Carl, well.. Obviously I'm asking these questions because I'm concerned about the emphasis that's placed on future BR revenue (and profits) in order to offset PS3 losses when it seems to me that Cell isn't being considered.
The question was posed because I was curious as to whether or not Cell development cost was spread across multiple divisions and BR development wasn't.
If I interpret your response correctly, both investments were spread across multiple divisions, so once again I don't understand why BR is singularly targeted as the sole revenue stream that should some how have future gains that offset the $4B (I'll use that number as well) loss.
The reason BD is being targeted here in terms of its future potential revenues is because BD is the only
major component for the PS3 that was truly optional from the outset. WiFi, hard drive, Bluetooth, B/C, card reader... that was all optional as well of course. But when we discuss the forward costs of BD inclusion in relation to the alternative, the difference was stark in absolute terms.
Cell vs another CPU - you still need a CPU, and the expense differential ultimately isn't going to be that great. RSX vs another GPU, again you need a GPU of some sort, and what realistically
could the level of savings be? BD vs a DVD drive in the year 2006... that's a big difference though. And Sony went ahead with what was an at-that-time immature ecosystem explicitly for the possibility of future pay-off via BD income streams.
If that wasn't clear enough, I'll give you a "For Example".
The PS3 included BR but used the IBM chip instead of Cell.
The PS3 included BR but used an Intel chip instead of Cell.
The PS3 included BR but forced Cell to also act as the GPU as was originally intended instead of licensing tech from nVidia.
Well I want to clarify that the Cell was never going to be doing graphics for the PS3, even though the original patent does describe such a setup. The first GPU iteration was going to be a GS successor by Toshiba, but that chip got too crazy, which is why NVidia entered the picture (programmability).
My point being that the inclusion of BR isn't the primary expenditure that lead to this loss.
I hear what you're saying, but when Sony decided to go ahead with BD inclusion, that was a conscious decision to eat a greater loss for the sake of an external effort. In my mind that's what separates it from the other stuff, the idea that the rest was premised on core cost/benefit analysis focused on the PS3 as a console, and thus I view the losses incurred from such as in the realm of 'the norm,' whereas the BD inclusion was an extraordinary cost incurred with heavy additional losses assured simply for the reason of pushing the format.
Sony could have launched a PS3 that would have been significantly cheaper to produce (and sell at a lower price point), even with the inclusion of BR had they not made other design choices.
I agree with you here, but I think that the majority of those cost-saving decisions would have centered on the peripheral features such as hard drive and backwards compatibility. Cell was expensive, but again it's really an investment that is presently on the books as an asset rather than a loss (and thus not included in the $B losses), and RSX is pretty straightforward to me; I can't envision a solution that would have been much cheaper.
Hard drive I think was the right move for any number of reasons, and backwards compatibility, well... I enjoy mine, I have to say. Doesn't mean it was smart, but they were trying to codify a feature-set at the time whereby they wanted PS games to be a 'standard' unto themselves.
So I don't think this discussion is fair in that BR needs to recover all the costs of the PS3 because BR itself was only part of the reason why the PS3 was as expensive to manufacture.
No I don't think BD
needs to recover all the costs... I certainly agree it's not responsible for all of them... I guess it's simply more a matter of if it *does* recover all the costs, then at least there's that - a sort of silver lining to what otherwise was a botched effort from the corporate standpoint.
I'd also like to say that I think Sony made a number of design and decision and marketing awareness choices that were bad at so many levels that I'm not trying to cover up their mistakes.
Oh no doubt, horrible, horrible decisions. The launch period was a total mess. Even with the expense of the console, it didn't have to be this bad. Management really dropped the ball.
I just don't think that the inclusion of BR was "The Fundamental Flaw" in the PS3, or that it's inclusion is what is primarily responsible for the $4B loss.
I think Sony could have launched a console at the same time they currently launched, at a much lower price point for a much reduce cost, had they made other design choices.
I absolutely agree with you, and I want to be clear that I'm not even calling it a flaw at all. I just think though that it is the primary 'gamble' aspect of the console, and it will take time to tell whether the gamble will have paid off or not.
