts are a different breed. Investors want an idea of production costs so someone gets assigned to come up with a list. They have no knowledge of the state of production or Sony's internal cost projections. They look at what Intel or AMD says it costs to produce a P4 or something, do some rough extrapolation based on frequency and transistor count and write down some silly number. Or they look at the announced price of blu-ray decks and go, "wow, expensive. Blue laser must be like $400!" It's a ludicrous process and I don't think anyone should put any stock in their figures.

 

[Shifty Geezer]

On top of that, normal people don't read this kind of 'news'.

Only freaks like us.

I think that used to be the case, but these days this sort of (mis?)information is popular for journalists. I mean, Sunday newspapers have a trillion pages to fill with random crap, so they'll articles on any old rubbish. Consoles do get coverage. It's quite possible some popular paper will do an article on next-gen (saw one some months back...) which takes this info and plasters it in factual, irrefutable print, so readers of the Express who think themselves pretty educated and on top of things have this idea PS3 cost Sony $900 to make.

There is SO much communication these days you never when something will garner public attention or not.

 

[NANOTEC]

...Or...

Person A : "Can't wait for PS3."
Person B : "Have you heard, PS3 is gonna cost like $900 to make!"
Person A : "Wow..SONY must be desperate and really afraid of Microsoft's new Xbox360 because there's no way they'll be able to sell it at that price. Nobody would buy it too expensive."
(PS3 is released at $400)
Person B : "$900 worth of kit for $400? Damn, you were right. I think I'll pass. Xbox 360 already has a lot of games and it's even cheaper now."

 

[Inane_Dork]

A high announced BOM, low(ish) price makes the system look like a bargain and even more desirable because the punters feel they're getting value for money. Kinda of like, if you saw a Ferrari F430 for £20,000, would you ignore it because you know it normally costs hundreds of thousands, or would you jump at the chance to get expensive goods at that price (even if just to sell it on eBay!)?

You miss the point entirely.

If people think *now* that the PS3 will be anywhere near $900, they'll lose interest in it. They will do so because there's no official price to counter the suspicion. Sony needs to generate interest right now, to keep people from entering next gen. Not that yet another Merril Lynch "estimate" would spark such a thing, but it would be bad.

 

[Slay]

Does anyone has a link with the Merrill Lynch's predictions for the PSP and PS2?

 

[expletive]

I think that used to be the case, but these days this sort of (mis?)information is popular for journalists. I mean, Sunday newspapers have a trillion pages to fill with random crap, so they'll articles on any old rubbish. Consoles do get coverage. It's quite possible some popular paper will do an article on next-gen (saw one some months back...) which takes this info and plasters it in factual, irrefutable print, so readers of the Express who think themselves pretty educated and on top of things have this idea PS3 cost Sony $900 to make.

There is SO much communication these days you never when something will garner public attention or not.

I know we're in a new connected world but if the BOM has any real impact on sales due to customer perception, it would be precedent-setting imo.

 

[dukmahsik]

it's more like half of 900 imo, but who knows with BR

 

[Tap In]

I don't think that these numbers are exact (probably rounded up) but I do think that this may be the reason for the lack of information.

Sony's strategy this gen (PS3) was VERY ambitious (hardware-wise). Unlike MS (X360), who balanced power with cost all along the process (evidently).

Sony is waiting IMO, to release any info until they get a better feel themselves where they will need to be (time and cost-wise).

 

[manux]

Sony's strategy this gen was VERY ambitious (hardware-wise). Unlike MS, who balanced power with cost all along the process (evidently).

Are you serious about this? Sony did make the profits and ms huge losses this gen. And just see with how much profit sony is selling all those ps2s at the moment.

 

[expletive]

Are you serious about this? Sony did make the profits and ms huge losses this gen. And just see with how much profit sony is selling all those ps2s at the moment.

Next-gen is now THIS gen.

 

[mckmas8808]

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

So you actually think that Sony will sell the PS3 (it is a console at the end of the day) for $600+? Why would you ever think such a thing? You would be able to buy 2 Xbox 360s and two games for the same price that you could buy 1 PS3. And you really think Sony would sacifice that?

See this is the main reason why this is great PR for the videogame forums. It's so funny to actually see people fall for it though.

 

[mrdarko]

this looks fishie to me.

reading the text doesn't seem like it was written by a professional analyst.

example:the person that wrote it refer to the ps3 as: PS III,PSX III ect...ect.

i have only ever heard the ps3 refered as PSX III by one person before and i don't think he works for ML.....

not that any of this really matters.....*shrug*