News & Rumors: Xbox One (codename Durango)

[expletive]

It would make muchly sense if the delay is to let devs polish their game demos more, re-thinking either software or hardware (and especially the latter) isn't really something that can be done at this late stage. This thing has to be working NOW, so that devs have a stable platform to develop for, so that everything can be ready for mass production and release late this year...

Well yes clearly they would prefer the OS or hardware to be locked down but the mere existence of the delay implies they needed further "unplanned" tweaking as some response to what Sony has shown.

Polishing game demos makes no sense, especially since major nelson said this is about the vision and E3 would be about "blockbuster games."

 

[Acert93]

$499. Pay4Play Online. And all they could muster is a $99 GPU. As Nelson says, "Ha ha."

 

[Bagel seed]

BIG profit margins for MS if true. Guaranteed profits since 20 mil units sold is a lock.

 

[dobwal]

Well yes clearly they would prefer the OS or hardware to be locked down but the mere existence of the delay implies they needed further "unplanned" tweaking as some response to what Sony has shown.

Polishing game demos makes no sense, especially since major nelson said this is about the vision and E3 would be about "blockbuster games."

Or they could of delayed to simply rethink how to present the unveiling itself. It's a marketing event and a very important one at that. Delaying under such circumstances is a common strategy.

 

[AzBat]

While I agree that $500 is crazy price I do understand that they launched the 360 at $400 but they weren't including a relatively expensive accessory like the Kinect either. There's going to be a lot in that box besides the box & controller. Stuff adds up. I sure hope it's not $500, but at this point I'm not going to be surprised either.

Tommy McClain

 

[dagamer]

$499. Pay4Play Online. And all they could muster is a $99 GPU. As Nelson says, "Ha ha."

As far as I can tell, the only time the razor/razor blade model has ever really worked was with the Genesis, PS1, and PS2. Every other console that has sold for a loss has never made it's money back for one reason or another. Console makers pouring billions to essentially subsidize consoles and publishers funding AAA titles with $50+ million budgets. Maybe the industry as a whole stretched itself too far in the pursuit of HD with motion capture, voice acting, teams of hundreds of artists to make a single game that just ends up flopping because it didn't sell 6 million units so it was profitable. Perhaps that's not how the game should be played anymore.

 

[Rangers]

$499. Pay4Play Online. And all they could muster is a $99 GPU. As Nelson says, "Ha ha."

yeah, that's actually really true if true.

that said, it annoys me how people just accept and comment on certain rumors as fact. i doubt it'll be 499. last time thurrott said 300/500 he sounded like he was just throwing it out there and had no actual clue. plus, it'd be surprising if there wasn't more than on sku. so maybe you'd get 399/499, if you see 499 at all? my hunch is still 399 for the top end sku though i'm hedging a bit.

also, more goes in a console than you think, from memory i threw something together like this on gaf and was surprised how quick it added up:


Ram-30
hdd-30
motherboard-40
blu ray-20
kinect-30
power supply brick-20
casing, cables etc-20
a controller-20

total=210 without SOC

that gets you up to 210 bom without the all important all in one SOC, which you can add whatever you wish for, but presumably at least 100, possibly on up to 200 if you buy the esram is super difficult to manufacture stuff. it also points out there's just a lot of non-gaming tech in these things. read bkilians posts to get a sense that the R&D to make kinect work alone must have been pretty expensive, apart from the BOM. and then there's the various arm chips rumored for low power modes and things like that too, and blu ray, and a hard drive.

plus packaging, marketing, assembly, shipping, retailer margin...you get to 400+ pretty quick.

but overall i see both sides, lol. i agree with your post while at the same time understanding an opposite reasonable case can be made it appears.

 

[GrimThorne]

$499. Pay4Play Online. And all they could muster is a $99 GPU. As Nelson says, "Ha ha."

Considering that Microsoft took a $125 per console hit during the 360's and Xbox1's launch, the actual costs of the new console could be closer to $650. But Durango (as we know it) doesn't add up to a $650 machine at all.

So either it's Kinect, the new controller, or some other component that would be driving such costs. I'd like to think it's the internals but there's no way to be sure about that until we see final silicon.

 

[Rangers]

Considering that Microsoft took a $125 per console hit during the 360's and Xbox1's launch, the actual costs of the new console could be closer to $650. But Durango (as we know it) doesn't add up to a $650 machine at all.

So either it's Kinect, the new controller, or some other component that would be driving such costs. I'd like to think it's the internals but there's no way to be sure about that until we see final silicon.

It's likely none. I wish people would stop saying Kinect is super expensive it's just not reasonable. It's probably 30-40 TOPS BOM. You can get a Kinect at Wal Mart all day for $89. Plus they're taking the motor out of the next gen Kinect which is surely one of the largest costs.

The new controller is the same as the old except "slightly smaller" according to rumor. There is no screen or anything.

My logical opinion IF this 499 is even true (and again that ignores multiple SKU price points) is simply MS has a new philosophy, per bkilians hints, and simply by and large doesn't want to lose money on hardware anymore. Rather than MS subsidizing it to the tune of maybe $100 like 360 at launch, you would be paying the real cost for Durango. In other words yes, greed. Do I agree with such a penny pinching strategy for a company that rakes in $6 billion profits quarter after quarter? Heck no.

 

[GrimThorne]

It's likely none. I wish people would stop saying Kinect is super expensive it's just not reasonable. It's probably 30-40 TOPS BOM. You can get a Kinect at Wal Mart all day for $89. Plus they're taking the motor out of the next gen Kinect which is surely one of the largest costs.

The new controller is the same as the old except "slightly smaller" according to rumor. There is no screen or anything.

My logical opinion IF this 499 is even true (and again that ignores multiple SKU price points) is simply MS has a new philosophy, per bkilians hints, and simply by and large doesn't want to lose money on hardware anymore. Rather than MS subsidizing it to the tune of maybe $100 like 360 at launch, you would be paying the real cost for Durango. In other words yes, greed. Do I agree with such a penny pinching strategy for a company that rakes in $6 billion profits quarter after quarter? Heck no.

Just going by Paul Thurrott's assessment. Considering that he nailed the very date of the Xbox reveal almost a month ago, I would say he's probably got a better lead on this than most sources out there right now. He seems to think it's going to be $499, and even restated that again today.

He doesn't claim to have all the answers and even states clearly that there are alot of unknowns still surrounding the console. So he admits honestly that he's waiting like everyone else for specifics on things like BC, Xbox Surface (I was actually surprised he threw that in) and even the name of the console.

So we'll see what happens.

http://windowsitpro.com/paul-thurrotts-wininfo/here-comes-next-xbox

 

[Platon]

While I agree that $500 is crazy price I do understand that they launched the 360 at $400 but they weren't including a relatively expensive accessory like the Kinect either. There's going to be a lot in that box besides the box & controller. Stuff adds up. I sure hope it's not $500, but at this point I'm not going to be surprised either.

Tommy McClain

On he other hand, the 360 had a state of the art GPU, comparable to the high end PC GPUs out at the time, actually maybe even better. There is no such GPU in the next xbox, which seems to be more comparable to mid range PC cards. Having kinect there though could maybe bring up the cost as to having a high end card and of course the 360 most likely cost more than $399 to produce, a cost that MS covered, something they might not want to do anymore...

 

[Michellstar]

Comon guys, even MS expected de SOC to cost around 50$
And it was a multi GPU (System and apllication) and BC included

499$ is excesive even with Kinect, given the leaked specs

 

[Shifty Geezer]

499$ is excesive even with Kinect, given the leaked specs

From a consumer POV. One can point to Apple products and make exactly the same argument, but it'd be stupid for Apple as a business to lower their prices. That's the nature of business and there's little point to argue against it here; MS will charge as much as they can to maximise profits and should be expected to. By all means people can express a disinterest in buying at that price, but there's no legitimate argument to be made within our culture to set the retail price according to BOM.

 

[AlphaWolf]

What if $499 included 2 years of live? Because if you look at the suggested pricing it was $299 + $10 a month over 2 years with live, that's $549. $499 without live would be quite a bit more money which doesn't make sense.

 

[wco81]

Not likely, since XBL is a cash cow.

They may be betting that most people will perceive of the Xbox and PS4 as largely the same, performance-wise. Or in the same ballpark at least.

So they can price it at parity with the PS4 or even a premium if they think Kinect is the new waggle.

 

[Shifty Geezer]

It's even possible to generate a sense of a premium product by hiking up the price. Launch at $500 and people think it's a high quality product worth having that they can't afford. Drop it to $400 then $300 and now you have prestige and value, caused chiefly by a higher launch price. The vary basis of brand value in fashion is basically a high price. Plenty of designer watches and glasses and clothes are no better, or even worse, as practical product versus cheaper rivals, but the inflated pricing makes the shoddier products more desirable.

The real question here is what is MS's long term strategy and how do they hope to monetise the business. Do they want a rapid adoption, or have they another strategy? Common wisdom says in the console space, you want critical mass ASAP as that makes the platform self-sustaining. MS may be confident that they'll get 10 million sales somewhat regardless of price (when 360 launched, it was commanding a premium on eBay, meaning MS could have launched at $100 more and not had hardware losses selling through their first few batches of consoles) and are happy to 'tax' (or milk, depending on your preferred analogy ) their fanbase and early adopters.

 

[Grall]

It's even possible to generate a sense of a premium product by hiking up the price.

That did not work super great for sony with the PS3. We also have continuing poor economic situation with high unemployment, and erosion of traditional gaming by portable products, so I doubt this $500-premium strategy will be terribly successful for MS, especially if sony was to launch PS4 at $400.

 

[AlphaWolf]

Not likely, since XBL is a cash cow.

They may be betting that most people will perceive of the Xbox and PS4 as largely the same, performance-wise. Or in the same ballpark at least.

So they can price it at parity with the PS4 or even a premium if they think Kinect is the new waggle.

If not it simply means one of the two price structures is wrong. The subscription model is unlikely to provide significantly better value which it does as suggested by thurott.

 

[SedentaryJourney]

Well honestly about the best fit is some combo of a clock/spec/RAM bump.

I mean honestly, what else would "better position against" mean? It could mean lots of things, but one is the most obvious.

Took them an extra month to come up with the design of the console. Major Nelson forced their hand by twitter bashing the Sony event.

Anyhow it will be hard to sell the Xbox as a premium device if PS4 comes out at the same time with better performance. Exclusive content is going to have to be their main draw and let's hope MS do more than the usual Forza, Halo, and Gears. Whatever they're working on with Crytek better be fire.

 

[Shifty Geezer]

That did not work super great for sony with the PS3. We also have continuing poor economic situation with high unemployment, and erosion of traditional gaming by portable products, so I doubt this $500-premium strategy will be terribly successful for MS, especially if sony was to launch PS4 at $400.

That depends how quickly the price can be made mainstream (assuming MS wants large install base). PS3 was stuck at a high price due to high BOM. With a low BOM, MS can release as a premium product and then price drop substantially. I'm not saying that's a good strategy, or bad (I'm no authority in business practice!), but it would justify the rumoured $500 price point as one approach to maximising profits without necessarily crippling adoption. Launch high, drop quickly.