Merrill Lynch's Next-Gen console prediction
- Thread starter mckmas8808
- Start date
mckmas8808
Legend
scooby_dooby said:
Look lets start over. My bad for being rude to you (as a man I can say this), but I don't listen to analysts. I listen to people that work in the industry and will use the actual product. If I had listened to ML in 1999 I would have thought that PS2 games would be $70. I would have thought that the PS2 would debut at 45,000 yen.
I'll rather listen more to what Sony has to say about their own product.
scooby_dooby
Legend
Fair 'nuff.
To be fair, this report inly says we 'might' see a $499 PS3. It says it's possible to have a $250 core(only a $50 drop) against a $499 PS3. Possible, not for sure.
I think most people will agree we'll see a $399 PS3, but it is possible that's simply too low of a price for even Sony to handle.
To be fair, this report inly says we 'might' see a $499 PS3. It says it's possible to have a $250 core(only a $50 drop) against a $499 PS3. Possible, not for sure.
I think most people will agree we'll see a $399 PS3, but it is possible that's simply too low of a price for even Sony to handle.
in the long run economies scale for the PS3 will be larger than that of the xbox 360 which mean that the cost per unit of the ps3 will be lesser than that of the xbox360 given that Sony Ps3 sell more than xbox360. i can do a quick graph and show off my economic skill if you guy wishes.
dantruon... the economies of scale argument can only apply to the same product... i.e. PS3 has a break even/cost neutral point that is COMPLETELY independent of X360 or any other similar console. We have no idea what the cost neutral economy of scale is for either console therefore your estimation is most likely false.
Just to point out with a real world example, the economy of scale that yielded a profit for Nintendo GC has existed for several years. By designing a cost effective console from the onset, Nintendo has reached its necessary economy of scale to yield a profit even though it has sold less units than the Xbox 1.
Just to point out with a real world example, the economy of scale that yielded a profit for Nintendo GC has existed for several years. By designing a cost effective console from the onset, Nintendo has reached its necessary economy of scale to yield a profit even though it has sold less units than the Xbox 1.
mckmas8808
Legend
Honest and fair as possible
Honestly and please I really want a honest answer from you. Why on two different occasions did we hear that there are whispers of the PS3 to be released for the same price that the PS2 will be released at?
Disclaimer: This question is in no way fanguyish and is not meant to start an uproar or flame battle. Take the question at face value and understand these whispers are coming from Sony's own house.
scooby_dooby said:
Honestly and please I really want a honest answer from you. Why on two different occasions did we hear that there are whispers of the PS3 to be released for the same price that the PS2 will be released at?
Disclaimer: This question is in no way fanguyish and is not meant to start an uproar or flame battle. Take the question at face value and understand these whispers are coming from Sony's own house.
Johnny Awesome
Veteran
The ML numbers are probably a little inflated, but the relative situation is likely correct. It might happen that the PS3 launch in the US for $399 in the Fall of 2006 and the core X360 will be next to it on the shelf for $249 along with about 50 2nd-generation titles, including Gears of War and a quality Japanese RPG or two. This is going to be a good fight. 
scooby_dooby
Legend
mckmas8808 said:
I don't know what whispers you're talking about, but common sense tells me there's no way in hell they launch for $299 in the US. If they do I'm buyin one!
Mintmaster
Veteran
Fair enough. But FYI, this is what I was arguing against:xbdestroya said:
You said you didn't want to repeat the reasons why you though Cell would be cheaper than RSX, and this is all I could find. I assumed that by "economies of scale" you're referring to volume, but the only way that's relevant to your claim is if RSX has a lot less volume. RE defects: I already said that RSX should have no problems, but even if it did, it would be a minor performance downgrade to make it like the 7800GT, where one of 6 shader quads are disabled.xbdestroya said:
I can definately say that the Citigroup numbers are pretty whack. But ML's numbers seem fine. I know you thought their DVD prices were way off, but I think what you pointed to on NewEgg is just old inventory. I don't think they're making anything other than writers now for OEMs. XB360 probably requires a much tighter form factor as well - I'm sure DVD drives for notebooks aren't nearly as cheap. They did pretty well last time with PS2.
The point about XB360 being half the cost of PS2 was stated as a "possibility", and it think it's there to outline that Microsoft can sell the XB360 at a high price until the PS3 launches. The "economies of scale" kick in faster for MS than Sony. I think its even more possible to see a $199 base XB360 up against a $399 PS3.
ihamoitc2005
Veteran
Economies of scale
I do not speak for dantruon but what he is saying is correct because he is talking about relative unit cost. Although the hardware assets of the PS3 are slightly more than of Xbox360, due to higher sales volume, it will actually end up having lower per unit cost than the Xbox360. Further is that PS3 is almost certainly designed for reduction to smaller manufacting process, which reduces per unit cost even more.
However, what "NESH" said is also true, that higher cost of BluRay disc compared to one DVD can slightly impact profit of developers and slightly increase risk for small developers but latest BluRay disc process is not much more producer cost than regular DVD and when games require multiple DVDs, Blu-Ray disc will actuallly be cheaper for game producers because only one BluRay disc needed per game.
blakjedi said:dantruon... the economies of scale argument can only apply to the same product... i.e. PS3 has a break even/cost neutral point that is COMPLETELY independent of X360 or any other similar console. We have no idea what the cost neutral economy of scale is for either console therefore your estimation is most likely false.
Just to point out with a real world example, the economy of scale that yielded a profit for Nintendo GC has existed for several years. By designing a cost effective console from the onset, Nintendo has reached its necessary economy of scale to yield a profit even though it has sold less units than the Xbox 1.
I do not speak for dantruon but what he is saying is correct because he is talking about relative unit cost. Although the hardware assets of the PS3 are slightly more than of Xbox360, due to higher sales volume, it will actually end up having lower per unit cost than the Xbox360. Further is that PS3 is almost certainly designed for reduction to smaller manufacting process, which reduces per unit cost even more.
However, what "NESH" said is also true, that higher cost of BluRay disc compared to one DVD can slightly impact profit of developers and slightly increase risk for small developers but latest BluRay disc process is not much more producer cost than regular DVD and when games require multiple DVDs, Blu-Ray disc will actuallly be cheaper for game producers because only one BluRay disc needed per game.
ihamoitc2005
Veteran
Projection
You are right that no one knows, hence we can only speculate or project based on available information and understanding. This thread topic is one of projection no? So feel free to make projection. If you you are right, you will have satisfaction of having made correct projection, if not you will have learned something new.
Hardknock said:
You are right that no one knows, hence we can only speculate or project based on available information and understanding. This thread topic is one of projection no? So feel free to make projection. If you you are right, you will have satisfaction of having made correct projection, if not you will have learned something new.
mckmas8808
Legend
Hardknock said:
Uh that's why companies have projections. They base their cost of the console based on how many they project to sell. Sony can project to sell lets say 15 million consoles in one year; while MS could project 10 million in the first year.
This affects the price of the console in a way.
SirTendeth
Newcomer
Economies of scale wouldn't be linear.
They would vary based on internal line capacity limits, royalties, distribution lines, etc.
Product redesigns can also change the effective return negatively.
So aside from our lack of real numbers, we also suffer from ignorance to the contractual arrangements, and internal cost points of both companies.
They would vary based on internal line capacity limits, royalties, distribution lines, etc.
Product redesigns can also change the effective return negatively.
So aside from our lack of real numbers, we also suffer from ignorance to the contractual arrangements, and internal cost points of both companies.
Excellent find One. :smile:
Anyway now it's my turn to predict something now: I predict that when PS3 goes into full scale production, it'll be more expensive than the Xbox360. Over time though and thanks to owning their own fabs as well as that CELL can be used in other products to improve yields, I predict that Sony will be in a position to be far more agressive with pricing and that PS3 will drop quicker in costs than the competition.
Anyway now it's my turn to predict something now: I predict that when PS3 goes into full scale production, it'll be more expensive than the Xbox360. Over time though and thanks to owning their own fabs as well as that CELL can be used in other products to improve yields, I predict that Sony will be in a position to be far more agressive with pricing and that PS3 will drop quicker in costs than the competition.
I don't think PS3 price will drop quicker, for the same reaon it didn't with PS2. Sony like to price high and have people think they're paying extra for quality. PS3 wouldn't IMO ever be cheaper than XB360 as that loses the price-based better-quality representation - 'It's the better console, and that's why it costs more. XB360 is cheaper, but you get what you pay for.'
Though it's widely believed that the Xbox 1 hardware cost them huge, we don't know if the Xbox Live business is profitable or not with free accounts and so on. Also they do software giveaway. You call 'hey I want to quit Xbox Live' and you get 1 free game from Microsoft if you don'tblakjedi said:Just to point out with a real world example, the economy of scale that yielded a profit for Nintendo GC has existed for several years. By designing a cost effective console from the onset, Nintendo has reached its necessary economy of scale to yield a profit even though it has sold less units than the Xbox 1.