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darkmistx did you actually read the report? As I said it looks like the BluRay drive it what is really going to push the manufacturing costs of the PS3 up. The question is will Sony pass on this additional cost to the consumer or absorb the loss. Most analsysts reckon it will be the latter and they will take the hit for three years. Personally I think it's the hardware division pushing the sofware division into including the BluRay drive to get the hardware division boyant again. Take the cost of the BluRay drive off the figures and you get something around the same cost to manufacture as the 360. That's not so hard to believe. |
Delay to PS3? • Page 2
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BartonFink 35,268 posts
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phAge 25,487 posts
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Registered 18 years agodarkmistx wrote:
Cool! So basically, car manufacturers are fucking us over with their prices, since cars are mostly aluminium (which, as we all know, comes from empty Coke cans), and should thus be dead cheap!?! The bastards.
It actually costs very little to produce the silicon chip (e.g. Cell, RSX etc). The way it works it costs a few $billion to set up the chip manufacturing plant, and you can produce of couple of million of chips at relatively little cost, silicon is very easy to obtain because it comes from sand (silicon dioxide). The most expensive part of the chip is actually the casing and metal pins.
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JamFDUK 262 posts
Seen 13 years ago
Registered 16 years agoThe more I hear about the PS3, the grimmer the outlook appears. Still, I'm not one to underestimate Sony. Perhaps they can still come out on top. Still, roll on the Revolution, I say. -
ssuellid 19,142 posts
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Registered 20 years agofrod wrote:
Cars are mostly aluminium?!
New Jag is, Elise is.
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phAge 25,487 posts
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BartonFink 35,268 posts
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Registered 20 years agoAnd they have to recoup the cost of that research in some way hence the hight initial cost in year one and two. You think IBM are doing this for free or something?
Cars have thousands of components, however an IC along the lines of the PS3 CPU is a lot more complex and will require testing to ensure that everything works and this takes time and time=money.
Also I am not sure that the cost of the CPU is really overly adding that much to the overall cost of the console. That is happening elsewhere.
Edited by BartonFink at 13:20:13 19-02-2006 -
jozz 4,871 posts
Seen 4 years ago
Registered 16 years agoThis seems relevant and sums up the tricky position Sony may find themselves in with the PS3 (Also shamelessly pinched off of Joystiq's front page):
The North American launch of the Playstation 3 could slip to 2007 if the Merrill Lynch report we blogged about earlier is to be believed. The report states that as a result of Sony's design choices the PS3 is an "expensive and difficult to manufacture product" which could have the consequence of delaying the launch until next year. The components that seem to be causing the most trouble are the Cell processor and the Blu-Ray drive.
The Cell processor is a very complex chip which means it'll be a difficult and expensive part to manufacture. Processors are often a reason for delays in the computer industry (3GHz G5 PowerMac anyone?) so it's possible the Cell could be a factor in any potential slippages for the PS3. The second problem is Blu-Ray. The standard is so new that no-one is making the drives, resulting in another expensive component. The inference is that Sony might delay the PS3 until Blu-Ray is a more established format in order to reduce their losses.
What we've got here is a waiting game. The longer Sony waits to launch the PS3, the less money it'll lose on its consoles. However, as long as the PS3 remains off the market Sony runs the risk of losing out to its competitors. -
Khanivor 44,800 posts
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Registered 20 years agoCars have thousands of components. Each SME has millions, as does the GFX chip.
Merril Lynch may not be 100% correct but to dismiss one of the biggest financial instituions in the world (worth $10 billion more then Sony with 3 times the proft last year) is naive fanboisim of the worst kind. -
BartonFink 35,268 posts
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Registered 20 years agoDenial perhaps? -
Khanivor 44,800 posts
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Registered 20 years agoHar, most definetly. I am amused when people dismiss reports like this out of hand, like they actualy have a better clue then professionals who earn their compnay billions every year for correctly analysing markets. Sure, they aren't always wrong - hence the term analyst rather then time-traveller - but methinks they mayhave a slight clue on what they are banging on about.
Of course, the people who this report was commisioned for might not give a damn about its veracity. I mean, the future of their own companies might only depend on what is contained within. -
BartonFink 35,268 posts
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Registered 20 years agoAmazing how a simple typo can make someone dismiss the entire report. Sorry but you seem like a fairly sane person but you need to start looking at this realistically. This is going to be one expensive beast for Sony in it's first three years they have to pay for the R&D and manufacture somehow, that costs money.
Edited by BartonFink at 14:16:25 19-02-2006 -
IMO 7,883 posts
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Registered 17 years agoBartonFink wrote:
It's because they are looking for reasons to dismiss it...
Amazing how a simple typo can make someone dismiss the entire report.
Edited by IMO at 14:17:46 19-02-2006 -
BartonFink 35,268 posts
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Registered 20 years agoBringing us right back to denial. -
quedex 3,135 posts
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Registered 17 years agodisc wrote:
Which they always remedy by finally releasing it in Europe at twice the US price
Every single console that Sony has released has cost them money the first 2 years..gif)
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BartonFink 35,268 posts
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Registered 20 years ago/shudders at the thought of the price in Europe -
phAge 25,487 posts
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Registered 18 years agoI hereby denounce the theory of relativity - the moron couldn't even do simple maths FFS! -
BartonFink 35,268 posts
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Registered 20 years agoBut why are they so hard to believe? (feel like we are going around in circles)
I don't think they have the exact figures only IBM and Sony will know that for sure but could a company like Merrill Lynch to be that far off.
Edited by BartonFink at 14:36:24 19-02-2006 -
IMO 7,883 posts
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Registered 17 years agodarkmistx wrote:
It's not denial, I just don't tend to instantly believe everything I read on the internet. Sure, it's going to be an expensive console to manufacture but it's because I am looking at it realistically that I find some of figures they've quoted hard to believe.
Have you actually read the source PDF. Where it talks about initial costs and how much it will be in 3 yrs. It seems as if ML have factored in the reduction in component costs, I'll agree, it does seem somewhat inflated in the light of other console manufacture costs, but it's not unbelievable. -
Fubdub 270 posts
Seen 10 years ago
Registered 16 years agodisc wrote:
Every single console that Sony has released has cost them money the first 2 years.
Unless you have something to back that up with, I'm gonna take a chance and call that utter bullshit.
As far as I know, only 3 consoles (I don't know the economy behind the 360, it might be losing money), has been sold at a cost to the maker, 2 by Sega, and one by Microsoft. Sony, like Nintendo have always made profit on hardware sales.
This is because they, unlike MS is a hardware manufacture, and can therefor make all component inhouse.
As for the the cost of Bluray, I don't know, but consider this:
Samsung is gonna release at player this spring costing $1000. Have a look at it here. Now Samsung have to pay a royalties to the Bluray foundation (or whatever it's called), Sony doesn't. Samsung needs all the hardware of a high quality player of a new generation, which doesn't come cheap, Sony doesn't, they already have all they need within the PS3. Samsung needs to recurp their development costs which will be much higher for new device such as a Bluray player, at the same time initial consumer potential is probably limited, so therefor they need a large profit margin, I'd say as much as 50-60% if they don't want to end up losing money, Sony of course has a guarenteed large install base.
Considering all these factors I seriously doubt that a simple Bluray drive, even though based on new technology, will cost $350, a price around $100-150, and rapidly dropping over the hardware lifespan is in my opinion much more realistic.
I don't know how much Cell will cost, but again, something massmanufactured on this scale will rapidly drop in price. And since they have shared research cost with IBM, they probably don't pay as much in royalties to IBM as MS do, though they actual manufacture price of the Cell is probably higher than the chip in XB360. -
BartonFink 35,268 posts
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Registered 20 years agoIMO wrote:
darkmistx wrote:
It's not denial, I just don't tend to instantly believe everything I read on the internet. Sure, it's going to be an expensive console to manufacture but it's because I am looking at it realistically that I find some of figures they've quoted hard to believe.
Have you actually read the source PDF. Where it talks about initial costs and how much it will be in 3 yrs. It seems as if ML have factored in the reduction in component costs, I'll agree, it does seem somewhat inflated in the light of other console manufacture costs, but it's not unbelievable.
Agreed the cost of the CPU does seem inflated but could that be caused by Sony et. al. factoring in the cost of R&D into the final CPU. It is really new technology (unlike the 360 CPU what's that $150-170 or something). However I will go back to the cost of the BluRay drive again that's really what seems to be driving up the overall cost not the CPU.
Edited by BartonFink at 14:46:34 19-02-2006 -
BartonFink 35,268 posts
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Registered 20 years agoFubdub wrote:
I think the word you are looking for in there is 'eventually' when you are talking about Sony and hardware.
disc wrote:
Every single console that Sony has released has cost them money the first 2 years.
Unless you have something to back that up with, I'm gonna take a chance and call that utter bullshit.
As far as I know, only 3 consoles (I don't know the economy behind the 360, it might be losing money), has been sold at a cost to the maker, 2 by Sega, and one by Microsoft. Sony, like Nintendo have always made profit on hardware sales.
/wonders if we are living on the same planet. -
urban 13,148 posts
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Registered 17 years agoi really wish people would stop talking about this so called delay, its all myths thrown out there to thrown down sony stock prices, it doesnt matter, when it comes out it WILL be the best next gen console.
so. really thats all that matters. -
Fubdub 270 posts
Seen 10 years ago
Registered 16 years agoYou need to read this: http://www.actsofgord.com/Proclamations/chapter02.html
While it's speculations, it's based on some pretty convincing evidence. Sony spends a truckload of money on research, but then earn it back through hardware sales and royalties.
Unless I see some convincing evidence to the contrary I'll stand by my point that Sony is making money on hardware from the very beginning.
Edited by Fubdub at 15:04:07 19-02-2006 -
Based on previous experience, these reports are often innacurate, as they are based on incomplete calculations. For example, a truly accurate calculation must take into account the vaue of winning the HD-DVD war, and promoting the CELL processor so as to be used in other devices...
I've seen a lot of these reports be totally wrong because if you don't have the insider information, you are only making a prediction based on the best evidence available at the time.
So in short, I suspect that this is the best prediction that could have been made at the time, but is nonetheless educated guess-work, and as such if it's wrong, it could be completely wrong.
(I'm a Nintendo man myself, so I don't really care all that much, but I do think that the cost figures doing the rounds are waaay too high for a viable business-model. Ergo, I think it's boole-sheet). -
jozz 4,871 posts
Seen 4 years ago
Registered 16 years agourban wrote:
Conspiracy theory backed up by opinion?
i really wish people would stop talking about this so called delay, its all myths thrown out there to thrown down sony stock prices, it doesnt matter, when it comes out it WILL be the best next gen console.
so. really thats all that matters.
I love it
Edited by jozz at 15:04:30 19-02-2006 -
morriss 71,293 posts
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Registered 17 years agourban wrote:
i really wish people would stop talking about this so called delay, its all myths thrown out there to thrown down sony stock prices, it doesnt matter, when it comes out it WILL be the best next gen console.
so. really thats all that matters.
rofl -
Khanivor 44,800 posts
Seen 2 days ago
Registered 20 years agoSorry, I lol at those who say the PS3’s Blu-Ray drive will be cheap cuz all the processing is done by the Cell chip. Er, so, standalone players have to have special chips to do this task, the PS3 can do it all already because it’s a multifunction device as well as a games console!
Does this not kinda make ya think the PS3, with all the stuff it includes that a BR player won’t (RSX, interface ports, brand-new Cell CPU, etc) that the PS3 could be more expensive then a stand-alone BR player?
Put it this way: what’s cheaper, a plain mobile phone from Argos or a PDA from HP?
Fubdub wrote:
As for the the cost of Bluray, I don't know, but consider this:
Samsung is gonna release at player this spring costing $1000. Have a look at it here. Now Samsung have to pay a royalties to the Bluray foundation (or whatever it's called), Sony doesn't. Samsung needs all the hardware of a high quality player of a new generation, which doesn't come cheap, Sony doesn't, they already have all they need within the PS3. Samsung needs to recurp their development costs which will be much higher for new device such as a Bluray player, at the same time initial consumer potential is probably limited, so therefor they need a large profit margin, I'd say as much as 50-60% if they don't want to end up losing money, Sony of course has a guarenteed large install base.
Unless the royalties for BR are around 600 bucks the cost is an irrelevance. Samsung’s development costs for BR? WTF are they exactly, seeing as, er, the BR consortium developed BR and not Samsung, hance the royalty payments? Maybe you mean the HDMI interface at, oh no wait, develped by someone else too. While there will no doubt be some costs involved in development for Samsung and others initialy offering BR players to the mugs, I mean early adopters, I'd wager a huge chunk of that massive price tag will be what is commonly termed 'pure profit'. Gotta make cash of the dumbells before prices are slashed and margins become miniscule.
Edited by Khanivor at 15:41:17 19-02-2006 -
Ginger 7,256 posts
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Registered 19 years agoTelepathic.Geometry wrote:
Precisely.
So in short, I suspect that this is the best prediction that could have been made at the time, but is nonetheless educated guess-work, and as such if it's wrong, it could be completely wrong.
No-one except those inside sony, IBM and partners know the real costs, but companies like ML have to make predictions like these, and so while they may look as though they've pulled them out of their arse, they're probably in a better position than most of us to make guesstimates. -
NBZ 2,425 posts
Seen 3 months ago
Registered 18 years agoWhen the PS2 launched, were the 'experts' not saying that it cost £600 to make?
I call it marketing.
Say it costs $800 to make. Sell it for $300-$400. tell the customer they areg etting a bargain as Sony are paying for half of it!
Its 'reassuringly' expensive. -
Oh jaysus now we have Stella Artois coming into it. I wonder will the PS3 leave a bad taste in the mouths of the Sony execs?
.gif)
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