Good Lord $800! Krazy Ken was out of control XDThe losses on the PS3 were attributable to three things:
At the end of the day, largely attributable to the items above, the PS3 was rumored to have a BOM of $840 for the original $599 "full fat" PS3, and approximately $805 on the $499 version, meaning it lost $240 and $306 on each unit sold, respectively.
- Cell Processor. This was back when consoles regularly featured custom silicon, instead of the more off-the-shelf x86 parts from today. The Cell processor was co-developed with IBM, and was aggressively designed to enable a generational leap in processing. Some think its still more powerful than current Intel CPUs: https://www.tweaktown.com/news/6916...ll-cpu-far-stronger-new-intel-cpus/index.html. At any rate, Cell was very expensive to design, and low yields made it very expensive to manufacture: https://www.theguardian.com/technology/blog/2006/jul/15/could1020yie
- PS2 Backwards Compatibility. The PS2 was (and is) the best-selling home console of all time, and Sony was eager to ensure that everyone who owned a PS2 would migrate to the PS3. Part of that plan was to ensure that the PS3 could play PS2 games. I believe that initially the idea was that the Cell processor would be so powerful that it would be able to run PS2 titles through emulation. But when that fell through, Sony declined to drop the backwards compatibility feature. Instead they simply added an entire PS2 chipset inside the PS3: https://www.engadget.com/2006/06/05/reason-437-for-all-that-bulk-ps3-has-a-ps2-inside/
- Blu-Ray. At the time of the PS3 launch, the format wars between HD-DVD (from Toshiba) and Blu-Ray (from Sony) were in full swing. Owning the license for DVD technology had been ridiculously profitable for Sony, as consumers the world over bought billions and billions of DVDs as they replaced their VHS collections with DVD versions. (Sony got something like 7.5 cents per DVD and $4 for every player sold.) And the PS2 and DVD had had a symbiotic relationship: One of the reasons that the PS2 sold so ridiculously well was that it was the cheapest DVD player you could buy in the late 90's. And because the PS2's gaming platform allowed them to subsidize the hardware cost, having all of these PS2-as-cheap-DVD-players out on the market spurred the adoption of DVD technology by the market. So Sony was extremely eager to replicate this dynamic with the PS3 and Blu-Ray. Of course, Blu-Ray technology was new and very expensive at the time, and using the PS3 as a trojan horse for help Sony/Blu-Ray win the format war added additional cost to the console.
Point being, Sony didn't take losses on the PS3 because they were being aggressive with pricing. They took losses because the console's cost was horrendously out of control, and it would have been suicidal to price the consoles for anything more than they did, what with the 360 and the 360 Core consoles cost $399 and $299 at launch.
When were they considered toys? Your posts make no sense. Adjusted for inflation the NES was 430 dollars.
When were they considered toys? What a crazy question. Always. Forget about "adjusted for inflation". First, it's nonsense; not everything "inflates" at the same rate. I bought the NES at 15 with a weekend-only job that paid shit. It wasn't unaffordable at all.
Second, an expensive toy is still a toy. The 2600 and NES are what kids, including myself, wanted (and got) for Christmas in their time. The PS4 and Switch are what kids want now. And the PS5 and Xbox SX are what they'll ask for for Christmas this year. They're toys. Games are toys. As adults, we might like to call them by fancier names, but they're still toys.
Personally they stopped being toys the moment they were capable of playing your favorite porn DVD.
What a bizarre comment. Toys aren't just for kids, you know.
PlayStations are absolutely pure leisure products. It's right in the name. They're playthings.
It's funny because people with ATVs, motorbikes, and jet-skis — other leisure products for adults, all of which are much more expensive than a PlayStation — refer to those as their "toys" all the time. But on Era people are all "my playstation is NOT a toy!! you can watch porn on it!!1"
This seems to line up with my thoughts anyways that Sony has always prepared for a 399 launch with a similar setup to this generation and Microsoft is going to go beyond that with a 499 console and whatever top flight tech that can be put in those boxes at those price points. If any of this is true, both might be in a precarious spot but since Sony is highlighted here and 399 seems to be their sweet spot, I wonder how all of this is going to play out.
Interesting stuff.Some of the smaller details in the article don't make sense to me, although I can agree with the overall conclusions. I sort of said the same thing after their earnings call based on the comments from the CFO - things appear to be trending more expensive and $399 isn't a slam dunk. They would like to wait until Xbox announces price to make the call. I agree with this sentiment.
The actual dollars don't make sense to me because a $450 launch BOM wouldn't be a super hard pill to swallow to launch at $399 assuming they have line-of-sight for that to come down. I think it would need to be much higher for them to waiver like this.
Second, I don't recall cooling solutions being that cheap - even single components within the system. Still it seems hard to believe that cooling (even an exotic solution) would be something that drives up the price. I also don't believe they couldn't design around this issue. It's all memory, silicon yields, storage and spinning media. Those are the big areas. So a significant increase in memory pricing absolutely could be a driver.
My guess is that costs have gone up enough to put them in a weird spot. Depending on what you want to believe about performance - but if they are actually in a 9-10 vs. 12 situation, being at the same price isn't super fun. And if costs have gone up more than they expect, it could be very hard to get to a $100 delta.
That's my take anyway. I don't think it's a revelatory article, more just adding some texture to things that seem to be known.
Some of the smaller details in the article don't make sense to me, although I can agree with the overall conclusions. I sort of said the same thing after their earnings call based on the comments from the CFO - things appear to be trending more expensive and $399 isn't a slam dunk. They would like to wait until Xbox announces price to make the call. I agree with this sentiment.
The actual dollars don't make sense to me because a $450 launch BOM wouldn't be a super hard pill to swallow to launch at $399 assuming they have line-of-sight for that to come down. I think it would need to be much higher for them to waiver like this.
Second, I don't recall cooling solutions being that cheap - even single components within the system. Still it seems hard to believe that cooling (even an exotic solution) would be something that drives up the price. I also don't believe they couldn't design around this issue. It's all memory, silicon yields, storage and spinning media. Those are the big areas. So a significant increase in memory pricing absolutely could be a driver.
My guess is that costs have gone up enough to put them in a weird spot. Depending on what you want to believe about performance - but if they are actually in a 9-10 vs. 12 situation, being at the same price isn't super fun. And if costs have gone up more than they expect, it could be very hard to get to a $100 delta.
That's my take anyway. I don't think it's a revelatory article, more just adding some texture to things that seem to be known.
Pretty sure he meant high end this year, for the same low price of 399.
I noticed that too. We most definitely the did not get a high end console for $399 this generation. The CPU was a complete turd from the start and GPU was mid-low tier. The rumored specs for these consoles are MUCH better. Well worth the price increase if it happens.
Lol the PS2 wasn´t even released in the late 90s let alone the cheapest DVD player. You could get a cheap DVD player for 50 in 2002, maybe twice that in late 2000 when the PS2 hit the western markets.One of the reasons that the PS2 sold so ridiculously well was that it was the cheapest DVD player you could buy in the late 90's.
I can tell you for a fact that media space is typically bought in bulk at the beginning of the year (for most brands that plan a launch of something). This isn't going to affect anything
When were they considered toys? What a crazy question. Always. Forget about "adjusted for inflation". First, it's nonsense; not everything "inflates" at the same rate. I bought the NES at 15 with a weekend-only job that paid shit. It wasn't unaffordable at all.
Second, an expensive toy is still a toy. The 2600 and NES are what kids, including myself, wanted (and got) for Christmas in their time. The PS4 and Switch are what kids want now. And the PS5 and Xbox SX are what they'll ask for for Christmas this year. They're toys. Games are toys. As adults, we might like to call them by fancier names, but they're still toys.
Lol the PS2 wasn´t even released in the late 90s let alone the cheapest DVD player. You could get a cheap DVD player for 50 in 2002, maybe twice that in late 2000 when the PS2 hit the western markets.
Lol the PS2 wasn´t even released in the late 90s let alone the cheapest DVD player. You could get a cheap DVD player for 50 in 2002, maybe twice that in late 2000 when the PS2 hit the western markets.
That and Nintendo themselves regards gaming as a 'toy'. Nintendo is also a toy company that made stuff like Ultra Hand.
In Japan, it was definitely sold as a cheap DVD player. I mean, the most played thing on a Playstation 2 in Japan in its early years was Spiderman 2.
You could find DVD players in late 2000-early 2001 for $100. They weren't the greatest but we're talking about the cheapest.
Don't know about the japanese prices but the PS2 launched for over 400€ in Europe. A standard DVD player was nowhere near that price.In Japan, it was definitely sold as a cheap DVD player. I mean, the most played thing on a Playstation 2 in Japan in its early years was Spiderman 2.
Are we talking about the US or Japan? Because in Japan, DVD players were noticeably more expensive. Heck, DVDs themselves are still more expensive in Japan to the point that movies or popular anime on DVD don't really sell.
this has to be an intentional leak — smoke signaling to Microsoft that they're willing to go $499 if they are
I can only speak from personal experience in the USA but I find it hard to believe that we had $100 DVD players and the cost in Japan was higher than the price of a PS2. But, again, I wasn't there so you may be correct.
It was a long time ago, so I may have details wrong. I do remember the PS2 being considered a cheap DVD player in at least Japan during its early years, but could be cheap for the quality of the player. I believed that PS2 had a very good player for its price tag.
Yep singling the Sony crowd to save up another $100. Extra overtime, weekend working whatever it takes.
$499 for PS5 and X make a Lockhart at $299 a mass market darling
That's the question.wait why i'm seeing 100$ difference now
it won't happen if the they are close to each other (+12Tf)
Because he doesn't know if they suffer from the same problem or not? or he can't say anything about these coz of NDA.That's the question.
Albert's analysis fails to mention that Microsoft will suffer similar headaches with pricing.
Both consoles will increase price by a similar margin if the component shortage is the SSD / DRAM.
Depends on how early those resources were signed and contracted for. If Microsoft knew what their needs were last year and bought in volume at X price then a shortage won't hurt them as bad. It's unlikely but possible given that for memory Apple had previously bought chips years in advance for mobile devices.LOL - do you understand that a shortage effects everyone? Lockhart's main differentiation wasn't the SSD but a cut down GPU.
A 499 PS5 means-
599 Series X (if they were targeting 499)
399 Lockhart (if they were targeting 299)
The victory laps being run because Sony has to increase price misses the point that Microsoft will also suffer the same sensitivities. There are no winners here unless you own stock in micron.
As someone with zero interest in these consoles (I play on PC exclusively) I still find the whole process leading up to a console launch rather fascinating. There are not many other hardware markets where if you fumble a device's launch you're essentially screwed for seven or so years. Every other sector releases products at such a rapid pace that one year's disaster can turn into another year's triumph, yet in the console market you either get it completely right or you're straight up boned and have to wait many years for another chance.
As for the price point debate, I think that $499 is too much for what is essentially a single-purpose device for gaming. Yes, you can do other stuff on it but the rise of smart devices (especially smartphones) means that people already own multiple devices that can do all the extra stuff that a console does.
I don't prescribe to this idea that Microsoft and / or Sony pulled a fast one whilst the competitor trip and fell on egg shells that increased price / lowered performance. That's nonsense.Depends on how early those resources were signed and contracted for. If Microsoft knew what their needs were last year and bought in volume at X price then a shortage won't hurt them as bad. It's unlikely but possible given that for memory Apple had previously bought chips years in advance for mobile devices.
LOL - do you understand that a shortage effects everyone? Lockhart's main differentiation wasn't the SSD but a cut down GPU.
A 499 PS5 means-
599 Series X (if they were targeting 499)
399 Lockhart (if they were targeting 299)
The victory laps being run because Sony has to increase price misses the point that Microsoft will also suffer the same sensitivities. There are no winners here unless you own stock in micron.
Surprisingly, there is no mention of Microsoft and its Xbox Series X console in this reporting. Microsoft's console also uses many high-end components, and its price is not expected to be as low as the One X or One S, which remain as options for consumers. Indeed, one report says that Series X's SSD may actually be DRAM-less – a first in this market – which could help Microsoft skirt this supply issue, at least partially. The solution for Microsoft, which is unconfirmed, is the reliance on Phison's newer PS5019-E19T flash memory controller.
Game systems can turn it around after a lackluster launch like the DS, 3DS, and even the Xbox 360 with the whole Red Ring of Death. Even the PS3 managed to turn around somewhat during its final years. It's just extremely hard since the gaming market tend to latch on to one system as the dominated, while every else get scraps. This time period is one of the few exceptions with the Switch and the PS4 both doing extremely well and breaking records. The only thing close was the SNES and Genesis in the US.
I think that Nintendo's portables and the 360 were allowed a mulligan mainly because of the lack of competition.
The DS was up against the PSP, which had a very good launch and was even ahead of the DS in the US. Then the DS Lite happened. That and the 360 was against the Wii who washed it outside of the US.
Services are a much larger part of the profit than 7 years ago, especially for Playstation. I think it's still possible we see a $399 PS5 so they can transition users from PS4 to PS5 as quickly as possible. I think they would be willing to take a loss like that since they'll end up making a larger profit from online subs and the like, especially if they bundle PS+ and Now together.
wait why i'm seeing 100$ difference now
it won't happen if the they are close to each other (+12Tf)
but everyone who might know or heard something said it is. and even some said it slightly stronger
Let it go...but everyone who might know or heard something said it is. and even some said it slightly stronger