Merrill Lynch's Next-Gen console prediction

Weathermen (women) are analysts. They talke data measured from the atmospheric conditions and determine what the result will be. They've got amazingly powerful computers to aid them. And yet they still can't be sure of getting 24 hours in advance correctly predicted! By the very nature of the areas these analysts work, they're unlikely to be getting it right. It's all too chaotic and unpredictable!

 

that is true.

What is also true and being overlooked in this thread is that the weather changes weekly, daily, hourly and by the minute.

as that new data is received the analysis is updated to reflect that.

Same goes here.

this analysis is based on what is known by the researcher TODAY.

Many are reading this as some kind of sweeping indictment of Sony and their competition with MS in the Next Gen. In reality it is one speculative (based in fact) report about the CURRENT state of affairs based on the information known today.

Depending on what Sony reveals and actually executes compared to their proposals, all of that may change tomorrow and so would the analysis.

Many Sony defenders here are basing their own assumptions on the outcome on no more than (in some cases far less) information or facts. Therefore claiming that this analyst is "up in the night" is being just as hypocritical by defending their own analysis.

 

Hey if the analyst's came here to defend their claims, well that'd be awesome. Certainly none of us are willing to grant quarter when we disagree with each other.

I maintain that most analysts half-ass it, but Shifty you do have a point with the weather. But weathermen are better at predicting the weather than analysts are at predicting stock prices/investor movement, to be honest.

 

Until more information is revealed by Sony and its partners, basing the future (with new technology and associated costs) on their past is not an accurate stance IMO.

It is the only one you have to stand on at the moment however.

 

Maybe by HDD-Enabled they mean ready for the HDD, but not included? Aren't all X360's 'HDD Enabled"?

A $250 premium next X-mas is too ridiculous, I don't see how thay could be predicting that. $250 core is possible. Although, I think MS would be better served to do a $50 price drop, and bundle a a game like Forza 2 or Halo 3, or a couple from 05 like Kameo+PGR3 bundle.

 

By that logic, that means they are implying there will be a 'HDD-disabled' version.

 

Any system that is "able" to accept a HDD is enabled.

HDD-Bundled, or HDD-Included, would be concrete phrases.

 

Most likely. They did use the term "HDD-equipped version" in their report:

Tommy McClain

 

In that case all Sony has to do is cut the performance in half, replace Blu Ray with a DVD drive and they will come out ahead. See why It's not a very thoughtful analysis?

 

If you are inferring that Merrill's language of 'HDD-enabled' means they are simply talking of an xbox 360 capable of using a HDD, because of the way it is phrased that would mean the alternative is to say 'HDD-disabled' or a unit which cannot support a HDD. Since all units will support the HDD, that would make it a redundant statement. i.e. There is no purpose in saying HDD-enabled in the sentence.

In my definiton of their language, HDD-enabled refers to an Xbox360 with a HDD unit included, as opposed to one which does not have a HDD unit included. HDD-enabled serves a purpose in this version to indicate which of the two models they are describing.

 

Avaya has stated the obvious: a game console is not a typical CE. But are you then suggesting the analysts do nothing? That they say, "Whelp, folks, Sony will ownzered everyone cause of the games!"?

In the end, doing a cost analysis is completely reasonable. The problem is that it does not encroach on the emotional aspect of video gaming and therefore misses probalby the largest factor in the battle. This is what I took avaya to mean when he said "The analysis is actually treating the PS3 as a standard CE product" and it was this statement directly that I mean "good post".

Tell me again, though, mckmas, what is it that you disagree with in the article? You need to counter their claims and not just a single one. They say Sony will price the PS3 at cost in order to avoid losses, you say, "No way! Loss leader! PSP!" but you don't respond then to their basis for that claim, which is that they believe the CEO of the company has given guidance stating that they will not take heavy losses into 2007.

I don't know why Stringer gave this kind of guidance, given the launch of a new system could cost a lot of money. But if he did say it, and the PS3 COGS is around $500, then you need to explain why you believe it will release less than that and still somehow be profitable.

Otherwise, your argument boils down to "nuh-uh!".

.Sis

 

"The report predicts that Microsoft will break even in year one of the 360's release and that profits will come in year two."

...No wonder MS dumped Xbox.

 

How large of a market do you see for cell outside of the PS3?
IMHO the investment in the x86 ISA is so great that its inertia will keep Cell and others confined to niche markets.

 

An analytical prediction has also be based on realistic possiblities. Cutting performance by half and replacing Blu-ray by dvd are not something that can happen going by current scenarios.

 

These would strengthen their current weaknesses and change the analysis that ML has done. It does not mean they will come out ahead.

The article is reasonable in stating that the Cell chip was expensive to develop and will probably be expensive to produce. This is not the same as saying "Sony is doomed".

The article is reasonable in stating that Howard Stringer has given guidance saying Sony will not take heavy losses into 2007 (or something to this effect) thus we should expect a huge discount on the PS3. This is not the same as saying "Sony is doomed".

The article is reasonable is stating that the Blu-ray drive is challenging add-on, both in terms of costs and timing. This is not the same as saying "Sony is doomed".

The article is reasonable in stating that MS may have a significant price advantage, given their cash position and their year to year profits, and the apparently cheaper to manufacture Xbox 360. This is not the same as saying "MS for the win!" (Also, I disagree with this one; I don't believe MS can really afford to throw another billion or two into Xbox.)

.Sis

 

To be fair, assuming "HDD-enabled" means the core system and will be priced at $250 at end of 2006 is much more reasonable, even if the wording is poor. The report mentions both HDD-enabled and HDD-equipped, but does not use the term interchangeably.

.Sis

 

anyone seen this from merryll