Next Generation Hardware Speculation with a Technical Spin [pre E3 2019]

I assume this one;

https://pastebin.com/PY9vaTsR

 

This link says $499 price tag tho. It's one thing to believe in hardware specs but pin point down launch titles from a small third party dev is quite a stretch to me. But hell as long as the 14 TF part is true I could care less about the rest.

 

More importantly, claims of GTA 6 in 2020.

 

It says price of $499 with costs to Sony of $599 (a $100 loss) per console initially. Does anyone expect the console companies to switch their business models to take losses on hardware release now?

 

@AlBran

$100 loss sounds a bit steep but is it a necessary evil?

 

Yeah, there's some inconsistencies - maybe there's an original and someone regurgitated it?

I suppose it's possible, but I did think it was a stretch...also means no true GTA for this gen?

Sony took a small loss at the start of this gen, it's nothing completely new...not sure they'd go to $100 though.

 

A $100 loss per console at 5 million first year means a hit of $500 Million to Sony.
A $100 loss per console at 10 million first year means a hit of $1 Billion to Sony.
A $100 loss per console at 20 million first year means a hit of $2 Billion to Sony.

Yet another red flag.

 

I'll try to find the quote, but I recall a Sony exec stating that the PS4 was sold at a loss which would be recouped after the purchase of 1 game and a PS+ membership.

Maybe they have enough data to suggest that, on average, people buy 2 games and a PS+ membership? Something like that, anyway.

 

I only remember profitability relating to a game purchase, did not remember it also needing the network subscription too. Under $18 loss then assuming the 30% platform fee for 1 game. That can be worked through with shipping costs or packing cost improvements. Thets a vast difference to $100 loss.

 

Googled "PS4 sold at a loss" -

https://www.eurogamer.net/articles/...loss-at-launch?&source=email_rt_mc_body&app=n

 

Well that's assuming the loss can't shrink quickly - I seem to recall with PS4 the small loss was only for the first couple months...not that I think Sony would lose $100 per unit, I just suspect the loss might be higher than PS4 as they are in a much stronger position this time around.

 

So we know the 30% platform publisher fee margin, but what do we know about the "profit" margin on Network subscription? It obviously isnt 100% as online infrastructure has costs.

 

Which is why I gave different numbers because a company could easily sell 5 million in the first quarter of launch, right? If you could shrink your loss in only 3 months time, why wouldnt you delay the launch by 3 months then instead and not take the loss?

 

ah, you just confused me saying $100 loss at the start of every line. It might be (like you say) for the first 3 months/5 million, then drop to $50/the PS4 break even after that...they might be happy to 'lose' that much to gain an advantage (maybe a head-start on MS?)

 

What is the factor that will shrink quickly? A die shrink isn't going to happen quickly, I don't think. RAM prices could drop. If there's an SSD, that price could drop but not by $100 worth. I highly doubt PS4's loss disappeared within a couple of months of launch, although technically that's perhaps 6 months after first manufacture when losses are incurred for the initial units.

 

Sony were making a profit just 6 months in;

https://gameranx.com/updates/id/22112/article/sony-now-making-a-profit-on-every-ps4-sold/

I'm not suggesting the whole $100, just enough that they get to a similar scenario where PS4 was at launch (ie, they just needs the customer to buy a game/get PS+ at the same time to break even).

 

6 months makes more sense - maybe 10 months after initial manufacture where RAM prices likely dropped a lot. That was something Sony absolutely knew was going to happen when they selected 8GBs of GDDR5. You'd need a similarly predictable component cost reduction for a new machine if you intended a significant loss leader. A large loss dragged out over tens of millions of consoles is not going to be viewed favourable by any of these companies.

I think at best, a "one game and a year's sub" loss could be sustained if the difference that $50 brought to hardware made the difference and would win market share. It needs to be viewed in terms of "what do we gain from this $2 billion loss of clear profits?"