PS4 initial cost analysis

[NathansFortune]

I would add powersupply and cooling system. Heavy duty cooling system and a high quality powersupply like the original PS3 had isn't cheap.

The guy says in his post:

These figures are preliminary, and do not include assembly costs, power costs, cooling or shipping as the final design has not been shown and can't be estimated at this time.

 

[upnorthsox]

There is only one supplier for 4Gb GDDR5 chips, you can bet that there is a premium attached to them, at least until Micron and Samsung join the market and drive prices down.

Sony already licence ARM, so agreed, that estimate is too high. HDMI is costly, especially if Sony are going for HDMI 2 because of the 4K push from corporate. Sony are releasing 4K TVs this year and 4K OLED next year, I'm sure they would want PS4 to be compatible with these TVs from the start rather than having to release a revision and piss off original owners.

GDDR5 is basically upclocked DDR3 at the chip level, if there's only one supplier it's because they're ready, willing, and able to undercut any competitor on price, not because of any exclusivity. Does that get them a premium? Sure it might, but there's a difference between 30% and 300%, especially for a market that's cutthroat over single digit margins.

 

[dumbo11]

GDDR5 is basically upclocked DDR3 at the chip level, if there's only one supplier it's because they're ready, willing, and able to undercut any competitor on price, not because of any exclusivity. Does that get them a premium? Sure it might, but there's a difference between 30% and 300%, especially for a market that's cutthroat over single digit margins.

Silly question - but after AMD "postponed" 2013, are these chips actually in demand?

 

[babybumb]

They have to have some visibility to GDDR5 availability and pricing next year to make this insane move

 

[mczak]

There is only one supplier for 4Gb GDDR5 chips, you can bet that there is a premium attached to them, at least until Micron and Samsung join the market and drive prices down.

There is a supplier for 4Gb GDDR5 chips yet (I guess Hynix)? Haven't seen even any announcements.

 

[Gubbi]

There is a supplier for 4Gb GDDR5 chips yet (I guess Hynix)? Haven't seen even any announcements.

If Hynix or Samsung has it, they are keeping it a secret since it's nowhere to be found on their product pages.

Samsung had a 4gbit chip on their roadmap for Sep. 2012, but there hasn't been any announcements.

The absolute cream of the crop GPU, the GTX Titan, has 6GB on a 384 bit bus with 2gbit chips (24 of them). More than 4GB on a 256 bit bus or 6GB on a 384bit bus is unlikely for the forseeble future. Since chips are binned according to speed, and there is only need for the fastest bins in the very high end GPU arena, the producers is going to end up with a lot of slow dies nobody has any need for.

It makes much more sense to produce a tons of 2gbit chips, enjoy the economies of scale, bin the dies aggressively, sell the very fastest at very high margins and the rest at a slight profit.

Cheers

 

[djskribbles]

I think they will price match Microsoft. If Ms go high Sony may sell for a profit if not sell for a small loss per unit.

Both console will be within $50 of each other

Unless MS price Durango below $350, I agree. The PS3 was sold at a huge loss AFAIK. I think the cost of the PS4 is probably around 500-600, so 400 is still doable for Sony IMO.

 

[2real4tv]

Thought this was interesting. Someone with connections has done a cost analysis over on neogaf: http://www.neogaf.com/forum/showthread.php?t=514688



Over course this doesn't include R&D, packaging, shipment, etc... What do you guys think?

Maybe someone can answer this question. The R&D put into the PS4 is that part of their current operating costs, doesn't it affect current division profit?

 

[dagamer]

Unless MS price Durango below $350, I agree. The PS3 was sold at a huge loss AFAIK. I think the cost of the PS4 is probably around 500-600, so 400 is still doable for Sony IMO.

PS3 has 2 things PS4 doesn't have to worry about: expensive Blu-ray drive ($125 in 2006, $66 in 2009, only $18-25 today) and PS2 EE/GS chips ($27). What's even more surprising is the staggering $840 cost of the PS3 at launch where they lost $300 per unit. Those days are most certainly gone.

Even if the unit is $599 to manufacture, I don't see them selling it for more than $499 and perhaps get to $349 in 2-3 years while making profit off of each unit.

 

[Jawed]

Has Sony licensed the APU to manufacture it itself, or is AMD making it for Sony?

 

[McHuj]

AMD no longer has manufacturing capability. It's probably TSMC that's doing the manufacturing.

 

[french toast]

PS3 has 2 things PS4 doesn't have to worry about: expensive Blu-ray drive ($125 in 2006, $66 in 2009, only $18-25 today) and PS2 EE/GS chips ($27). What's even more surprising is the staggering $840 cost of the PS3 at launch where they lost $300 per unit. Those days are most certainly gone.

Even if the unit is $599 to manufacture, I don't see them selling it for more than $499 and perhaps get to $349 in 2-3 years while making profit off of each unit.

I dont know what translates to the sweet spot over in the US..but its £299 over here...im guessing $399.. its been proven that anything over the sweet spot in what ever region drastically reduces early up take...

Its a brave move by sony this...

 

[dagamer]

I dont know what translates to the sweet spot over in the US..but its £299 over here...im guessing $399.. its been prove

Define "sweet spot".

 

[french toast]

Define "sweet spot".

Well the point at which consumers think its a good deal compared to a luxury product they really cant afford. ..most of it must be psychological. ..

 

[Shifty Geezer]

There is no OS chip that we've heard about. We've heard about 2 custom chips that do specific jobs and people are jumping to conclusions.

This edited highlights vid shows the slide, explicitly stating a second custom chip.

 

[dagamer]

Well the point at which consumers think its a good deal compared to a luxury product they really cant afford. ..most if it must be psychological. ..

Somewhere around $299 is the magical price point, though I think a good chunk would buy it at $399. At $499, it's still an early adopter machine. Thing is, the huge reason why I and probably a lot of people bought a PS3 was because it was a cheap Blu-ray player compared to everything else at the time.

 

[dobwal]

Has Sony licensed the APU to manufacture it itself, or is AMD making it for Sony?

APU is sold to Sony through AMD. AMD can't provide licenses to x86. Neither can Intel as its a part of the cross license agreement.

 

[djskribbles]

Somewhere around $299 is the magical price point, though I think a good chunk would buy it at $399. At $499, it's still an early adopter machine. Thing is, the huge reason why I and probably a lot of people bought a PS3 was because it was a cheap Blu-ray player compared to everything else at the time.

I agree that $299 is the 'sweet spot' in North America. But Sony (or MS) doesn't need to launch at that price... they just need to price it low enough to get the core gamers to bite, and that's 350-450 tops IMO. I hope Sony at least has a model priced at 399. Anything less is gravy.

 

[Rockster]

Jack Trenton hopes PS4 doesn't cost $599 at launch. http://allthingsd.com/20130221/seve...ck-tretton-following-the-playstation-4-event/

I'm guessing it will come out at $499, and the Xbox vNext will launch at $399; based on history, target markets, and BOM.

 

[owen]

I am guessing $699 deluxe, $500 standard bear bones (no sensor bar for controller, smaller harddrive, pay extra to connect it to the network ). There is no way they are going to get all that tech into a small form factor without losing money. Early adopters will buy it either way just to get it early and support sony.