Meryl Lynch estimates the cost of the PS3 at $800-900

[OutOfGum]

From Engadget:
http://www.engadget.com/2006/02/18/playstation-3-costs-900-sez-merrill-lynch-mob/

Here is a direct link to the ML article:
http://rsch1.ml.com/9093/24013/ds/276873_0.PDF

Yes, this is just an estimate, but you'd think that ML has some information that would be hard for the average joe to find.

[MasterShredder]

ouch.. there's gonna be a lotta pissed off people if that thing's even $600 MSRP

[Terpfen]

but you'd think that ML has some information that would be hard for the average joe to find.

Not really. The difference beween the average joe and an investment broker is that the broker can read a balance sheet.

Everyone already knows what I think of brokerage speculation, so I won't repeat myself.

[johnnq]

if you believe this you're a moron.

[Converge]

if you believe this you're a moron.

^^^

[Firewall]

Ouch, the phan-boys are getting mean already lol.

I was just about to start a thread cause I just saw this, but someone beat me to it.


Is this really any suprise to any of you? Seriously, we haven't heard much from Sony, and we have heard a lot of speculation as to problems they are having.

Could they be in some shit? Maybe. Could they just be finishing it up, and thus putting on a marketing ploy? Maybe.

A sony exec already said it was going to be expensive. I don't see why everyone has to post drivel about how "it won't be that expensive".

We must have a lot of Sony insiders here :D

[heatsinker]

You talk an awful lot yourself considering lack of evidence other than "it will be expensive". You know my parents think a $180 for a timing belt job is expensive.

[Firewall]

Maybe you should read the report. It breaks down the cost of each peice of the ps3.

Even if they are wrong, we all now these new, cutting edge parts are going to be expensive. Execs said it will be expensive. Reports have said it'll be expensive.

Why can't some of you get that through your heads? It is going to be expensive....end of story.

[Naldo]

All I know is when the PSP was about to launch pretty much every analyst out there was predicting it would cost $300-350, then when it came out it was only ~$185, so I definatly take this with a grain of salt.

[Firewall]

All I know is when the PSP was about to launch pretty much everyone was predicting it would cost $300-350, then when it came out it was only ~$185, so I definatly take this with a grain of salt.


Where? I though it was around $230 - $250. Where do you shop?

Anywho, having read the pdf file, the analysis seems quite reasonable, and well considered, and utltimately quite persuasive. Whether it persuades you is a different matter, but before you dismiss the report out of hand, remember that the authors spend a lot of time trying to understand and predict what Sony is going to do, and therefore are better qualified than most third parties to reach conlcusions about slippages and prices.

[Naldo]

Where? I though it was around $230 - $250. Where do you shop?


In japan it launched at ~$185. We got stuck with the value pack, that added to the cost.

[Firewall]

In japan it launched at ~$185.


LOL, most of us here won't be buying one from Japan.

A quick google search shows us that the 360 costs roughly $750 to produce. They sell it for $400.

I don't think that with the cell, and blue-ray, $900 to produce a ps3 is a stretch.

I'll say they go on sale for $550-$600, and Sony only produces 2-3 million in the first year. Then, in years 2 and 3, when the cost to make one drops, they start producing them left,right, and center.

This means that you should all pre-order as many as you can, cause they will be selling on ebay for way over 1g.

[Nomikal]

Hmmm, they buy in bulk....so price is considerably lower for each component. Not sure if ML is considering this.

[Firewall]

Hmmm, they buy in bulk....so price is considerably lower for each component. Not sure if ML is considering this.


Read the article, they did. It's ML, not Joe's ABC research company.

[OutOfGum]

Hmmm, they buy in bulk....so price is considerably lower for each component. Not sure if ML is considering this.
At 350 for a BR drive, I'm sure they are.

[jtsnewo4]

Read the article, they did. It's ML, not Joe's ABC research company.


This just made my day.

Joe's ABC research??? ROFL. Classic.

[Naldo]

A quick google search shows us that the 360 costs roughly $750 to produce. They sell it for $400.

I don't think that with the cell, and blue-ray, $900 to produce a ps3 is a stretch.

I'll say they go on sale for $550-$600, and Sony only produces 2-3 million in the first year.

Wait... If the 360 cost $750 to produce, and it sells for $400, why would the PS3 sell for $150-200 more if it only cost $50 more to make than the 360?

[Gnu314]

I like how the article claims a $900 initial cost but its column only adds up to 800. Thats only 50 more than the 360, but I'ed guess the figure is probably off (and likely low).

Either way I don't see it launching for more than $450, any price point higher than that would be virtual suicide.

[pain.angel]

first off let it be known that i dont give a flying crap about any console launch...
now, it is well known that console producers eat a sizeable about of the production cost of the console itself and even if it does cost as much as a budget pc they will price it in order to compete with other consoles

[Converge]

Ouch, the phan-boys are getting mean already lol.

I was just about to start a thread cause I just saw this, but someone beat me to it.


Is this really any suprise to any of you? Seriously, we haven't heard much from Sony, and we have heard a lot of speculation as to problems they are having.

Could they be in some shit? Maybe. Could they just be finishing it up, and thus putting on a marketing ploy? Maybe.

A sony exec already said it was going to be expensive. I don't see why everyone has to post drivel about how "it won't be that expensive".

We must have a lot of Sony insiders here :D

It has nothing to do with someone being a "phan-boy" or not. If sony made their console $800+ it would pretty much be suicide. No one would buy it when they can get an xbox360 or revolution for much less. Im not getting any new console, nor do i want one but its pretty clear that $800+ is bullshit, unless of course sony has been taken over by acid dropping midget clowns.

[Tetrahedron]

unless of course sony has been taken over by acid dropping midget clowns.

this would actually be a good thing for SONY... lol, if it were true ;)

[Ominous Gamer]

It has nothing to do with someone being a "phan-boy" or not. If sony made their console $800+ it would pretty much be suicide. No one would buy it when they can get an xbox360 or revolution for much less. Im not getting any new console, nor do i want one but its pretty clear that $800+ is bullshit, unless of course sony has been taken over by acid dropping midget clowns.

Considering Blu-ray players are going to cost well over $600....Sony would be committing suicide to sell a console for less then what they are allowing distributors to sell their HD format players for.

Now that would hold true for any company. However this is Sony, as a simple price check can confirm, they overcharge for everything; from memory formats to laptops.:rolleyes:

http://www.hardfolding.com/ftag1.php/mem/172254.png (http://folding.extremeoverclocking.com/user_summary.php?s=&u=174409)

[Gnu314]

They pretty much did that with the PS2 and DVD, but that wasn't the point of that post anyway.

[Ominous Gamer]

They pretty much did that with the PS2 and DVD, but that wasn't the point of that post anyway.


DVDs were introduced in 1996, PS2 did not get released untill 2000.
By the time the PS2 was out, DVD players were already cheap (hovering around $200).


http://www.hardfolding.com/ftag1.php/mem/172254.png (http://folding.extremeoverclocking.com/user_summary.php?s=&u=174409)

[Tetrahedron]

DVDs were introduced in 1996, PS2 did not get released untill 2000.
By the time the PS2 was out, DVD players were already cheap.


http://www.hardfolding.com/ftag1.php/mem/172254.png (http://folding.extremeoverclocking.com/user_summary.php?s=&u=174409)

exactly, I already had a DVD player for a couple years before the PS2 came out.

[flapbreaker]

I didn't see where they factored in the cost of the ball shaver?

[Ominous Gamer]

exactly, I already had a DVD player for a couple years before the PS2 came out.


Yeah. Same here, these DVD players sure have shrunk...
Sony's problem is that they need their partners to make money on the format as well. If the only Blu-ray players selling are consoles that Sony is losing money on...
This means (in order):

1) Sony loses money on a PS3 system to a consumer who will not be expecting to be investing in PS3 games.
2) Sony pisses off partners by underselling them at a price they forced them to argee to.
3) Partners switch to HD-DVD, Sony ends up one of the few Blu-ray producers
4) HD-DVD wins.

Doesn't matter how you spin it, Sony screwed itself. You can bet the farm they are going to pass as much of that pain to the gamer as possible.

http://www.hardfolding.com/ftag1.php/mem/172254.png (http://folding.extremeoverclocking.com/user_summary.php?s=&u=174409)

[flapbreaker]

It does seem unfortunate that Sony seemed hell bent on including a blue ray player in their system considering it has nothing to do with gaming. I think this is a case where sony's main priority was to get a foothold on the HD dvd format wars and didn't give a rats ass about gamers in general. I fear that maybe Sony has lost focus this time.

[PikachuMan]

It has nothing to do with someone being a "phan-boy" or not. If sony made their console $800+ it would pretty much be suicide. No one would buy it when they can get an xbox360 or revolution for much less. Im not getting any new console, nor do i want one but its pretty clear that $800+ is bullshit, unless of course sony has been taken over by acid dropping midget clowns.

Indeed, people seem to lose common sense when they post about PS3's pricing.

[Ominous Gamer]

Indeed, people seem to lose common sense when they post about PS3's pricing.

indeed :rolleyes:

http://www.hardfolding.com/ftag1.php/mem/172254.png (http://folding.extremeoverclocking.com/user_summary.php?s=&u=174409)

[paranoia4422]

ahahahah roflmao, ahahaha i would laugh so hard at all my friends when they cant afford it and are *forced* to buy an xbox unless they want to stick to pc gameing

[LynxFX]

ML must be smoking some fine cheddar if they really think the BR drive costs $350 to manufacture. (excluding all R&D)

The PS3 won't debut past $500 for console alone (who knows what kind of bundles and packages and possibly two system sku's come up) and you can quote me on that. I'm pretty certain that my diet will be free of crow come fall. :p If not, well it is at least practice for Fear Factor.

[jcll2002]

the real question is, why is merril lynch even computing this in the first place?

[Erasmus354]

A quick google search shows us that the 360 costs roughly $750 to produce. They sell it for $400.


your powers over the internet are weak young grasshopper

"Including manufacturing, Microsoft's bill comes to about $552, according to iSuppli, which represents the cost to get the Xbox off the production line in the factory."

So it costs about 550$ to produce, 200 shy of what your powerful google skills have discerned :rolleyes:

If you include marketing costs it *might* get up to around 700$ per console some places speculate. But the 900$ PS3 cost does not include marketing, that is just the estimated 800$ BOM + manufacturing costs.

[Lamont]

unless of course sony has been taken over by acid dropping midget clowns.OMFG!! That would 'splain the midget cars, pony rides and why payroll insists on paying me in creame pies and seltzer-water.
http://www.digitalweaponx.net/FTP/midgetclowns.jpg

[Ominous Gamer]

the real question is, why is merril lynch even computing this in the first place?

This (http://finance.yahoo.com/q?s=SNE) is why.
Blu-ray is also going to cost a lot more to get out the gate then HD-DVD, since Blu-ray requires all new equipment for the completely new manufacturing process. Of course the short sighted will write this off as "R&D"; then again those are the people spending their nights on a computer forum, not the ones making triple digits for ML. A Blu-ray drive is commonly carring around rumors of $200-400 manufacturing price tags. Which would do more then explain the $1000 CES prices.

Google would do a lot of you wonders. ;)


http://www.hardfolding.com/ftag1.php/mem/172254.png (http://folding.extremeoverclocking.com/user_summary.php?s=&u=174409)

[Isaacav2]

It does seem unfortunate that Sony seemed hell bent on including a blue ray player in their system considering it has nothing to do with gaming. I think this is a case where sony's main priority was to get a foothold on the HD dvd format wars and didn't give a rats ass about gamers in general. I fear that maybe Sony has lost focus this time.

True........ehh. Glassa o happa .... ummm.... (puff..)(pufff..)

[Erasmus354]

It does seem unfortunate that Sony seemed hell bent on including a blue ray player in their system considering it has nothing to do with gaming. I think this is a case where sony's main priority was to get a foothold on the HD dvd format wars and didn't give a rats ass about gamers in general. I fear that maybe Sony has lost focus this time.

IMO Sony has lost focus on gaming / gamers ever since the PS2. They launched the PS2 on name alone, had a very difficult architecture and poor development tools. They basically told the developers "deal with it". And they did because the PS2 was dominant on name recognition alone. Unfortunately for Sony, Microsoft is not making it so easy for them this time around, and they are scrambling. They are putting noticeably more effort this time into middleware, and the announcement of their PSLive helps as well.

The question is, will it be too little too late? Hopefully the competition will make Sony realize they need to cater to the gamers if they want to win. In the end all Sony cares about is Bluray succeeding so they can reap the rewards that comes with winning the format wars. They could care less if the PS3 provides a good gaming experience.

[mastercheeze]

Considering Blu-ray players are going to cost well over $600....Sony would be committing suicide to sell a console for less then what they are allowing distributors to sell their HD format players for.



LOL, this is great. Looks like the [H] is turning into the Jr. Entreprenuer Forum, emphasis on the "Jr." Who is going to sell more of a specific UPC, Toshiba (or whoever) with their BR player, or Sony, with their PS3?

Whoever gets the correct answer first gets to smack Ominous.

[Ominous Gamer]

LOL, this is great. Looks like the [H] is turning into the Jr. Entreprenuer Forum, emphasis on the "Jr." Who is going to sell more of a specific UPC, Toshiba (or whoever) with their BR player, or Sony, with their PS3?

Whoever gets the correct answer first gets to smack Ominous.

There is difference between market volume share and market ownership.
Think about it. :rolleyes:


http://www.hardfolding.com/ftag1.php/mem/172254.png (http://folding.extremeoverclocking.com/user_summary.php?s=&u=174409)

[NulloModo]

IMO Sony has lost focus on gaming / gamers ever since the PS2. They launched the PS2 on name alone, had a very difficult architecture and poor development tools. They basically told the developers "deal with it". And they did because the PS2 was dominant on name recognition alone. Unfortunately for Sony, Microsoft is not making it so easy for them this time around, and they are scrambling. They are putting noticeably more effort this time into middleware, and the announcement of their PSLive helps as well.

The question is, will it be too little too late? Hopefully the competition will make Sony realize they need to cater to the gamers if they want to win. In the end all Sony cares about is Bluray succeeding so they can reap the rewards that comes with winning the format wars. They could care less if the PS3 provides a good gaming experience.

The EE on the PS2 was notoriously difficult to code for, but developers still flocked to it, because Sony had the market share. From all accounts so far the Cell is hard to code for, but easier than the EE, so developers will still be there, they go where the money is. And let's not forget that the Xenon in the 360 isn't easy as pie to code for either, it is a lot tougher than the P3 700 in the original Xbox. The only next-gen system coming out that is easy to code for is the Revolution, but Nintendo's dwindling sales and market share in the home console segment are sure to turn some devs away.

It isn't developers deciding which system is easier to code for, making games for that system, and therefore boosting its sales, it is consumers buying into marketing, buying the console that gets them with ads the most, and then developers coding first for what has the biggest market share. Currently the 360 is in the lead, simply because it is the only one out, but Sony has a huge fanbase already, and when the PS3 launches, it will sell out no matter what the price point. Yes, they will lose tons of cash on initial hardware sales, but consumers are getting a good deal here, even if they launch at $800 (which I highly doubt) that is still going to be $200 cheaper than the cheapest Blu-Ray DVD player.

[PikachuMan]

This is why.
Blu-ray is also going to cost a lot more to get out the gate then HD-DVD, since Blu-ray requires all new equipment for the completely new manufacturing process. Of course the short sighted will write this off as "R&D"; then again those are the people spending their nights on a computer forum, not the ones making triple digits for ML. A Blu-ray drive is commonly carring around rumors of $200-400 manufacturing price tags. Which would do more then explain the $1000 CES prices.

Google would do a lot of you wonders.


Meh, silly gamer. You shouldn't believe everything you read on the internet. Scepticism is a good thing, really.

[Techx]

for me, the ps3=yawn.. don't care what-so-ever.. i'm happily enjoying my 360

[NulloModo]

for me, the ps3=yawn.. don't care what-so-ever.. i'm happily enjoying my 360

I like my 360 too, it was worth it for DOA4 alone, but I will be the first in line at the local EB to get my PS3, the lack of any decent RPGs on the 360 makes it a must.

[junehhan]

From Engadget:
http://www.engadget.com/2006/02/18/playstation-3-costs-900-sez-merrill-lynch-mob/

Here is a direct link to the ML article:
http://rsch1.ml.com/9093/24013/ds/276873_0.PDF

Yes, this is just an estimate, but you'd think that ML has some information that would be hard for the average joe to find.


Those may be some well researched estimates, but they still havn't taken into account the "ouch" factor in pricing. This is the factor that determines how big of a loss a company is willing to take in order to make their product competitive. With Microsoft presenting such a big threat to Sony in all non-Japanese markets, i'm willing to bet Sony is willing to, and can afford to take a huge hit. I'd say that $500-600 is probably a much smarter price range for Sony. Also, you f!!!!!!s really need to chill. I'm a huge Microsoft fan, but that doesn't mean i'm not willing to consider all possibilities and be open minded. Quit speculating on a system that won't be out for a while, because we still don't know hardly anything about the PS3 anyway.

[junehhan]

I like my 360 too, it was worth it for DOA4 alone, but I will be the first in line at the local EB to get my PS3, the lack of any decent RPGs on the 360 makes it a must.


What about Oblivion? Also i'm pretty sure Fable 2 is likely in the works as well. I guess the PS3 will always have the Final Fantasy series, but I lost interest after FF7.

[Rich Tate]

What about Oblivion? Also i'm pretty sure Fable 2 is likely in the works as well. I guess the PS3 will always have the Final Fantasy series, but I lost interest after FF7.

You should really give X a run if you liked VII. I'm excited for XII and hopefully the complete killer that XIII will shape up to be. ;)

[NulloModo]

What about Oblivion? Also i'm pretty sure Fable 2 is likely in the works as well. I guess the PS3 will always have the Final Fantasy series, but I lost interest after FF7.

Not really excited about Oblivion, I hated Morrowind, I am not that into non-linear RPGs, I value story over freedom in a game. I haven't tried Fable yet, as I refused to buy an original Xbox, is it compatible with the 360? I might pick it up cheap if it is and try it out.

Also, FFVII was awesome, but I thought FFIX was far better than FFX. Tidus just pissed me off, and that underwater ball game sucked balls.

[OutOfGum]

Yes, Sony may sell its console at a loss, how much of a loss its willing to take is the question. They have roughly a $900 production price (yes the total adds up to $800, but you need to factor in the HDD, if there is one, and startup costs), and there is a limit to how low they can go. There is also a minimum that they must reach to have their consoles sold at all.

MSFT can much better afford to subsidize the cost of the 360: their market cap is, as of Friday, $234 BILLION DOLLARS higher than SNE's (~276B vs. ~46N). SNE just cannot handle a cut too large which brings me to this:
http://hardforum.com/showthread.php?t=1003761

A $400 per console loss will bankrupt Sony if they sell enough units, see the rub?

In addition to that, its well known that game companies make their money off of games, if the PS3 has the cheapest BR drive on the market its going to: A) piss off the rest of the BR backers that are selling players for more B) have mass purchasers who are not interested in gaming on the machine. If Sony is successful in marketing this to the masses AND they sell this machine at a large discount, they have really f*cked themselves. They will be taking huge losses with little to no future payout prospects. In addition, they cannot price BR movie discs higher to make money that way, because HD-DVD is out there. It doesn't matter if PS3 has 1080p vs. 1080i, price will win out, and SNE wants BR to win.

So what we have is SNE coming out with a very expensive system, that they are marketing to the general public, which they cannot afford the general public buying unless system price is high. However, if that price is too high no one will not buy, especially gamers which is where their income stream needs to come from in the future. OMG!

SNE really wants to subsidize the cost of the PS3 to GAMERS and not the person who wants to watch HD movies. The problem is, there is no way to differentiate one from the other. So, what can they do?

PS Where the hell are the obligatory eblislyge and Steviep posts?

[flapbreaker]

Don't forget it costs money for packaging and also to ship them to stores so the actual parts breakout is only part of the equation.

How much are stand alone blu-ray players suppose to cost?

[Nomikal]

Don't forget it costs money for packaging and also to ship them to stores so the actual parts breakout is only part of the equation.

How much are stand alone blu-ray players suppose to cost?

Plus, they want to make a profit.I don't buy this hype about MS selling the x-box for a lower price than it cost to produce...If they did then they're no longer a corporation or figured out a way to get the profit back elsewhere(via x-box live, video game sales by jacking up the price,etc...). That's a trait of corporations to basically shift cost elsewhere in favor of market share.

[PNut12345]

Plus, they want to make a profit.I don't buy this hype about MS selling the x-box for a lower price than it cost to produce...If they did then they're no longer a corporation or figured out a way to get the profit back elsewhere(via x-box live, video game sales by jacking up the price,etc...). That's a trait of corporations to basically shift cost elsewhere in favor of market share.


They do sell it for a loss; every console manufacturer does. The money is made from game sales and, like you said, xbox live subscriptions. But damn near all the money comes in from game sales.

[Luke_Skywalker]

I heard from a insider it might be 1200.

[Gnu314]

I heard from a insider it might be 1200.

Any time anyone says that they "heard it from an insider" on a message board they are lying. Sorry :(

[Dachink]

hopefully it's worth it http://hardforum.com/images/smilies/smile.gif

[UnlimitedMP]

Well my brother's wife who works at sony said they were going to sell them for 777$.

jk.

Hm. Even if it costs 800-900$ to make, I can't imagine them selling it for more then 500$. Sure it comes with bluray and its cell chip, but It doesn't even come with a hard drive. I'm sure most gamers would want one and so that adds to the cost the consumer pays.

Any more and then some hesitant customers may think to put all that money to a different use.. like a car payment, bills, or a computer which can do games and more. Gaming on a PS3 would be less casual and for more hardcore type people. Nintendo & MS's cheaper bundles will be more attractive to the common gamer (unless ps3 has some super game that blows away the competition)

[Erasmus354]

If by the time the PS3 comes out it still costs $800 to make one I see Sony being in a hard place. Sure they would want to launch at a price point of 500 or lower, but as was pointed out earlier they dont have near enough deep pockets to lose 400$ on every console. What I see them doing in this scenario is forcing outlandish bundles on people. We have seen this move from Sony already with the PSP Value Pack, and I only see it getting worse with the PS3.

The bundles will allow Sony to surreptitiously raise the percieved value of the product without adding much to their cost. Thus they could sell a bundle of a PS3 with 2 controllers, HDD and a game or two for 800$ and people would think "Hey great value!" We know that retailers will bundle, but Sony might be forced to bundle in order to not go flat out bankrupt.



A little food for thought: If the PS3 has a BOM of 800$, it is likely the final cost of the unit to Sony is around $1000 once labor, shipping, packaging, and marketing are factored in. If they were to sell the console at $500, and sell 1.5Million on launch day. That would be a one day net loss of $750 million dollars. Microsoft has lost a couple Billion on the Xbox in 3-4 years. Sony would lose that much in less than a year if they were to sell the console at $500, being that Sony is much smaller than Microsoft they can't afford that.

Either the console needs to be cheaper and Merryl Lynch just wants people to buy MS stock, the console needs to sell at a higher price, or Sony needs to find a way to pump more "value" into the system with bundles.

[Michael.R]

I dont believe that it costs $800-900 to produce for one second. But whatever ML want to believe I will let them believe.

And what is with the huge difference between quotes. Umm here its $494.

Link (http://www.gamespot.com/news/2005/06/28/news_6128295.html)

Do these people know what the hell they are talking about. Because I dont know what to believe now.

Ohh look its by ML to!

[NulloModo]

They do sell it for a loss; every console manufacturer does. The money is made from game sales and, like you said, xbox live subscriptions. But damn near all the money comes in from game sales.

Everyone but Nintendo but with details on the Rev launch being precious few and far between, and with the interesting commentary from VGCats, who knows.

[Ominous Gamer]

Don't forget it costs money for packaging and also to ship them to stores so the actual parts breakout is only part of the equation.

How much are stand alone blu-ray players suppose to cost?

A blu-ray player at launch will cost a little under $1000. Computer based drives will come in around $500 This is why Sony has to watch how much of a loss they can take, they can't undersell their partners.

An HD-DVD stand alone player will start at about $500.

I dont believe that it costs $800-900 to produce for one second. But whatever ML want to believe I will let them believe.

And what is with the huge difference between quotes. Umm here its $494.

Link (http://www.gamespot.com/news/2005/06/28/news_6128295.html)

Do these people know what the hell they are talking about. Because I dont know what to believe now.

Ohh look its by ML to!
Your link is over 7 months old.
This was based on estimates from Sony that relied on Sony knowing how to tape a high yield of Cell chips at a certain price point.
As everyone can see, Sony fell on their face with that.

http://www.hardfolding.com/ftag1.php/mem/172254.png (http://folding.extremeoverclocking.com/user_summary.php?s=&u=174409)

[Weazmeister]

Well, one of the things that people haven't mentioned is what MS' reaction will be upon PS3 launch. If MS comes back and undercuts the PS3 by a good margin by dropping 360 prices a lot, PS3 sales might not be as strong as people are guesstimating, even with some of the ridiculous price points being tossed out. Redmond has a lot to say in this game of cat and mouse still. The 360 would have much greater mass appeal even without the HD-DVD.

[Firewall]

your powers over the internet are weak young grasshopper

"Including manufacturing, Microsoft's bill comes to about $552, according to iSuppli, which represents the cost to get the Xbox off the production line in the factory."

So it costs about 550$ to produce, 200 shy of what your powerful google skills have discerned :rolleyes:

If you include marketing costs it *might* get up to around 700$ per console some places speculate. But the 900$ PS3 cost does not include marketing, that is just the estimated 800$ BOM + manufacturing costs.


Yeah, and where do you get your info? I've found multiple web sites to back up mine.

And even if you are right, that isn't good news for sony.
360 costs 525
ps3 800

Sony is going to be hurting

[Erasmus354]

Yeah, and where do you get your info? I've found multiple web sites to back up mine.

And even if you are right, that isn't good news for sony.
360 costs 525
ps3 800

Sony is going to be hurting

Try google search : iSuppli Xbox360


All of the top 10 results predict around the same 500-550$ cost.

[Weazmeister]

That's all nice and good, however ALL of the articles use one source :)

[Molingrad]

they should drop blu-ray and have a swappable drive. then when HD tvs are standards in households (which they arent now) release a upgrade

[heatsinker]

they should drop blu-ray and have a swappable drive. then when HD tvs are standards in households (which they arent now) release a upgrade

That didn't work for Sega and I'm pretty sure that wouldn't work for Sony either. The optional HD for the PS2 was released a while ago and I can count the amount of games that support it with my hands.

[MrGuvernment]

Well i beleive Warner has now jumped on the BluRay wagon, the ONLY major studio left is Paramount, it seems they cant decide on HD or BR - but if all the other large movie studios go with BlueRay - and BlueRay become the more supported format people may think

,mmmm , $800 gets me a BlueRay players AND a console... or i can spend $600+ (i have heard over $800) for just a blueray player.....


As before - xbox 360 cost $50 more to make,... they arent selling it for the makers price - we all know by now, and if not you must have no clue about consoles - consoles dont make money - games and add-ons do.


If by the time the PS3 comes out it still costs $800 to make one I see Sony being in a hard place.


So true, if it is delayed to 2007 as some talk says, then their parts will drop in price, likely the Blueray players which are probably the biggest tax on the system right now for the higher price.

[Xaeon]

Don't worry guys, I figured out how Sony can afford it...


MSRP of PS3 at launch:

$350 + 1 soul

[pr0pensity]

Sounds like bullshit.

[deathBOB]

Don't worry guys, I figured out how Sony can afford it...


MSRP of PS3 at launch:

$350 + 1 soul

I heard you only had to sacrifice a goat to get an Xbox 360 (only core though) :p.

I don't think I am going to be able to afford any next gen console save the Revolution :(

[jtsnewo4]

Sounds like bullshit.

I don't understand why people would call Shens on ML. It isn't like they are just out there pulling stuff out of their ass.

[flapbreaker]

Right now the games and peripherals for the 360 are sky high in my opinion. I wonder if they are going to cut the prices on these once the PS3 comes out. In some way this would be very smart. They recoup some of their losses on the console while Sony dick's around. Meanwhile when Sony launches they won't have the luxury of being the only HD gaming machine around and likely can't charge a premium for peripherals and games. What do ya'll think?

[heatsinker]

I don't understand why we shouldn't take it with a grain of salt. After all, it's an estimate, an analysis, a prediction, etc. Whatever happened to thinking for yourself? :confused:

[synergyo1]

The ML assessment seems reasonable to me if thats the hardware the PS3 is going to go with.

[Molingrad]

That didn't work for Sega and I'm pretty sure that wouldn't work for Sony either. The optional HD for the PS2 was released a while ago and I can count the amount of games that support it with my hands.

i dont think the marketplace is ready for bluray, so if they got on that boat then maybe they would sell more units at launch and an upgradable drive could work if they had good support for it. The sega CD and PS2 hard drive didnt.

Im guessing however that only a few games would ever support bluray and the majority of those that do will support it more as a PR stunt than because it was actually necessary.

[ameoba]

I'll take my detailed electronics industry analysis from ML when I start getting my stock picks from Panasonic.

[heatsinker]

i dont think the marketplace is ready for bluray, so if they got on that boat then maybe they would sell more units at launch and an upgradable drive could work if they had good support for it. The sega CD and PS2 hard drive didnt.

Im guessing however that only a few games would ever support bluray and the majority of those that do will support it more as a PR stunt than because it was actually necessary.

That's just the thing; it's all a PR stunt. There will be a format war in the future and Sony intends to win it by getting a BluRay player in every kid's home. I have no clue how useful it will be in terms of game development.

[Erasmus354]

I'll take my detailed electronics industry analysis from ML when I start getting my stock picks from Panasonic.

Contrary to what you believe, brokers dont only look at the stock market. The stock market is not some mysterious entity that has a life of its own. The fluctuations in the market ARE impacted by how the companies perform in real life. Thus, it is in brokerage firms best interest to get on the nose analysis as to how companies will perform in the future. ML is not just interested in the price/release of the PS3 for Sony or Microsofts sake. They are analyzing this for all players involved, Nvidia, ATi, Marvell, EA, and other hardware / software vendors.

Meryl Lynch makes more money when they get accurate analysis of how the companies will perform in the future. Therefore it is not in their best interest to delude themselves and try to act like a MS !!!!!! and call doomsday on Sony.

[RoffleCopter]

sell your soul and teh sony devil shall sell you teh ps3 for $666!!!111eleveN!!!

[LynxFX]

Well i beleive Warner has now jumped on the BluRay wagon, the ONLY major studio left is Paramount, it seems they cant decide on HD or BR - but if all the other large movie studios go with BlueRay - and BlueRay become the more supported format people may think.

Warner jumped a long time ago to Blu-ray as did Paramount (last fall). Universal is the only major studio holding strictly to HD-DVD. Most believe it is because now that they are the last to offer support, they have zero ability to negotiate some good terms, so they might as well just wait until they see that Blu-ray is actually moving titles and getting players into homes.

Sony's biggest competitor isn't Microsoft, it is Toshiba. Blu-ray drives in the PS3 is their biggest weapon and it won't be taken out.

I still say ML's estimate is on the extreme high side.

[PikachuMan]

That's just the thing; it's all a PR stunt. There will be a format war in the future and Sony intends to win it by getting a BluRay player in every kid's home. I have no clue how useful it will be in terms of game development.

This might just be me, but I don't see a format war anytime soon. Most people don't give a damn about either Blu-ray or HD-DVD movies, and would just prefer to stick with the ordinary DVDs.

On a game console, it might be different. That 8.5 gigs disc looks awfully small when you consider how much data GTA and some others now are starting to pack in.

[oneils]

I didn't see where they factored in the cost of the ball shaver?
Yeah, and that is the major reason why I'm buying it. You'd think they could have included it.;)

[Arkham]

ML must be smoking some fine cheddar if they really think the BR drive costs $350 to manufacture. (excluding all R&D)
All these braniacs are missing the point that there will be savings due the fact that there won't be full stand-alone BluRay hardware in the PS3. It uses software decoding via the Cell, and is certainly not going to be able to compete with a tier-one $1000 BR drive.

[heatsinker]

This might just be me, but I don't see a format war anytime soon. Most people don't give a damn about either Blu-ray or HD-DVD movies, and would just prefer to stick with the ordinary DVDs.

On a game console, it might be different. That 8.5 gigs disc looks awfully small when you consider how much data GTA and some others now are starting to pack in.

Since when do people know what they want? The market moves and advances on its own, regardless of what the people think they want. A lot of people doubted Sony would even get a couple hundred movies on UMD format, but now I can even get Musou Dairinin on UMD. The storage space is a plus for games, but I just have a feeling that DVD9 is still going to feel awfully roomy; unless they decide to do away completely with every form of compression known to man.

[Nomikal]

This might just be me, but I don't see a format war anytime soon. Most people don't give a damn about either Blu-ray or HD-DVD movies, and would just prefer to stick with the ordinary DVDs.

On a game console, it might be different. That 8.5 gigs disc looks awfully small when you consider how much data GTA and some others now are starting to pack in.

Yep, only enthusiasts, gamers, and a select others care for these formats...The general population could careless...which is partially how I feel...other things to think about.

[DudeItsMe]

On the Blu-Ray DVD topic... the jump from VHS to DVD was a very large one, and had a lot of obvious benefits for the general population... mainly it looked a hell of a lot better. I admit I haven't seen any Blu-Ray DVD's, but I doubt it's going to look so amazing that people are going to snap up after them.

[junehhan]

You should really give X a run if you liked VII. I'm excited for XII and hopefully the complete killer that XIII will shape up to be. ;)


Honestly, i've probably got a biased opinion on the FF series after 7 as I don't think i've forgiven Squaresoft yet for pulling the gutwrenching tragedy they pulled when they decided to let Aerith get killed. I was just starting to get attatched to her, and boom those jerks killed her off.

Right now, I probably can't afford any more RPG's than what's coming as I just don't have the time to commit to them. Unlike FPS's, RPG's seem to require a lot of time to really get into the game. Except for some weekends with holidays, I can't afford to spend more than an hour at a time gaming. RPG's seem to require "marathon" gaming sessions as you become involved in a fantasy world, and don't want to leave to join the ugly world of reality. That's probably why i'm avoiding MMORPG's like a plague.

For the person that asked, Fable is compatible on the 360, but i've heard that there are some glitches. I've got the PC version which actually looks pretty good.

[Erasmus354]

On the Blu-Ray DVD topic... the jump from VHS to DVD was a very large one, and had a lot of obvious benefits for the general population... mainly it looked a hell of a lot better. I admit I haven't seen any Blu-Ray DVD's, but I doubt it's going to look so amazing that people are going to snap up after them.


In a couple of "First Impressions" I have read from people who have looked at BluRay and DVD side by side (at CES for example) they were less than wowed by the improvement. If you have a decent upconverting DVD player the difference really is not very big.

[Firewall]

While it is true that most people dont' care, or even don't know about the upcoming format war, but you can bet they'll care when they find out how much more they have to pay.

Technology won't stop, and the fact that blu-ray will let me store 50 gigs on a dvd is great, but the cost will hurt them, and make the conversion from regular DVD slow.

[steviep]

Didn't Meryll Lynch also estimate the XBox360 to be $715? :rolleyes:

[theNoid]

Didn't Meryll Lynch also estimate the XBox360 to be $715? :rolleyes:

$750, so $900 for the PS3 sounds about right.

I expect Sony to retail the PS3 at $499 with a $399 lesser counter part.

[Domingo]

The last sales figures I saw (after Xmas) still put HDTV's in less than 10% of US homes. In those other 90%, Blu-Ray/HD-DVD won't make a bit of difference at all.
Having watched a lot of HD video and DVD's on a good DVD player, there's a difference but it's NOT THAT BIG. For those 90% without HD right now, there's none at all. Even most enthusiasts aren't really felling the need for a new format at the moment.
Already a lot of DVD's are needlessly put on extra disks just to make it a "special 2-disk unrated edition!" I don't even really see it being great to consolidate things as I'm sure they'll leave those disks half full and make multi-disks for them, too.
Right now the main advantage is to large games. Sony hopefully sees that the Blu-Ray demand isn't that huge at the moment and they will put the breaks on.
I'll still get one, but I'm one of those "early adopter" types that doesn't want to buy the system yet. I don't think it's ready and if there's a shot of a lower release-day price down the line, I'm all for it.

[flapbreaker]

For those 90% without HD right now, there's none at all.

Good point. WHat the hell is sony thinking???

[arentol]

The last sales figures I saw (after Xmas) still put HDTV's in less than 10% of US homes. In those other 90%, Blu-Ray/HD-DVD won't make a bit of difference at all.

Actually Blu-Ray/HD-DVD won't make a bit of difference in about 99.9% of all households since probably only 1% of all households with HDTV's have HDCP ready HDTV's.

So the only thing that Blu-Ray really does for the PS3 is allow developers to fit more content onto a single disk.

[steviep]

With dev costs ballooning, and games getting shorter and shorter due to sheer cost of making games in HD... I doubt you're going to see devs filling more than 2 DVD9's (hell, 1!) unless they include TONS of CGI movies, and forego a good compression scheme. With 10-hour games being the norm, I just don't see devs using Blu-Ray (which is slower to read than 16x DVD, atm, anyway!) at all for the first few years of the PS3's shelf life.

[diogo]

two things to keep in mind:
-whenever someone like Meryl Lynch releases an estimate, they know they are probably going to be off when it comes to the actual price. This is more of a warning, a way of telling its investor: "look out, if they don't do something about this, dump their stock quickly." Its like warning a driver that he is heading for a cliff. It just means: there is a problem, so watch out for what they are doing about it. You can bet that people at sony are well aware of this potential problem, and are trying really hard to solve it.
- as for people being wowed by BR, or whether they will be willing to move to it, I guarantee that quality has very little to do with it. Betamax was better than VHS. Laserdisk was better than VHS. Both formats failed, not because of quality, but because of a lack of software. Heck, I know many people who only switched to dvd when blockbuster stores started to carry only the dvds of new releases (and many people who only switched to cd because no one sold LPs anymore). So if movies are only released on the BR format, I guarantee that people will follow that. As for what they are going to do with the extra space, keep in mind that not too long ago people did not care at all for the extras, and now people will buy different copies of the same dvd because of these extras.

[Michael.R]

Im sorry but I have to say it again. I think this analysis is totally wrong.

I feel the same as what was stated in the article here.
Link (http://www.gamesindustry.biz/content_page.php?aid=14836)

Although it remains a possibility that Blu-Ray drives will be expensive to manufacture, hard evidence of this has yet to emerge - and there is widespread scepticism over the incredibly high price points being attached to the technology by many analysts, especially since the PS3 is expected to have a Read-only Blu-Ray drive, and most other Blu-Ray devices for which even tentative price points have been mentioned are more expensive Read-Write devices.

However, his assertion that the chip will be difficult and hence expensive to manufacture is thrown into doubt by comments made by IBM senior vice president William Zeittler earlier this month, when he said that the firm is succeeding in ramping up yields of Cell "faster than on any chip we've done."

Its a shame that the media is up in frenzy about this, and investers are selling off shares, but I guess thats what happens.

Just because sony hasnt released information doesnt mean they still wont launch in spring or summer. Didnt they release the majority of the PS2 information a month befor it launched? We really dont know anything about what is happening at the moment, other then the RSX is finished. There is even argument as to if the cell is finished and in production at the moment or if it has yet to be finalized.

Im also a little puzzled as to why they said the RSX is rumored to be delayed when Nvidia has said its just been finished befor the ML aricle was posted.

[pr0pensity]

Right now the games and peripherals for the 360 are sky high in my opinion. I wonder if they are going to cut the prices on these once the PS3 comes out. In some way this would be very smart. They recoup some of their losses on the console while Sony dick's around. Meanwhile when Sony launches they won't have the luxury of being the only HD gaming machine around and likely can't charge a premium for peripherals and games. What do ya'll think?
Accessories are supposed to have the highest profit margins, masqueraded by their relatively low prices. The console is more likely to drop in price sooner.

[WorldRunner]

Didn't Meryll Lynch also estimate the XBox360 to be $715? :rolleyes:

Yes...and they're right. If you didn't already know that the PS2, Xbox, and 360 have all sold at well below the cost of the hardware only (not counting R&D, not counting labor, not counting machinery, packaging, etc)

You'll probably never again see a console maker make a system below cost... Perhaps Nintendo but MS and Sony has shown they have no problems selling their machines below cost.

[WorldRunner]

With dev costs ballooning, and games getting shorter and shorter due to sheer cost of making games in HD... I doubt you're going to see devs filling more than 2 DVD9's (hell, 1!) unless they include TONS of CGI movies, and forego a good compression scheme. With 10-hour games being the norm, I just don't see devs using Blu-Ray (which is slower to read than 16x DVD, atm, anyway!) at all for the first few years of the PS3's shelf life.

I always thought that might be an effort to thwart FTP and P2P distribution of console games.

I think they've learned that they're not going to be able to prevent modding completely... Piracy would be significantly decreased if instead of a several hour 4gb download it was a several day 45gb download. Obviously there would be rips who knows if those would even work well...I guess we'll see. Because we really don't need that much space at this point...