Playstation 3: Hardware Info and Price

[Snyder]

I think that's probably more true of Europe than the US. There are already a huge number of households with HDTVs, and by 2008 its going to be 20% under current predictions. All major cable and satellite companies are showing HD content now. Major networks show major hit shows in HD (24, House, Lost, etc) And DTV is being mandated by FCC, so analog broadcasts will go away. Most people who upgrade to a DTV are going to go HD, except for people who buy DTV tuners and attach them to their old boobtube 25" crt sets.

I think 2006 is early for BR except for early adopters, but I think you'll see in 2007 and 2008 that HD-DVD/BR are going to take off.

For me that's one of the most interesting issues regarding the PS3.
BR in the PS3 being a success could happen, but this time much more ifs are part of the equation than with PS2+DVD, where the situation was nearly optimal (A single format certain to be _the_ standard in the forseeable future, all TVs fulfill requirements, no possible copy protection problems whatsoever, and market entry at a point when the format has been around for a while and is already gaining momentum).

Personally, if a huge success of BR in PS3 results in the format war being over sooner than later, I'm all for it.

 

[Sis]

Looking at things from the outside, it seems that Sony intends to follow the same schedule as PS2 since it was the most successful system for them.

It is also planning for a ten year life cycle for PS3 (like PS2). So I think the first planned drop would probably be 1-2 year out. I don't think MS will let them off so easily though.

Sony also has a separate agenda to keep PSTwo as long as possible. So the relatively high PS3 price (hence XB360's and Wii's) will not cannibalize PSTwo sales, until they stop manufacturing them.

These are all my educated guesses. I'm not an insider.

Of course they will want to string out the generation as long as they can. However, if they do wait 1-2 years--let's say 18 months--for the first price drop, then we can surmise that Sony expects ~20 million people to buy the console at 500-600 dollars. This sounds to me as a wholly unrealistic expectation. They are effectively tapping into the hardcore of the hardcore market...

As well, now that we have a hard drive that is required, Sony will be in a difficult spot to drive the costs down to the cheapest level... unless they have some plan for using a flash-based memory approach down the road (and assuming that type of storage is more cost sensitive).

 

[Geo]

They're launching into the heart of Christmas shopping in North America. They're going to have trouble providing all the units that the market wants initially. Why shouldn't they launch with a higher price? Why should the Ebayers make the profits? We know BRD drives, like any new technology, will come down in price/cost over time. I wouldn't be surprised to see them let the hardcore faithful early adopters help them over the cost bump the first 6 months, followed by a $100 price reduction. "Unfair" to early adopters? Well, gee, this is hardly a model they (tech early adopters) are unfamiliar with, don't understand, and haven't made that trade-off many times before with their eyes open.

But that $499 model doesn't make a lot of sense to me, I must admit. It gives up too much that they need (err, BRD without HDMI misses the point entirely for why synergizing is attractive to Sony), without hitting a price point that brings the lower-end of the market into the fold.

 

[DuckThor Evil]

599e, I'm sorry but no thank you. The lower priced model is really not an opition and now that I have seen the videos, I can say that I'm not going to dish out 599e for that, I'm going to buy Wii instead to complement my X360 and wait for price cuts on PS3 no matter how long it will take...

 

[Johnny Awesome]

Console pricing strategies are pretty interesting. I think MS has done great by having their Core unit which will likely be $199 by E3 '07. This is a great mass-consumer price. Even in 2007/2008 I don't think the average gamer is going to care about BR, HDD, HD, etc... , so the Core unit being cheap really helps MS get a lot of units out there.

PS3 pricing is fine for launch, but they're going to have to be aggressive if they want to compete in '07. I don't see how they're going to compete with a Core X360 at $199. From what we've seen of PS3, it's pretty clear that graphically it's going to be almost exactly the same quality as Xbox 360. That's pretty disappointing after a 1-year wait IMO.

As always though, it will boil down to the games. Personally I think Halo 3 vs. MGS4 is very much in MS' favor, but on the flipside FFXIII vs. Blue Dragon/Lost Odyssee is a slaughterfest in Sony's favor. To me this suggests that MS is going to win in the US, lose badly in Japan, with Europe deciding who will win this generation; another reason why the Core X360 is a good idea.

 

[patsu]

Of course they will want to string out the generation as long as they can. However, if they do wait 1-2 years--let's say 18 months--for the first price drop, then we can surmise that Sony expects ~20 million people to buy the console at 500-600 dollars. This sounds to me as a wholly unrealistic expectation. They are effectively tapping into the hardcore of the hardcore market...

As well, now that we have a hard drive that is required, Sony will be in a difficult spot to drive the costs down to the cheapest level... unless they have some plan for using a flash-based memory approach down the road (and assuming that type of storage is more cost sensitive).

Realistic or not, they will continue to track consumer data and will execute based on those numbers. Besides competitive moves from MS, there are also other dynamics like the popularity of HD in 1-2 years time. The high console price would have factored in that portion (and the value perception may be different by then).

As for hard drive, yes, I was thinking there could be cheaper substitute later, especially the 20 Gb one. Sony is a hardware company afterall.

 

[RancidLunchmeat]

As for hard drive, yes, I was thinking there could be cheaper substitute later, especially the 20 Gb one. Sony is a hardware company afterall.

How can there be though? I was under the impression that the $499 model doesn't even have slots for any other type of storage device?

 

[Sis]

Realistic or not, they will continue to track consumer data and will execute based on those numbers. Besides competitive moves from MS, there are also other dynamics like the popularity of HD in 1-2 years time. The high console price would have factored in that portion (and the value perception may be different by then).

As for hard drive, yes, I was thinking there could be cheaper substitute later, especially the 20 Gb one. Sony is a hardware company afterall.

The price trajectory of the PS3, or any electronics device, should be a natural one. It would seem, at face value, that at the PS3's current price, the price would have to plummet at some point in order to hit the sweet spot in an appropriate amount of time. I don't think this is realistic. Instead, I would expect the PS3 to have a high price point for the entire lifetime of the console, possibly not cracking the 200 barrier until 5-6 years into it.

 

[DemoCoder]

Chips that price TMDS/HDCP will continue to slide in price, they are commodoties. I do work in the mobile industry, and I have seen components go from $5 to 5 cents due to integration, yields, and process shrinks. The HDMI/HDCP output is not a big factor in PS3's price. It's CELL, RSX, OPU, GDDR3, and XDR which are some of the biggest components.

Historically, if we look at consumer electronics, prices can start out at $500 and rapidly reduce. When you first bought a DVD player (if you bought in say, 2000) did you ever think it would go as low as $20?

 

[Sis]

Chips that price TMDS/HDCP will continue to slide in price, they are commodoties. I do work in the mobile industry, and I have seen components go from $5 to 5 cents due to integration, yields, and process shrinks. The HDMI/HDCP output is not a big factor in PS3's price. It's CELL, RSX, OPU, GDDR3, and XDR which are some of the biggest components.

Historically, if we look at consumer electronics, prices can start out at $500 and rapidly reduce. When you first bought a DVD player (if you bought in say, 2000) did you ever think it would go as low as $20?

The DVD player I bought in 2000 never went to $20. Instead, a cheap immitation went to $20.

Looking at PS2 prices for both Japan and the US, it looks like it takes Sony roughly 4 years to cut the launch price in half. So in four years we can expect the cheapest PS3 to be $250, while the more expensive unit is $300.

So in four years time we will be at roughly the same price as the PS2 initially started out at.

Link: http://en.wikipedia.org/wiki/Playstation_2#Price_history

 

[NANOTEC]

Nice analysis.

 

[expletive]

Chips that price TMDS/HDCP will continue to slide in price, they are commodoties. I do work in the mobile industry, and I have seen components go from $5 to 5 cents due to integration, yields, and process shrinks. The HDMI/HDCP output is not a big factor in PS3's price. It's CELL, RSX, OPU, GDDR3, and XDR which are some of the biggest components.

Historically, if we look at consumer electronics, prices can start out at $500 and rapidly reduce. When you first bought a DVD player (if you bought in say, 2000) did you ever think it would go as low as $20?

You left out the hard drive again. MS shifted their whole strategy because of the HD cost in the XBox1.

 

[patsu]

The price trajectory of the PS3, or any electronics device, should be a natural one.

Hmmm... you mean the "cost" trajectory. The retail price is a different matter and is more associated with the perceived value and competitive pressure. Also I tend to give a bit more optimism to mass market electronics in terms of cost reduction.

It would seem, at face value, that at the PS3's current price, the price would have to plummet at some point in order to hit the sweet spot in an appropriate amount of time. I don't think this is realistic. Instead, I would expect the PS3 to have a high price point for the entire lifetime of the console, possibly not cracking the 200 barrier until 5-6 years into it.

Follow the market and track record. PS3 will need to go mainstream before PSTwo run out of steam. Sony should have projection for PSTwo and Hi-Def trends internally.

How can there be though? I was under the impression that the $499 model doesn't even have slots for any other type of storage device?
[\QUOTE]

Using the same removable hard disk interface ? I'm just speculating because the theoretical limit of Memory Stick Pro is 32 Gb.

 

[Nite_Hawk]

You left out the hard drive again. MS shifted their whole strategy because of the HD cost in the XBox1.

True enough. I imagine for this reason alone the PS3 will never be cheaper to produce than the xbox360. We'll have to see if the benefits end up being worth it in the end.

Despite this, the xbox still ended up selling pretty cheap. I figure the PS3 will probably drop to a more reasonable price pretty quickly, stay there for a while, and then follow a slower/steadier drop later in it's life.

Nite_Hawk

 

[DemoCoder]

The DVD player I bought in 2000 never went to $20. Instead, a cheap immitation went to $20.

Looking at PS2 prices for both Japan and the US, it looks like it takes Sony roughly 4 years to cut the launch price in half. So in four years we can expect the cheapest PS3 to be $250, while the more expensive unit is $300.

False logic. Sony's price for the PS/2 is based on demand, not cost. Why should they give up margins on the PS/2 when it is selling so well. You don't know how much the PS2 cost has really dropped. We know NVidia's G71 is much cheaper for them to produce, yet they haven't really reduced the price of GF7900 cards very much. Price is dictated by what the market will bear.

 

[DemoCoder]

You left out the hard drive again. MS shifted their whole strategy because of the HD cost in the XBox1.

If in 5 years, people are still buying consoles with no HD, then I think Microsoft did the industry a big disservice by fragmenting the market that developers have to target.

Consoles should have a fixed platform. Only things that don't affect gameplay should vary. If you can't assume an HD, you are restricted in some of what you might develop.

 

[!eVo!-X Ant UK]

OMFG

http://www.konami.jp/gs/kojima_pro/e3_2006/america/index.html

 

[expletive]

If in 5 years, people are still buying consoles with no HD, then I think Microsoft did the industry a big disservice by fragmenting the market that developers have to target.

Consoles should have a fixed platform. Only things that don't affect gameplay should vary. If you can't assume an HD, you are restricted in some of what you might develop.

Yeah well we're not talking about how MS (and Nintendo) is setting the industry back 10 years, we're talking about price...

 

[Sis]

False logic. Sony's price for the PS/2 is based on demand, not cost. Why should they give up margins on the PS/2 when it is selling so well. You don't know how much the PS2 cost has really dropped. We know NVidia's G71 is much cheaper for them to produce, yet they haven't really reduced the price of GF7900 cards very much. Price is dictated by what the market will bear.

No, I'm not using logic to indicate a price. I'm using historical data.

Granted that "past results does not indicate future blah blah blah". However, I feel a lot more comfortable in my guestimate than the other comments that suggest Sony will lower the price "because it's too high right now"--which is what the arguments seem to be.

 

[DemoCoder]

Price didn't save the DreamCast, it didn't save the GC. PS/2 still did better being more expensive. This price argument is getting really old.


Everyone in this thread is just jerking off, mental masturbation. No one knows what is going to happen with the market.