Console Makers Prep For 65nm

[HardOCP News]

Sony and Microsoft are prepping for the transition to 65nm which, aside from the performance / thermal benefits, will bring down manufacturing cost significantly. Even though the Xbox 360 has been rumored to already be close to breaking even, this report estimates a $126 loss per console while the PS3 is said to be losing over $300. An estimated savings of $150 by moving to 65nm would be huge.

iSuppli's research shows that, at present, manufacturing costs of the two PS3 models – 20GB and 60GB-hard disk drive – are US$306.85 and US$241.35 higher than the current retail prices. According to the research firm's estimation, the Xbox 360 Premium package which is priced at US$399, actually houses a bill-of-material (BOM) cost of US$525

 

[michealo]

i thought the xbox360 was already making a profit on each unit sold. wow

 

[Draax]

The kind of BOM which was used to determine the price of the XBOX360 is key here I think. Part of my job is drafting up products I design, and some clients require BOMs right done to the constituent parts. Now if im pricing constituent parts, there is no gross pricing or assembly / sub-assembly pricing listed.

 

[Ockie]

I don't believe that the Xbox360 is still losing money, I just cant' swallow how a 400 dollar computer (essentially that is what it is) with the production of 4 million so far can still be losing money...

 

[Diavire]

Because it's obviously not a 400 dollar computer, buying somewhat equivalent hardware in PC form costs a lot more, and they have to make it work in a much smaller form factor.
They've just put a 400 dollar price tag on it, it's really not that hard to understand.

That goes for PS3 as well.

 

[Ockie]

So you honestly believe that the true cost is $570 at a production of 4 million units. Do you have any idea how much 4 million is? ... I guess I didn't think so.

Even if you took a thousand dollar pc and produced 4 million units, you are looking at sub 400's in the price range.

 

[Diavire]

Meanwhile, outside of magical pony land, that's exactly what the article is telling you.

Or do you think Microsoft isn't expertly squeezing every cent off of the construction costs?

 

[Ockie]

Meanwhile, outside of magical pony land, that's exactly what the article is telling you.

Or do you think Microsoft isn't expertly squeezing every cent off of the construction costs?

You've made two posts and you are already heading in the wrong direction. Nice going.

 

[Nemesis999]

So you honestly believe that the true cost is $570 at a production of 4 million units. Do you have any idea how much 4 million is? ... I guess I didn't think so.

Because, of course, it costs $0 to design components and all manufacturers sell them at cost.

All those costs are rolled into the component costs. Since when does Microsoft manufacture every single component themselves? Every company that puts parts into that machine has a profit margin. Buying a lot of products isn't going to make the prices suddenly go to nothingness.

There's nothing unreasonable about a $570 price tag.

Even if you took a thousand dollar pc and produced 4 million units, you are looking at sub 400's in the price range.

Since we're comparing this to PCs... Computer retailers have razor thin profit margins. Most operate in the 5% range. Dell ships somewhere in the range of 25 million computers a year and posts a profit margin around 6%. I guarantee you that they have contracts for most of their components in the million units range.

 

[Nemesis999]

WTB: Edit Button.

All that aside. Why would you assume that an Xbox360, with a manufacturing volume of a few million, would cost less to produce then a computer made with components manufactured by the tens of millions? Almost every part in an Xbox360 is custom made for that one purpose. In a PC that part is made possibly by the tens of millions.

You've made two posts and you are already heading in the wrong direction. Nice going.

By disagreeing with you? Why is it that people are under the delusion that they're better just because they have enough time to post endlessly? Especially considering the content of your posts in the ATHF thread I don't think you have room to speak.

 

[Diavire]

You've made two posts and you are already heading in the wrong direction. Nice going.

@ forum: sorry for the resurrection, I'd forgotten about this thread.

Ockie: Yeah, you be real proud of that [H]ardness Supreme title, I'm sure it makes you feel very warm and fuzzy, but again, in the real world, you're not the end all and be all of knowledge, and disagreeing with you is hardly the wrong direction.

Nemesis999:

Thanks, and good points ;D