PS3 sales numbers

[quest55720]

The same could be said about the first xbox (Nvidia GPU, build-in HDD, networkadaptor) and the PS2 and yet there was no significant (retail) price difference in the end.

Also, like Jov said, I think sony's experience as an electronics company is already paying off when I look at their agressive cost reduction while the 360 is still suffering from the same designflaws the first model had back in 2005.

Btw I don't think sony will ever release a HDD-less PS3 unit because it's kind of an investment to make people buy digital content on PSN.

No chance sony ever eats the same kind of money MS did with the xbox year after year. MS killed the xbox after 4 years because of costs and losses.

Outside one bad dvd rom out of the 2-3 they used in the xbox. I can not think of any other wide spread problems with the xbox.

 

[Mintmaster]

The same could be said about the first xbox (Nvidia GPU, build-in HDD, networkadaptor) and the PS2 and yet there was no significant (retail) price difference in the end.

That's a terrible example, though. MS lost tons of money on the original XBox right up till its death, while PS2 is probably making a profit right now.

MS and PS sort of switched philosophies. This time, MS devoted its hardware budget to the aspects that affect end product the most: RAM and GPU. The CPU was chosen to rarely be perceptibly outclassed by Cell from the viewpoint of most gamers, and the HDD was made optional because console devs don't need it and value gamers (who think $100 for the premium isn't worth all the extras) are are unlikely to be much of a revenue stream. Blu-Ray/HD-DVD for gaming is only absolutely necessary for a few big budgeted titles, and wasn't ready in time for MS to get their crucial headstart anyway. They made money on accessories instead of packaging it all together.

Another important factor is that the 128-bit bus will allow them to use four 1Gb chips instead of eight 512Mb. Overall, I don't see MS losing its cost advantage.

 

[Arwin]

But while it may be true that Sony could be making mistakes that Microsoft made in previous generations, I'm really not sure that Microsoft learnt the right lessons. Sure, in the previous generation the built-in HDD really hurt Microsoft. But that was the previous generation. This generation is one of patches, downloadables, media and so on. More importantly, this generation developers want and need to use the HDD, whereas in the previous generation only Halo 2 did, really (ignoring for a moment custom soundtracks and the like).

A similar thing could be said in reverse. The PS3 was the inferior machine, and especially in the U.S. there have been periods where the Xbox did really well, and won a lot of critical acclaim through comparisons of multi-platform titles and so on. The PS3 may have tried to hard, but they have continued their trend of creating forward looking hardware.

A much more important lesson Microsoft learnt from the previous generation, in my opinion, was that they needed to have the intellectual property rights of the chips in their machine. That they didn't own the rights for the Graphics chips was an important part of why they kept being a burden right up to the Xbox's demise. They got that right this time.

I think that for an ever increasing time of a console's life cycle, the price of its hardware is going to be much less important than the software available for it. This is another important lesson that Microsoft seems to have gotten at least partly right. By getting the system out early, and making sure that developers were very well supported, they so far manage to make their system look very good, very competitive, and land many titles.

The Core system though is not going to take off. Even that wasn't necessarily a mistake, though - if the Wii hadn't been there, it could very well have taken a share of that console's market instead, especially if they had been smarter and included a memory stick in the 299 price point from day one. Instead, I think the Core is going to be abandoned, as it is all to clear that a HDD cannot be missed this generation, certainly not for the kind of experiences that 360 and PS3 owners have come to expect. The Wii, with its weak online showing and lower audio-visual demands may get away with the 512mb of flash it comes with.

 

[quest55720]

The Core system though is not going to take off. Even that wasn't necessarily a mistake, though - if the Wii hadn't been there, it could very well have taken a share of that console's market instead, especially if they had been smarter and included a memory stick in the 299 price point from day one. Instead, I think the Core is going to be abandoned, as it is all to clear that a HDD cannot be missed this generation, certainly not for the kind of experiences that 360 and PS3 owners have come to expect. The Wii, with its weak online showing and lower audio-visual demands may get away with the 512mb of flash it comes with.

The only reason the core did not take off was it was a poor value and the acessory pricing. There are 10s of millions of people who don't have access to high speed internet. There are also 10s of millions who don't want to take their console online period. A retooled core which I hope happens is perfect for those type of people.

A falcon core with internal or included memory card at 199 would fly off the shelves this fall IMO.

 

[dobwal]

The only reason the core did not take off was it was a poor value and the acessory pricing. There are 10s of millions of people who don't have access to high speed internet. There are also 10s of millions who don't want to take their console online period. A retooled core which I hope happens is perfect for those type of people.

A falcon core with internal or included memory card at 199 would fly off the shelves this fall IMO.

Unless MS drastically reduces the price of all major accessories and creates a greater price gap between the Core and the Premium. Core sales will always be a small fraction of Premium sales.

 

[quest55720]

Unless MS drastically reduces the price of all major accessories and creates a greater price gap between the Core and the Premium. Core sales will always be a small fraction of Premium sales.

If they have a memory card and hd-cable the core person is in the same situation as the premium user. I would say there is a ton of value in a 100 dollars off if they include the memory card and the premiums av cable. If they are not going on line they don't need the head set. Both would have to buy second controller so 2 could play. In the US 199 is the sweet spot when a console starts to get main stream users. Not everyone wants or needs the hard drive. People forget how bad the broadband situation is for people in rural states. If I did not have a broad band connection and I had to choose between a core with a memory card and componet/composite cable or the premium for a 100 dollars more I would take the core to save the money and a game and controller.

 

[dobwal]

If they have a memory card and hd-cable the core person is in the same situation as the premium user. I would say there is a ton of value in a 100 dollars off if they include the memory card and the premiums av cable. If they are not going on line they don't need the head set. Both would have to buy second controller so 2 could play. In the US 199 is the sweet spot when a console starts to get main stream users. Not everyone wants or needs the hard drive. People forget how bad the broadband situation is for people in rural states. If I did not have a broad band connection and I had to choose between a core with a memory card and componet/composite cable or the premium for a 100 dollars more I would take the core to save the money and a game and controller.

A memory card isn't the Core's achilles heel, its achilles heels is its big brother. The Premium is basically a Core bundled with $180.00 dollar in accessories for only a $100.00 more but the demand of the premium is more than the sum of its parts.

Alot of people are gravitating toward the premium just because its says "Premium" and have no idea what constitutes the $100.00 price premium. They percieve it to be better and buy it even though they have no idea whether or not they can fully capitalize on its added value.

Throwing a memory card in isn't going to destroy the Premium's choke hold on the Core's demand and too make the Core more attractive you basically have to make the Premium less attractive and thats not going to happen as the Premium is the key sales driver and it owns the better profit margin.

 

[scooby_dooby]

it is all to clear that a HDD cannot be missed this generation,.

It's not really. Only 60% of 360 owner have logged into live. So even among the early adopers buying mainly at $399, a very large portion are not using their HDD's for more than memory storage.

That's 4million people. Now imagine how that ratio will drop when it reaches your casual gamer at $150 or $199.

 

[quest55720]

It's not really. Only 60% of 360 owner have logged into live. So even among the early adopers buying mainly at $399, a very large portion are not using their HDD's for more than memory storage.

That's 4million people. Now imagine how that ratio will drop when it reaches your casual gamer at $150 or $199.

Exactly that is why a retooled core could be a weapon of mass destruction for MS. It will be by far the cheapest place to play next gen madden and GTA4 this fall. Just un tard it by including storage and a real av cable and lower the price to 199 or even 229 and they will sell.

 

[one]

It's not really. Only 60% of 360 owner have logged into live. So even among the early adopers buying mainly at $399, a very large portion are not using their HDD's for more than memory storage.

That's 4million people. Now imagine how that ratio will drop when it reaches your casual gamer at $150 or $199.

Exactly that is why a retooled core could be a weapon of mass destruction for MS. It will be by far the cheapest place to play next gen madden and GTA4 this fall. Just un tard it by including storage and a real av cable and lower the price to 199 or even 229 and they will sell.

So casual gamers don't use internet now? Enter Wii channels.

 

[scooby_dooby]

So casual gamers don't use internet now?

No I said a large portion don't. As already evidenced by 360 statistics.

And how is the Wii channel penetration in the US btw?

 

[mrcorbo]

That's not a serious issue though. PS2 had been more expensive than XB in the UK for ages, but people are still willing to buy it. If the price differential is small enough, people will ignore it and look at the other factors. Thus even if Sony could price drop below XB360, if the XB360 has the momentum and games, it'll sell more. The big advantage Sony have is, as others have said, lots more room to price drop. The super expensive BRD drive will drop to a price comparable to the DVD drive in XB360. The major components will be shrunk. From that POV, there's not much to distinguish between the two machines price wise when the things become keep. A choice between a $200 XB360 and a $250 PS3 isn't going to be decided on price.

Price is indeed just one factor of many. I even pointed out how a larger retail price can be mitigated by having greater perceived value.

The hope is, if you're Sony, that you can get people to perceive that they are getting sufficient added value for the extra money.

That having been said, price has been and is now a significant factor in the uptake of these systems and looks to continue to be for the foreseeable future. And if there is a tipping point where the broader market is going to embrace one of these systems and it begins to build more serious and sustained momentum Sony is going to have to offer something more with the PS3 to make up for the difference in price vs. the 360 if they hope to get to this tipping point first. I have no idea what this might consist of and offer no predictions on whether they will or will not be able to achieve it. I will say they have begun to move the needle for me personally based on some of the upcoming exclusives and BluRay movie playback becoming more attractive, but it's still got a ways to go

 

[Phil]

These are all good comments, but if you just break it down it would seem PS3 will always be more expensive. If you look at the key areas:

CPU: Cell is bigger and arguably more difficult to fab than Xcpu regardless of size (we have heard a lot that Cell has a lot of logic relative to other chips, making it relatively harder to fab).

GPU: RSX is actually quite large, weighing in I believe at 260mm^2, which is bigger than Xenos+EDRAM. Xenos is still probably at least as expensive due to being split, though.

Blu Ray vs DVD: Seems DVD will have the edge here. Even when it's say, $10 vs $20, it will still be an edge.

Built in HDD in PS3: This is actually one that will take on increasing relevance as prices scale. HDD cost makes up a larger percent of the total as the total shrinks, because HDD costs dont shrink. HDD may be fairly irrelevant costwise in a $600 PS3, but it becomes pretty relevant in a $150 PS3, as Xbox 1 can tell you. Of course, two of three 360 sku's have this, but the Core should be able to plumb extreme low price points that PS3 will have trouble reaching, such as 149 and 99 dollars.

In the end I see enough there to make say, 100 difference even as we reach mass market points.

I don't think you will find many that will disagree on the front that PS3 seems to be more expensive in terms to make. However, that doesn't mean that PS3 will always be more expensive (than the Xbox360) for us consumers. That depends entirely on total profitability, business model etc.

If, i.e. Sony makes a lot more money/profits through blu-ray royalties, 1st/2nd party games and 3rd party game sales, they could afford to sell their console lower than what it costs them to make. All really depends on the business model. If this turns out to be likely scenario or not, will surely depend on PS3s overall performance. After all, it's a gamble: Is it better to have only 30 million consoles on the market but have sold over 70% at a profit or is it better to go for those 100 million consoles but sell 70% at a marginal loss (simply to undercut the competition)? The latter will surely yield much more potential to make money on the software front which could substitute the loss of the console easily.

Just some random thoughts.

 

[SedentaryJourney]

These are all good comments, but if you just break it down it would seem PS3 will always be more expensive. If you look at the key areas:

CPU: Cell is bigger and arguably more difficult to fab than Xcpu regardless of size (we have heard a lot that Cell has a lot of logic relative to other chips, making it relatively harder to fab).

GPU: RSX is actually quite large, weighing in I believe at 260mm^2, which is bigger than Xenos+EDRAM. Xenos is still probably at least as expensive due to being split, though.

Blu Ray vs DVD: Seems DVD will have the edge here. Even when it's say, $10 vs $20, it will still be an edge.

Built in HDD in PS3: This is actually one that will take on increasing relevance as prices scale. HDD cost makes up a larger percent of the total as the total shrinks, because HDD costs dont shrink. HDD may be fairly irrelevant costwise in a $600 PS3, but it becomes pretty relevant in a $150 PS3, as Xbox 1 can tell you. Of course, two of three 360 sku's have this, but the Core should be able to plumb extreme low price points that PS3 will have trouble reaching, such as 149 and 99 dollars.

In the end I see enough there to make say, 100 difference even as we reach mass market points.

I don't. What's the point of being vertically integrated and fabbing your own ICs if you can't pass the savings onto yourself? The HDD will make a price difference but I doubt ANYONE in their right mind is going to compare the cost of a hard drive sporting, low-end PS3 with a skeletal Xbox 360 core--if in fact the core survives at that point.

 

[Arwin]

Man, did anyone see this weekend's 1up show? Good showing for the PS3! It was all about PS3 games, with Heavenly Sword, Ratchett & Clank, MGS4 and MGS4 Online, and wow, let's just say, the future looks bright! Awesome stuff!