News & Rumors: Xbox One (codename Durango)

[Shifty Geezer]

So you think it likely that Microsoft watched Sony announce the 8Gb PS4 in February, didn't consider increasing the RAM. Revealed the 8Gb Xbox One in May, didn't consider increasing the RAM. Priced it in June, didn't consider increasing the RAM. Then suddenly, some Microsoft engineer just woke up one day and said "hey, let's put 12Gb in there".

More likely MS chose 8 GBs, saw Sony's 8 GB, started wondering if they could up their RAM, went ahead with their already planned and paid for (and postponed) reveal, asked around, ummed and erred, and finally saw an opportunity by striking a deal with someone that allows them to make a last minute change.

How do you increase RAM at the same price?

Good negotiating. That could be true. MS contracts in to a RAM provider at the same cost of 8 GBs with a guarantee to buy frmo them at whatever price for however many years, forgoing the opportunity to buy cheaper 8GB RAM in future and securing the supplier with a fixed-price, secure volume of 6 or 8 or whatever Mb chips.

 

[Dave Baumann]

Good negotiating. That could be true. MS contracts in to a RAM provider at the same cost of 8 GBs with a guarantee to buy frmo them at whatever price for however many years, forgoing the opportunity to buy cheaper 8GB RAM in future and securing the supplier with a fixed-price, secure volume of 6 or 8 or whatever Mb chips.

That's entirely the job of a Procurement team and those teams are in a strong position when they have a high volume product and lots of vendors to choose from. Their job is not just to make sure they secure sufficient supply of the components, but also to keep abreast of the market and ensure that they can take advantage of fluctuations in other parts of the market that will affect the components they require. Procurement are one of the most important teams for the margin model of any product.

 

[Love_In_Rio]

More likely MS chose 8 GBs, saw Sony's 8 GB, started wondering if they could up their RAM, went ahead with their already planned and paid for (and postponed) reveal, asked around, ummed and erred, and finally saw an opportunity by striking a deal with someone that allows them to make a last minute change.

Good negotiating. That could be true. MS contracts in to a RAM provider at the same cost of 8 GBs with a guarantee to buy frmo them at whatever price for however many years, forgoing the opportunity to buy cheaper 8GB RAM in future and securing the supplier with a fixed-price, secure volume of 6 or 8 or whatever Mb chips.

You don´t really believe that, right?.

IMO after having presented this to the public:

in which is clear the 8GB of RAM specs PR data, increasing it now and announcing it later would make even worse the PR disaster in which they are. Not because it would be worse from a performance point of view but because they would look without a clear direction, aimlessly, and in a certain way, desperate.

 

[Deleted member 11852]

BOM is vague. In any product you can have a wide range of components from different suppliers, and they'll change over time. When you buy a car or a TV, you can have a different set of internals to someone else buying the same car or TV. Samsung has announced TVs in the past without specifying what screen they come with, and then released three different model numbers (different letter suffix) all with a different screens and different real-world performance.

Many products will have different components for any given specification, but we're not talking about different components for a given spec we're talking about additional components for a higher spec at a higher build price.

If I had invested in Microsoft based on a firm belief that, based on my BOM estimates, Microsoft's announced price and therefore having determine a hardware profitability window, plus game profits, I would be very angry to have Microsoft arbitrarily decide to up the specification, reducing hardware profitability not only up front, for for it's entire life. Sure, materials costs generally fall but is 12Gb RAM ever likely to cost the same or less than 8Gb?

I'm not saying your wrong as I know little about SEC requirements, but I'm not seeing real evidence of product's being tied to specs. Obviously if you advertise a spec and then change it downwards, you have to communicate that or be guilty of bait-and-switch, but if your choice doesn't adversely affect the user's experience (let's say MS get's a deal on 750 MB HDDs at the last minute and puts them in), I can't see any requirement to tell people well in advance.

Like Rangers you're looking at this from a customer perspective. More is good, right? Of course it is! But the SEC isn't there to protect consumers it's there to protect investors.

 

[Rangers]

BOM is vague. In any product you can have a wide range of components from different suppliers, and they'll change over time. When you buy a car or a TV, you can have a different set of internals to someone else buying the same car or TV. Samsung has announced TVs in the past without specifying what screen they come with, and then released three different model numbers (different letter suffix) all with a different screens and different real-world performance.

it's worse than that i think, among the forum nuts who discuss tv's like we discuss video games they have a word for it, "panel lottery"

It means some identical SKU TV's can come with different panel technologies (IPS, and I forgot all the other ones heh heh), and it's a "lottery" which one you get on purchase (of course the average consumer wouldn't notice/care).

Like "Oh, I like that Samsung TV, but too bad it's a panel lottery model"

 

[Deleted member 11852]

More likely MS chose 8 GBs, saw Sony's 8 GB, started wondering if they could up their RAM, went ahead with their already planned and paid for (and postponed) reveal, asked around, ummed and erred, and finally saw an opportunity by striking a deal with someone that allows them to make a last minute change.

The question would be, did Microsoft intentionally mislead investors.

I brought up the SEC thing only because the increasingly bizarre speculation, that seemed to be suggesting Microsoft planned to do this all along. Because that would certainly qualify as misleading investors. However I don't, for a second, believe any of the last-minute specification change rumours, nor do I believe that Microsoft would intentionally mislead investors. It's all moot.

Good negotiating. That could be true. MS contracts in to a RAM provider at the same cost of 8 GBs with a guarantee to buy frmo them at whatever price for however many years, forgoing the opportunity to buy cheaper 8GB RAM in future and securing the supplier with a fixed-price, secure volume of 6 or 8 or whatever Mb chips.

That's not beyond the bounds of credibility. But foundry time can be booked months of years in advance. Just because a company want something, doesn't mean the foundry can supply it in the quantities desired. Plus if the foundry is doing well, it's not in their interest to cut deal likes this. Guaranteed business is nice, reduced profits spanning years and years is not.

 

[Rangers]

The question would be, did Microsoft intentionally mislead investors.

I brought up the SEC thing only because the increasingly bizarre speculation, that seemed to be suggesting Microsoft planned to do this all along. Because that would certainly qualify as misleading investors. However I don't, for a second, believe any of the last-minute specification change rumours, nor do I believe that Microsoft would intentionally mislead investors. It's all moot.

They would not be misleading investors. And the rumors state this is a last minute thing not planned all along. Stop ignoring that...Even if you're original precept is true, which I strongly doubt it's anything more than wishful thinking.

I simply disagree with your premise, can you provide any outside evidence of this? Say, a discussion, or a case where this was applied?

Are you going to admit that according to you, it's impossible for Sony to upclock their GPU, but MS still can btw? Put your money where your mouth is? I suspect you wont, I suspect you'll (of course) try to focus on whatever difference exists between decreased yields and more RAM costs and wiggle out that way.

in which is clear the 8GB of RAM specs PR data, increasing it now and announcing it later would make even worse the PR disaster in which they are. Not because it would be worse from a performance point of view but because they would look without a clear direction, aimlessly, and in a certain way, desperate.

Oh boy some people are just so against this, I mean, really?

Nobody would think it was anything but a good thing. Be serious. Of course the neogaf fanboys, at least a few, would try to find a negative in it, but that would be utterly meaningless in the big picture.

Again, transfer it to other scenarios, if Apple announced they'd just increased the RAM in the upcoming macbook pro, who in the heck would see it as bad??

 

[Shifty Geezer]

You don´t really believe that, right?.

I don't believe it (I rarely believe anything; I'm happy to not know until the truth outs), but it is an outside chance possibility.

Many products will have different components for any given specification, but we're not talking about different components for a given spec we're talking about additional components for a higher spec at a higher build price

Okay, that makes sense, but where does the likes of Samsung's TV variety fit in? They announce a TV and show it with a fancy panel, and then release models with cheaper components. Is that allowed under SEC rulings, to 'bait and switch' as it were, where the BOMs are clearly going to be different?

 

[Rangers]

What if down the line MS releases a 12GB model, with 4GB just for cache (not for games, since 8GB is already in the wild) or something?

I believe Nintendo has done things like this with DS, and Sony with PSP, haven't they? Added non-game RAM to later models.

I dont see how that would be legal under Dsoup's thinking, which is another reason it just doesn't make remote sense (same as what if MS decides to totally reengineer/delay Xbox One?)

What if Nintendo announces a DS XL at a certain res screen, then bumps that res up a little before launch?

What if Ford up their new 4 cylinder by ten HP?

There's so many possible permutations it would be impossible to even enforce this.

Edit: Sony certainly changed the RAM on different PSP's http://en.wikipedia.org/wiki/Template:List_of_PSP_Models

 

[BeyondTed]

Down clocking a chip has no cost implications, adding another 4Gb of RAM does. You're looking at this from the perspective of a customer, put yourself in the position of an investor who, based on Microsoft's Xbox One announcement, including the announced price and specifications, undertook your own analysis of the likely BOM costs vs retail price and figure Microsoft is a good bet for stock investment, only to find out after you bought stock, the BOM has shot up at the last minute.

Don't the SEC take a dim view of things like this?

Don't you think that arguing about the SEC is about as off topic as you could get?

 

[dobwal]

What if down the line MS releases a 12GB model, with 4GB just for cache (not for games, since 8GB is already in the wild) or something?

I believe Nintendo has done things like this with DS, and Sony with PSP, haven't they? Added non-game RAM to later models.

I dont see how that would be legal under Dsoup's thinking, which is another reason it just doesn't make remote sense (same as what if MS decides to totally reengineer/delay Xbox One?)

What if Nintendo announces a DS XL at a certain res screen, then bumps that res up a little before launch?

What if Ford up their new 4 cylinder by ten HP?

There's so many possible permutations it would be impossible to even enforce this.

Edit: Sony certainly changed the RAM on different PSP's http://en.wikipedia.org/wiki/Template:List_of_PSP_Models

Doesn't XB1 has some type of flash cache in it supposedly to make it easier to service main memory?

What could you do with the 4 extra GBs of RAM that streaming solutions that were used last gen can't accomplish especially with a flash cache?

 

[Rangers]

I'm sure there's a million products that have been announced at spec X, and released at spec Y, and if I could find one it would disprove. Unfortunately it doesn't seem to be something you can really search for or prove easily It would have to be something you just remember, since initial specs arent really kept online and so forth.

Also, I think an announcement is all part of this. Take those different PSP models, well one could probably say "the specs were announced for each model". Ok, but then why cant MS say "The Xbox One is now 12 GB instead of 8". Since it's not on sale yet.

I imagine date of sale would be a pretty key defining point too. You cant really project something before it goes on sale except at your own risk. Nobody has much real clue what the Xbox One BOM is, and the error in differing estimates for the 8GB version would be much greater than 4GB DDR3 costs (which is likely nominal)

As a legal point, I doubt "estimating BOM" counts for much of anything, as the margin of error would be so vast. Think of the discrepancy one could estimate just for Kinect alone, depending on what sensors you think it uses and so many other variables, again any of those variables can be >4GB DDR3 cost. I initially assumed "kinect is just a couple dumb cameras, 30 bucks", but later ERP implied it is quite expensive according to what he's heard, like $100 expensive.

 

[Deleted member 11852]

They would not be misleading investors. And the rumors state this is a last minute thing not planned all along. Stop ignoring that...Even if you're original precept is true, which I strongly doubt it's anything more than wishful thinking.

They're not misleading investors becuase the rumours don't say they are!?!

Oh ok then. Never mind

I simply disagree with your premise, can you provide any outside evidence of this? Say, a discussion, or a case where this was applied?

Disagree with my premise? You mean, disagree with what the law says? You've asked twice for evidence and again, I refer to you read the Securities Exchange Act of 1934. You can find this in any library, probably on the web too. If you genuinely wish to learn something, and not simply pretend these laws don't exist, read them. I'm betting you won't.

in which is clear the 8GB of RAM specs PR data, increasing it now and announcing it later would make even worse the PR disaster in which they are. Not because it would be worse from a performance point of view but because they would look without a clear direction, aimlessly, and in a certain way, desperate.

Oh boy some people are just so against this, I mean, really?

Nobody would think it was anything but a good thing. Be serious. Of course the neogaf fanboys, at least a few, would try to find a negative in it, but that would be utterly meaningless in the big picture.

Wall Street hate this stuff. Microsoft's stock tumbled on June 10, after they announced the Xbox One with all the DRM. Ironically it tumbled again on June 19 when Microsoft announced they'd got rid of the DRM. Why? Because it looks like they don't know what they're doing. Not that I care much what Wall Street think, but it makes the point.

Again, transfer it to other scenarios, if Apple announced they'd just increased the RAM in the upcoming macbook pro, who in the heck would see it as bad??

Apple officially announce new products when specifications change.

 

[Dave Baumann]

Seriously, this SEC line of discussion is nonsense. All SEC filings are guised in safe harbor statements that basically says "what we are detailing now is subject to change". Even if a change like this materially impacted MS's overall profitability (highly unlikely), any new product is will be covered under the statements surrounding expected supply costs which will always be subject to change.

If such as change were to occur is it easily as possible that it could be done at no projected loss if their projections accounted for higher market pricing for components than they are actually seeing at the time they procuring the material for production. In that scenario investors (if they even cared) are just as likely to applaud MS for improving the competitiveness of the product without impact to the projections.

 

[blakjedi]

What if down the line MS releases a 12GB model, with 4GB just for cache (not for games, since 8GB is already in the wild) or something?

I believe Nintendo has done things like this with DS, and Sony with PSP, haven't they? Added non-game RAM to later models.

I dont see how that would be legal under Dsoup's thinking, which is another reason it just doesn't make remote sense (same as what if MS decides to totally reengineer/delay Xbox One?)

What if Nintendo announces a DS XL at a certain res screen, then bumps that res up a little before launch?

What if Ford up their new 4 cylinder by ten HP?

There's so many possible permutations it would be impossible to even enforce this.

Edit: Sony certainly changed the RAM on different PSP's http://en.wikipedia.org/wiki/Template:List_of_PSP_Models

Wouldnt that kind of flash cache be on the HDD and not on the motherboard?

 

[Deleted member 11852]

Okay, that makes sense, but where does the likes of Samsung's TV variety fit in? They announce a TV and show it with a fancy panel, and then release models with cheaper components. Is that allowed under SEC rulings, to 'bait and switch' as it were, where the BOMs are clearly going to be different?

That sounds more like a consumer law issue than an SEC regulation issue. In the UK, it's buyer beware, but UK consumer protection means you must be sold goods as advertised, so if Samsung advertise a TV with a 10-bit PVA panel and you buy one and find it's got a 8-bit dithered TN panel, then Samsung have to refund you in full. And answer to the UK's Trading Standards Agency. Again.

But if Samsung are advertising TVs based on a certain contrast ratio (e.g 8000:1), brightness (e.g. 400 nits), backlight (e.g. LED) but not the type of panel, then they have freedom to supply any panel meeting that specification because it's not specified. I can't ever remember a TV being advertised has having a certain type of LCD technology, it's generally generic, i.e. LCD, OLED, Plasma etc.

 

[pMax]

Wouldnt that kind of flash cache be on the HDD and not on the motherboard?

The 12Gb is totally senseless.
You cant put it on DDR3 controller without impacting speed (16Gb, not 12, and still...). You cant put it elsewhere on the board (come on, where do you put it? Between NB ans SB? on PCIE?
You cant re-project your motherboard, redesign it, re-test it, reprint it, re-attach all components in so little time.

Really, I would have expected something crazy like 16Gb ddr3, or out-of-spec DDR3-2800...
But discussing on 12Gb is... really odd.

Ah, and meanwhile re-do a full DRM in 2 months (my fav. part, as its real)

 

[Dave Baumann]

The 12Gb is totally senseless.
You cant put it on DDR3 controller without impacting speed (16Gb, not 12, and still...).

Why?

Take a look at any 2GB GeForce GTX 660 available on the market right now. That is using mixed densities memory because the memory interface is 192b. This is already in place for high performance graphics scenarios, in the scenario being discussed here the it can be even less likely to impact gaming performance since the channels that would have higher density of RAM could be the channel that have the OS reservation space allocated to it which are not being stressed in a gaming scenario.

 

[fellix]

Xbox One prototypes that didn't make it

Before arriving at its final look, Microsoft's Xbox One design team created a heap of designs for the next-gen console, ranging from tiny to tall, smooth to angular, familiar to foreign; many of which Xbox creative director Carl Ledbetter showed off today at Microsoft's Worldwide Partner Conference 2013.

Ledbetter characterized Microsoft's approach as "understated" and "approachable." reports Polygon.

"We wanted to make it simple and elegant, and we wanted it to be crafted and tailored, so it's all about quality," Ledbetter said. "Using those principles, we started to design."

 

[Deleted member 11852]

I'm sure there's a million products that have been announced at spec X, and released at spec Y, and if I could find one it would disprove.

Actually it probably doesn't happen that often as not that many products get advertised and priced so far in advance of availability. Consoles are a bit different though, they rely on a ecosystem of developers to produce games but who also leak like crazy so it's best to reveal your console under your terms.

But you're fixating about spec changes and as I've said, three or four times, it's not the spec change as much as the increase in cost to the product. And 12Gb isn't a necessary spec change, the Xbox One has 5Gb for games. 5Gb! What was the last PC game you saw that required 5Gb RAM? 12Gb looks to be nothing more than a fanboy desire so Xbox One owners can say it has more memory.

Also, I think an announcement is all part of this. Take those different PSP models, well one could probably say "the specs were announced for each model". Ok, but then why cant MS say "The Xbox One is now 12 GB instead of 8". Since it's not on sale yet.

I didn't follow any of that.

I imagine date of sale would be a pretty key defining point too. You cant really project something before it goes on sale except at your own risk. Nobody has much real clue what the Xbox One BOM is, and the error in differing estimates for the 8GB version would be much greater than 4GB DDR3 costs (which is likely nominal)

For somebody who posts a lot about the Xbox One you don't seem to be paying attention to what Microsoft have done. They detailed the specifications and even let journalists take high resolution pictures of the board That's how we know there are sixteen 16-bit Micron DDR3-2133 DRAM chips in there. Because you know the size of those, you can work the size of the other chips and work out the likely costs of them based on the number of transistors. There are some unknowns, there always are, but most analysts peg the BOM to be around $330 - including Kinect. It's not like cameras and microphones are some alien technology with unknown material costs.

But here's the thing. If an investor estimates wrong, that's on them. That's part of the risk of being an investor. But if the company change the product after announcing it, adding something at additional cost, investors can't account for that.

As a legal point, I doubt "estimating BOM" counts for much of anything, as the margin of error would be so vast. Think of the discrepancy one could estimate just for Kinect alone, depending on what sensors you think it uses and so many other variables, again any of those variables can be >4GB DDR3 cost. I initially assumed "kinect is just a couple dumb cameras, 30 bucks", but later ERP implied it is quite expensive according to what he's heard, like $100 expensive.

That isn't a legal point. You're argument seems to be, and correct me if I'm wrong here, but nobody knows how much the BOM for Xbox One really is so dropping in another 4Gb RAM is ok.

But here's my point. That's not Microsoft's money to spend, that money you want them to spend on another 4Gb belongs to the shareholders and investors. This is a case of Microsoft being authorised by the Board to spend $xx million to produce a 8Gb box, as planned. If they have $xx million left over, they don't get to spend it on extras or buy everybody cake. That isn't how business works. Or least not successful business.