Sony Is Struggling With PlayStation 5 Price Due to Costly Parts

Aurelius

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Y'all do realize that the $300 xbox isn't the real next gen part, right?
We do, but it still could shake up the game somewhat by offering a "close enough" experience at a price people haven't seen for a long time in a brand new TV console (not including the Switch, which is more of a hybrid).

The Xbox Series S also throws a monkey wrench into expectations for this console generation. It could struggle if the disc-free PS5 starts at $399, or if it leads to developers hobbling Xbox games to support slower hardware. However, it could also be a hit if people decide that saving $100 is more important than 4K gaming or fully next-gen visuals.
 

VIC-20

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Something to note though is that cost is actually more than people think, because of markup of retailers. So if it costs a company $400 to build something, and the retail price is $400 you might think they are breaking even. Nope, they are losing a LOT on that, probably $200 per. The reason is that normal retail markup is generally around 100%. It varies by item to be sure, but when you take in all the costs involved with getting an item to consumers, it just about doubles the price. So that shirt Target sells for $10, they bought for $5-6, but despite that they only make maybe 30 cents of actual profit after all the costs are factored in.

Thus if you want a console to retail for $500, you have to sell it to retailers for a lot less. May not be a 100% markup, since it is a more expensive good and not all that large and heavy, but you are selling it to them for $300-$350 at most probably. So the losses can be more serious than they might seem if you compare retail price to production cost.

Companies also have to be careful with it, because while licensing is where the money is, if there's too big a loss it can sink you. I mean suppose you lose $200 per console sold and you do a nice, brisk 20 million sales before you can bring that price down. That's $4 billion in losses you ate and have to make up. Takes a veeery high attach rate to make that up.
Have you worked in electronics retail?

Certain brands set their MSRP and wholesale to almost the same number, with certain products. I'm betting they only make between $5 and $25 on each unit. Its that way for Apple iPads and Macs for sure. Even a $3500 Macbook Pro would make the retailer less than $50. Sony sets maybe $100 retailer profit on their TVs. Epson projectors don't have much retail profit either. (Samsung on the other hand, sells their TVs much cheaper than MSRP to retailers. So there is money to be made on some products for sure.)

I'm betting consoles are one of those items with almost no retailer margin.

Why do retailers put up with those margins? Because they are very high demand products. If you want the "privilege" of having those customers to come to your store at all, you suck it up and try to sell accessories and warranties to make up for it.

Gamestop / EB Games has turned halfway into a toy store for a reason.
 

Templar_X

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You do realize consoles aren't really next gen right? :p
Yes! RDNA2 and 4+GB/s SSDs is completely the cheap and accessible mainstream we've had for years.. oh wait

C'mon, if you're gonna say that it's not top tier performance when competing with high end PCs, I can be with you on that.
But, for the announced prices, the alleged performance and technologies they bring do seem like next-gen stuff when compared to current offerings on the market at the same price level.
 

deruberhanyok

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They are "next generation" consoles, for sure, but that does not mean they are using all "next generation" PC parts. Although they are built on cutting edge tech - Zen2, RDNA2, SSDs pushing past PCIe3 speeds.

I'm a little annoyed that the Xbox "Series S" is so cut down compared to the Series X, but even then I would still call it next gen - aside from a GPU with more raw power, the capabilities it provides are all based on much improved tech than what was in the previous generation of systems.

I'm really curious to see how Sony responds - personally I think it would have been better if they did with this generation what they did with the last, and instead of releasing an "entry level" console, just waited until mid-cycle, introduced a "pro" version and then refreshed the regular one into the "slim". That would have set the baseline for all next gen console games extremely high. As it is, I don't see a lot of developers putting in the effort to develop with Series X as the target and then scale down for Series S - more like they'd target Series S and then add resolution/framerate improvements for Series X. That's too bad, but it does leave open the possibility that the PS5 will end up being the better console for exclusives (again), because any PS exclusive could assume higher performance for all (unless Sony's rumored discless PS5 is just as cut back as the Series S).

At any rate, I won't be buying either until the mid-cycle slim down (still working my way through games on my PS4 slim and Xbox One S), and I may end up with one from each camp anyways. They'll all be improvements over what I have now. :)
 

Marees

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As it is, I don't see a lot of developers putting in the effort to develop with Series X as the target and then scale down for Series S - more like they'd target Series S and then add resolution/framerate improvements for Series X.
Afaik, to avoid this problem, initially microsoft gave most developers only the Series X kit & not series S

So developers have to first develop game for series X and then optimize it for series S
 

deruberhanyok

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Argh, that would be exceedingly frustrating to me if I was told to develop for X target and then have someone come to me later and say “Now what can you cut back to make it run on this notably lesser device instead?”

really hope Sony doesn’t pull the same nonsense.
 

Marees

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Sony Corp. has cut its estimated PlayStation 5 production for this fiscal year by 4 million units, down to around 11 million, following production issues with its custom-designed system-on-chip for the new console

The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the coronavirus. But the company has come up against manufacturing issues, such as production yields as low as 50% for its SOC, which have cut into its ability to produce as many consoles as it wishes

Yields have been gradually improving but have yet to reach a stable level

https://www.bloomberg.com/news/arti...ut-ps5-forecast-by-4-million-due-to-chip-woes
 

jologskyblues

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Sony Corp. has cut its estimated PlayStation 5 production for this fiscal year by 4 million units, down to around 11 million, following production issues with its custom-designed system-on-chip for the new console

The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the coronavirus. But the company has come up against manufacturing issues, such as production yields as low as 50% for its SOC, which have cut into its ability to produce as many consoles as it wishes

Yields have been gradually improving but have yet to reach a stable level

https://www.bloomberg.com/news/arti...ut-ps5-forecast-by-4-million-due-to-chip-woes
Low yields huh? Aren't the PS5 SoCs fabbed on TSMC 7nm? If so, then NV and Qualcomm's move to Samsung's foundry is starting to make sense.
 

Marees

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Low yields huh? Aren't the PS5 SoCs fabbed on TSMC 7nm? If so, then NV and Qualcomm's move to Samsung's foundry is starting to make sense.
My guess is that sony initially targetted the $400/$500 target for the digital vs regular.

But because of yield issues (due to high freq?), they probably are gonna bump it up to $450 & $550
 

5150Joker

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PS 5 SoC is having major yield issues with only 50% being viable so Sony had to cut orders to 11m units from 15m. That's a pretty substantial cut and considering the SoC is a Zen 2 + Navi 2x, could this spell trouble for Big Navi which should have much bigger dies than the PS5 APU? Relevant article: https://www.bloomberg.co.jp/news/articles/2020-09-15/QGFJPPDWLU6M01

"PlayStation (PS) 5" to be released within the year by 4 million units in this term (ending March 2021) to about 11 million units. Became. The production yield of the specially designed integrated circuit "System on Chip (SOC)", which corresponds to the heart of PS5, is not stable.

Due to the non-disclosure of the information, several parties have revealed it on condition of anonymity. In July , the company informed its parts suppliers that it would double its production volume, considering that the consumption of nesting due to the spread of the new coronavirus infection would support demand even after the year-end sales season.

According to the person concerned, the yield of SOC has been sluggish at about 50%, and the production volume has to be reviewed. He said that the yield is improving, but the quality has not reached a stable level. A Sony spokeswoman declined to comment.
If this happened to Sony, then MS with their bigger X Series might also be suffering from the same yield issues which would mean they will push Series S really hard this Christmas. So what does all this mean for the RX 6000 series? I would think since all of these guys are using the same TSMC process, then AMD won't be immune to the yield problems either and they might not have enough Big Navi available and we'll end up with a paper launch. If this happens, it will be incredibly ironic if NVIDIAs decision to go with Samsung results in better yields and more products on shelves considering so many so-called insiders speculated that NVIDIA would have shortages (first it was Samsung yields and now it's coolers, they can't make up their minds).


EDIT: Just noticed this was mentioned above. But still, the point remains that this could be bad news for Big Navi as well.
 

UnknownSouljer

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Where is the accompanying Xbox series X article? It should similarly have bad yields. As long as we’re making assumptions anyway.
 

5150Joker

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Where is the accompanying Xbox series X article? It should similarly have bad yields. As long as we’re making assumptions anyway.
Just because the information for Series X isn't out there doesn't mean they aren't prone to it. Are they using some special Lisa Su Sauce ™ that you think Sony doesn't have access to?
 

Marees

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Where is the accompanying Xbox series X article? It should similarly have bad yields. As long as we’re making assumptions anyway.
Sony speculation is based on Bloomberg sources.

My guess on Xbox is that since MS cheaped out on gpu frequency, ssd etc compared to Sony, they don't have yield/price issues
Or Microsoft is willing to eat loss on xbox, gamepass, xcloud etc to get more subscriptions

What they will do with all those subscriptions, I am not sure, tho.
 

5150Joker

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Sony speculation is based on Bloomberg sources.

My guess on Xbox is that since MS cheaped out on gpu frequency, ssd etc compared to Sony, they don't have yield/price issues
Or Microsoft is willing to eat loss on xbox, gamepass, xcloud etc to get more subscriptions

What they will do with all those subscriptions, I am not sure, tho.
MS can also allocate those bad yields to Series S and Sony can't do the same. So that could also explain why MS isn't as panicked and can undercut them.
 

variant

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Just because the information for Series X isn't out there doesn't mean they aren't prone to it. Are they using some special Lisa Su Sauce ™ that you think Sony doesn't have access to?
Microsoft went with more CUs at lower stable clock speed. Every single PS5 APU has to hit the same minimum at a specific temperature threshold to fit in the console box, or it has to be completely discarded. As the post above me pointed out, there is typically no binning for consoles.
 

UnknownSouljer

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Just because the information for Series X isn't out there doesn't mean they aren't prone to it. Are they using some special Lisa Su Sauce ™ that you think Sony doesn't have access to?
I think precisely the opposite. Either this is FUD or significantly more product lines are affected. As has been rightly pointed out, this would affect RDNA2 and XSX.
 

Meeho

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PS 5 SoC is having major yield issues with only 50% being viable so Sony had to cut orders to 11m units from 15m. That's a pretty substantial cut and considering the SoC is a Zen 2 + Navi 2x, could this spell trouble for Big Navi which should have much bigger dies than the PS5 APU? Relevant article: https://www.bloomberg.co.jp/news/articles/2020-09-15/QGFJPPDWLU6M01
Or, it's Sony spewing BS to hide their pricing issues due to MS finally learning how to play the game, and changing their BOM to stay alive?
 

defaultluser

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Or, it's Sony spewing BS to hide their pricing issues due to MS finally learning how to play the game, and changing their BOM to stay alive?
Well, I dunno, the PS5 and Xbox SeX are both significantly larger than the RX 5700 XT. That pure AMD GPU also run at about half the peak CPU clock speed the SeX does.

It can't be the clocks, as Renoir yields well at over-4ghz (but they cut-back the GPU die size to improve yields). I would imagine the mixed clocks of an APU make such a large revision harder to build (and is one of the reasons for having 20% lower clocks than Renoir)

I could easily believe poor yields are the reason NVIDIA primary-sourced Samsung for the first time ever...you can expect TSMC to handle the 3050.
 
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kamikazi

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Well, I dunno, the PS5 and Xbox SeX are both significantly larger than the RX 5700 XT. That pure AMD GPU also run at about half the peak CPU clock speed the SeX does.

It can't be the clocks, as Renoir yields well at over-4ghz (but they cut-back the GPU die size to improve yields). I would imagine the mixed clocks of an APU make such a large revision harder to build (and is one of the reasons for having 20% lower clocks than Renoir)

I could easily believe poor yields are the reason NVIDIA primary-sourced Samsung for the first time ever...you can expect TSMC to handle the 3050.
Jim disagrees with you. There is nothing wrong with TSMC. nVidia didn't want to pay for TSMC access. They saved around $25 per GPU going with Samsung 8nm and may have screwed themselves in the mobile arena by doing so. Next gen Ryzen APUs may mop the floor with nVidia in laptops.
 

Meeho

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I could easily believe poor yields are the reason NVIDIA primary-sourced Samsung for the first time ever...you can expect TSMC to handle the 3050.
TSMC seems to have capacity/allocation problems more than yield.
 

Marees

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I don't think the reported yield issues are due to TSMC's process. RDNA 1 has been running on TSMC 7nm for more than a year. So this process is a known quantity.

I suspect Sony trying to crank the GPU clocks all the way up is the most likely reason for yield issues. I believe originally the clocks were not as high, but after it became known that MS was going for a massive die, Sony might have pushed the clocks all the way up.
 

defaultluser

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TSMC seems to have capacity/allocation problems more than yield.

Welll, we knew that allocation problem already (because AMD keeps increasing their orders),

But now that someone is finally building a mass-production die over 250 on TSMC7, we will have that data...and so-far, it's not looking good!
 

Marees

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odditory

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We have not changed the production number for PlayStation 5 since the start of mass production."
Seems like there's a clue in the "since the start of mass production" qualifier. Perhaps they changed it right before.

But who cares. So much supply chain gossip and FUD suddenly "tech news" now and being regurgitated by every clickbait site and youtuber.

My production number of one PS5 order hasn't changed as long as Demon's Souls remake still beckons me.
 
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vegeta535

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Seems like there's a clue in the "since the start of mass production" qualifier. Perhaps they changed it right before.

But who xares. So much supply chain gossip and FUD suddenly "tech news" now and being regurgitated by every clickbait 'tuber.

My production number of one PS5 order hasn't changed thanks to the Demon's Souls remake.
Seriously. People are just looking too much into everything and have zero facts to backup their accusations.
 

5150Joker

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Jim disagrees with you. There is nothing wrong with TSMC. nVidia didn't want to pay for TSMC access. They saved around $25 per GPU going with Samsung 8nm and may have screwed themselves in the mobile arena by doing so. Next gen Ryzen APUs may mop the floor with nVidia in laptops.
Just another moronic video from this guy. MaxQ even on Samsung 8nm will still sell like crazy and NVIDIA can undervolt/underclock 3070 class cards and stuff them in laptops easily. Plus this video makes a lot of bs assumptions like the cost of wafers (which he admits he has no clue about) and then comes up with the bullshit figure of $25 savings. He then harps on Igor Labs/MLID's unfounded rumors of NVIDIAs cooler costing $150 which again has no basis in reality to back it up. Finally, he goes off on a tangent about power consumption and heat generated and the environmental impact it would have..lmao. Why do people listen to this buffoon?

Edit: forgot to mention, he begins his rant talking about the doubling of the CUDA core counts and then just never really says much at all while trying to slyly imply that NVIDIA is lying when the whitepaper is out there for anyone to read.
 
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Dion

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Yes! RDNA2 and 4+GB/s SSDs is completely the cheap and accessible mainstream we've had for years.. oh wait
I'd rather they use a SATA or NVME drive.. And put that saved cost into something more useful.. Like a more powerful CPU or GPU. I don't really consider 5-10second load times long.

Heck Ghost of tsushima already loads in 8 seconds on a platter drive.. Maybe make more optimized games first :O

All I want from consoles is 60fps.. And we never get that :(
 

defaultluser

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We're FINALLY going to find out what this fucking thing's price will be tomorrow, after 6 months of wast effort by folks in this thread guesstimating.

If it's $500, it will be back in stock by March, but if they sell this much horsepower for only $450, it's going to be sold-out for the next year.

The one thing that Xbox launching at $500 guaranteed is that Sony won't be more expensive than that, but they just have to decide if they would rather break-even now, or do it through attach rate. We know they will sell ton of their exclusies when they launch.
 
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odditory

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We're FINALLY going to find out what this fucking thing's price will be tomorrow, after 6 months of wast effort by folks in this thread guesstimating.

If it's $500, it will be back in stock by March, but if they sell this much horsepower for only $450, it's going to be sold-out for the next year.

The one thing that Xbox launching at $500 guaranteed is that Sony won't be more expensive than that, but they just have to decide if they would rather break-even now, or do it through attach rate.
The discless PS5 will be $399 and its going to be more sold out than ur mom™
 

defaultluser

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The discless PS5 will be $399 and its going to be more sold out than ur mom

I'm assuming they will maintain the $100-off price-point for discless no mater what the with-disc PS5 launch price is. BBut $50 more for discless is a lot easier to sell folks on than paying $100 more, even if it has most of the features enabled.
 

kamikazi

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Just another moronic video from this guy. MaxQ even on Samsung 8nm will still sell like crazy and NVIDIA can undervolt/underclock 3070 class cards and stuff them in laptops easily. Plus this video makes a lot of bs assumptions like the cost of wafers (which he admits he has no clue about) and then comes up with the bullshit figure of $25 savings. He then harps on Igor Labs/MLID's unfounded rumors of NVIDIAs cooler costing $150 which again has no basis in reality to back it up. Finally, he goes off on a tangent about power consumption and heat generated and the environmental impact it would have..lmao. Why do people listen to this buffoon?

Edit: forgot to mention, he begins his rant talking about the doubling of the CUDA core counts and then just never really says much at all while trying to slyly imply that NVIDIA is lying when the whitepaper is out there for anyone to read.
I've had my own issues with the way this guy works in the past, especially when he went off the rails and basically told everyone who called him out to F off. However, if you watch the videos just for analysis and some of the leaks he gets, you can filter out the BS and come away with something useful. My takeaway from this video is that nVidia wanted TSMC, but didn't want to pay for the privilege. TSMCs 7nm would have had this GPU achieving the same performance at lower power levels. nVidia had to massively increase the number of cuda cores to make up for the lower clock speed offered by Samsung 8nm. Power draw increases linearly with more cores, but it increases exponentially with higher clock speed. Therefore, the only option was more cores. With TSMC, they could have gone with a more balanced core and clock speed increase at a lower power level. No one is saying that the 30 series will not perform, it's just going to be hot. I'm willing to bet that AMD will be able to compete with or surpass nVidia's underclocked mobile 3070 with their APUs next year.
 

Aurelius

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*dip toes into a console-wars thread***gets the hell out*
The funny thing is that it's not really PlayStation versus Xbox, it's people trying to argue that a $2,000 gaming PC which needs upgrades every 2-3 years (not to mention considerably more software hassles) is somehow a better value for everyday gamers than a $500 console that might never need to be touched for 5-7 years.
 

Verge

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The funny thing is that it's not really PlayStation versus Xbox, it's people trying to argue that a $2,000 gaming PC which needs upgrades every 2-3 years (not to mention considerably more software hassles) is somehow a better value for everyday gamers than a $500 console that might never need to be touched for 5-7 years.
Not even the worst part, cheating is so rampant in PC games i honestly don't know how people can stand to play them.
 

Domingo

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The bizarre loyalty console games have to one company vs. another has always puzzled me. It's borderline political with people doing mental gymnastics to explain why their favorite is better at literally everything. It's even more amusing when PC's get brought up. At least up until very recently. I think PC opinions have shifted a lot in the last 3-4 years. In the past you'd think a PC cost $10K, had to be upgraded every week, and required hourly maintenance to operate.

Anyway, seems like today is the day when we should get pricing, availability, and (hopefully) ordering info. Hopefully some new game (or upgraded PS4 game) announcements, too. At this point I think I'm committed to the system with a disk drive for the sake of movies. Should be interesting to see if people flock to the digital one based on price, though.
 

Aurelius

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Not even the worst part, cheating is so rampant in PC games i honestly don't know how people can stand to play them.
That's certainly part of it. I'm rather glad to play Fall Guys on my PS4, because I haven't had to deal with a single cheater since launch. It's only now that Fall Guys has some significant anti-cheat measures on PC, and I still wouldn't be completely surprised if people find ways to play dirty.
 

jeremyshaw

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That's certainly part of it. I'm rather glad to play Fall Guys on my PS4, because I haven't had to deal with a single cheater since launch. It's only now that Fall Guys has some significant anti-cheat measures on PC, and I still wouldn't be completely surprised if people find ways to play dirty.
It's EAC - practically anti-cheat in name only. Not that any of the other systems have had much success in stopping cheaters. In the end, there was a MSFT Xbox One security presentation that was floating about last year, that really described the problem well. [paraphrased] "On a PC, we can assume the owner is working with us to protect the system from malicious, outside attacks. On a console, the owner is the attacker, so we must change our approach to security."

Of course, any attempts to lock down the PC in any way usually result in strong backlash, and rightly so. On a console, I expect it to play some (not all) games... and that's about it. Some people still use a console to play media, for some reason, even though the worst smart TVs are still serviceable and a HTPC is vastly superior (save price, assuming purchased new for whatever reason). On a PC, I'm doing my finances, work, and gaming is a distant 3rd. I'm not going to allow any game to intrusively take over my PC just for gaming.
 
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Aurelius

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It's EAC - practically anti-cheat in name only. Not that any of the other systems have had much success in stopping cheaters. In the end, there was a MSFT Xbox One security presentation that was floating about last year, that really described the problem well. [paraphrased] "On a PC, we can assume the owner is working with us to protect the system from malicious, outside attacks. On a console, the owner is the attacker, so we must change our approach to security."

Of course, any attempts to lock down the PC in any way usually result in strong backlash, and rightly so. On a console, I expect it to play some (not all) games... and that's about it. Some people still use a console to play media, for some reason, even though the worst smart TVs are still serviceable and a HTPC is vastly superior (save price, assuming purchased new for whatever reason). On a PC, I'm doing my finances, work, and gaming is a distant 3rd. I'm not going to allow any game to intrusively take over my PC just for gaming.
There are a few times when you'll want to use a console for media. The most obvious example is people with older TVs. It's not uncommon to miss out on certain media apps as your TV gets older and the vendor or developers decide it's not worth supporting (I can't install Apple TV+ on my 2017-era LG, for example). A console can fill those gaps. And yes, there's also the simple question of convenience. It's easier to flip over to Netflix or YouTube if you just finished a game and don't want to switch inputs.
 
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