MS to lose $75 per X360

[satriales]

Allard actually suggested that wouldn't be the case in an interview, with CnVG I think. He said something like there wouldn't be a repeat $450 situation, from which I understood $300 in US became $450 in the UK. Not trying ot get anyone's hopes up, but this time we *might* see it nearer the £200 mark. :?

I'm pretty sure the Xbox was $300 in the US and £300($550) in the UK.

I wouldn't mind paying £300 if that was how much everyone else had to pay, but I don't like paying £300 when Americans get it for £160.

 

[Shifty Geezer]

I think I mangled the memory of Allard's interview/statement. I'm pretty sure he talked of 450 Euro shenanngians. That woudl be £300, $550 I think. But I couldn't find the quote of CnVG to back any of this up.

 

[Acert93]

I think I mangled the memory of Allard's interview/statement. I'm pretty sure he talked of 450 Euro shenanngians. That woudl be £300, $550 I think. But I couldn't find the quote of CnVG to back any of this up.

Yes, Allard did mention they would not see the $300 = £300.

There are obviously fees a US company will have to pay (shipping, localization, etc) and so it will be more expensive in Europe. But he did say they were not aiming to do the tradition "bend of Europe" routine. I expect you still to get hosed, just maybe not as bad

 

[jvd]

would 300$ usd and a £200 launch be good ? that would only be about 370ish usd for europe and would account for shipping costs to another country or what not

 

[Shifty Geezer]

£200 would be unprecedented, a good thing (especially for XB360) and would force the same from other parties.

But, at that price they will be totally underpricing given demand, same as for US. It's be better economics to sell higher to begin with to the select few (US and EU) 'any price' early adopters.

 

[Johnny Awesome]

Not withstanding Teasy's grandstanding devil advocacy, I think it's safe to say that MS has run the numbers and will manage their hardware losses a lot more effectively this time around.

 

[Frank]

Don't forget, that Sony is a hardware company first and foremost, while Microsoft is a software company. Sony can deliver a box that is much more expensive to produce, and make or lose about the same amount as Microsoft when selling it at the same price.

You cannot compare both directly when you only look at the amount of money you would pay to build one of those boxes yourself at all.

 

[jvd]

Don't forget, that Sony is a hardware company first and foremost, while Microsoft is a software company. Sony can deliver a box that is much more expensive to produce, and make or lose about the same amount as Microsoft when selling it at the same price.

You cannot compare both directly when you only look at the amount of money you would pay to build one of those boxes at all.

How do you come up with this ?

If sony makes a more powerfully system it will be more expensive . If the chips are bigger it will be more expensive.

 

[Acert93]

Don't forget, that Sony is a hardware company first and foremost, while Microsoft is a software company. Sony can deliver a box that is much more expensive to produce, and make or lose about the same amount as Microsoft when selling it at the same price.

You cannot compare both directly when you only look at the amount of money you would pay to build one of those boxes yourself at all.

The thing is Sony is getting outside memory technologies (XDR and GDDR3), and outside GPU (NV RSX), and partnered with IBM and Toshiba to codevelop CELL.

MS has outsourced to companies to do the same work, but will be have a 3rd party (read: cheap) fab make their chips.

Sony has some advantages of course. They have fabs to make the RSX and CELL, and will be making their own BR. But those are all still expensive. And making your own stuff is not always significantly cheaper--it can be, but it is not a given.

So Sony has some advantages for sure, but MS has minimized many of these by going with IP deals and using 3rd party fabs, and ommitting certain parts (like BR) that they would be at a significant disadvantage.

 

[hongcho]

As far as the UK prices, when Xbox 1 launched, the dollar was not as weak as these days. So, the pricing may be different this time around.

Hong.

 

[Frank]

Sony has some advantages of course. They have fabs to make the RSX and CELL, and will be making their own BR. But those are all still expensive. And making your own stuff is not always significantly cheaper--it can be, but it is not a given.

So Sony has some advantages for sure, but MS has minimized many of these by going with IP deals and using 3rd party fabs, and ommitting certain parts (like BR) that they would be at a significant disadvantage.

True. But if Sony loses money on production, it will be (mostly) against one of their own departments turning a profit.

 

[jvd]

I thought the only profitable part of sony right now was the game section with the rest of the company bleeding money ? Anyway sony has to pay back all the money invested into the fabs and the r&d and while at some point they will have help doing that i.e cell in other things , the main platforms for cell , xdr and rsx are the ps3 and they have to pay nvidia for rsx and rambus / samsung for xdr ram and gddr ram if rambus wins the case

 

[Carl B]

Some points:

SCEI is not the only profitable portion of the company, movies is also doing very well right now.

In terms of costs from outsourcing vs costs from insourcing, costs are costs regardless of where Kutagari gets his components, and if he sells it for less than he's paying it's going to come out of Sony's bottom line. Now, that being said when trying to flesh out a newly formed semiconducter division as they are trying to do, it makes sense for Sony to insource CPU and GPU production, and the cost-structure should be worth it from a long term perspective as Sony is also looking to use variant chips to replace currently outsourced IC chips for their various consumer electronics. In that vein building a fab made sense and seems to be very forward-thinking, but a fab is very expensive and doesn't make sense for everybody. It will be some time before the 'insourcing' route Sony is taking has paid for itself; which it will of course some day.

As with Cell, Sony will be fabbing RSX themselves, it's just NVidia will receive a nominal 'per part' licensing fee.

All that aside, TSMC is one of the best in the business, and I'm sure Microsoft got a goodprice.

 

[jvd]

I think the prices will be in line with each other .

The gpu costs will be close with ms at an advantage i believe because of the two parts which should give better yields .

The cpu will be less for ms because of the size of course

ms has the price advantage in ram . They are buying large sums of one memory type . Sony is going with xdr and gdr ram . Rambus is asking for a premium plus it will be made in limited quanitys compared to gdr ram .

bluray vs the dvd drive. Ms is at an advantage here , i think we all agree. I would say that hte cost of the dvd drive + hdd iwill be close to the price of bluray perhaps canceling that factor out ? If sony does add a hdd then ms will have an advantage here


Then you have things like the motherboard. Ms should have an advantage here . They will most likely use less layers , they only have a buss from the cpu to gpu to ram vs ram to cpu to gpu to ram . They don't have nearly as many ports or media connectors .


Then factor in the 6 months or so lead on production to iron out bugs and i think ms will enjoy a price premium on the hardware through out the life span of the two consoles .

 

[Carl B]

I have a feeling that as the consoles enter their midlife, Sony will begin to pull away in terms of component costs and enjoy the benefits that come with such a position, but I do think that at least in the beginning, Microsoft will be the one to enjoy the more stable and predictable, and yes in some areas cheaper, component production.

 

[Sean*O]

I don't understand the suggestions that vendors will arbitrarily charge Sony less than they will charge MS to manufacture components? Or that the manufacturing sector will give Sony a special deal?

I would think that components will be cheaper to make for both systems over time. MS may even have an edge because their components will be farther into their life cycle.

 

[Carl B]

I don't understand the suggestions that vendors will arbitrarily charge Sony less than they will charge MS to manufacture components? Or that the manufacturing sector will give Sony a special deal?

Well, the suggestions stem from the fact that Sony IS the manufacturing sector.

 

[mckmas8808]

I think the last few post are pretty much correct. But first I have to say who knows how much Sony is willing to lose on each console. Sony maybe willing to lose more than MS earlier if they have a planned timescale for implementing 65nm technology.

Sony may already have a plan that could allow them to sell the PS3 at a higher loss per console if and when Blu-ray drives, GPU, and CPU fabbing lowers. The final price of the PS3 will kind of tell us if Sony is willing to take that extra loss.

Everyone knows that the PS3 will probably be more expensive, to me its up to Sony to see if they want to lower the price of the PS3 25 to 50 more dollars to be more competitive.

 

[Sean*O]

Sony makes the IBM cell chips, the Nvidia GPU, the Samsung RAM, etc?

 

[Carl B]

Sony makes the IBM cell chips, the Nvidia GPU, the Samsung RAM, etc?

Yes, they will be making the Cell and the GPU, as well as the blu-ray drive. They do not make the RAM, and will also outsource the hard drive.