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post #1 of 27 (permalink) Old 02-19-2006, 10:35 AM Thread Starter
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PS3 could cost over $800

You heard me, almost $900!

Merrill Lynch put out a report that the PS3 will likely slip to late 2006 or early 2007. The report also has this nugget.

Quote:
We wrote last November (The Next Game Consoles, 11/2/05) that Sony's design choices for the PS3 had resulted in an expensive and difficult-to-manufacture product, and we think that we're seeing the consequences of thoes choices play out now. In particular we think the problem points are the Sony Cell processor and the Blu-Ray drive. Our updated analysis indicates that the initial bill of materials for the PS3 could approach $900, falling to $320 three years from launch.
The PDF from Lynch is here:
http://rsch1.ml.com/9093/24013/ds/276873_0.PDF

Dude, I don't care how much I make. If the PS3 costs anything more than the XBox, there is no way I'm buying it. They can give up on parents getting this for their kids, it just ain't gonna happen.

I smell a really sweet opening for Nintendo and Microsoft. Sony's reign MIGHT be coming to an end.

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post #2 of 27 (permalink) Old 02-19-2006, 10:38 AM
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I disagree

Parents these days will buy their 11 year olds ANYTHING.
It defy's logic, but thats how it is
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post #3 of 27 (permalink) Old 02-19-2006, 10:44 AM Thread Starter
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Quote:
Originally Posted by aceman85turbo
I disagree

Parents these days will buy their 11 year olds ANYTHING.
It defy's logic, but thats how it is
You've got a point, but they'll have a choice between the PS3 and the much more affordable Revolution. This becomes especially important when you consider how disposable income levels have dropped for the last couple of years.

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post #4 of 27 (permalink) Old 02-19-2006, 11:41 AM
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fuck buying it for my kids, ill buy one for myself...




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post #5 of 27 (permalink) Old 02-19-2006, 11:47 AM
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It is not going to cost that much at the store, thats what it cost to make the PS3...There gonna sale it for a big lose on each console...probably close to what the 360 goes for

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post #6 of 27 (permalink) Old 02-19-2006, 11:50 AM
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Quote:
Originally Posted by aceman85turbo
I disagree

Parents these days will buy their 11 year olds ANYTHING.
It defy's logic, but thats how it is


I agree with you. We all saw how the 360's were going for $1,500+ on Ebay. Looks like only the superich will be able to afford those bad boys.
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post #7 of 27 (permalink) Old 02-19-2006, 12:34 PM Thread Starter
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Quote:
Originally Posted by RedHornet
I agree with you. We all saw how the 360's were going for $1,500+ on Ebay. Looks like only the superich will be able to afford those bad boys.
Good point..

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post #8 of 27 (permalink) Old 02-19-2006, 12:41 PM Thread Starter
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Quote:
Originally Posted by staticX
It is not going to cost that much at the store, thats what it cost to make the PS3...There gonna sale it for a big lose on each console...probably close to what the 360 goes for
Doubtful. As pointed out by the article, the Blu-Ray drive will cost arount $350 by itself. That's one of the reasons MS went with a regular DVD and will offer an HD-DVD as an add on attachment later. Then there is the Core processor which required IBM to build a new fabrication facility. The article puts its cost at $230. Those manufacturing costs add up.

Its been estimated that MS loses $100 to $200 per unit. Sony could end up losing as much as $400 per unit to price it near the 360. The problem is that MS can afford to lose money on each unit since they have money to burn. Sony is having financial problems right now so one has to wonder how much of a hit they can afford to take. Also, how many titles would they have to sell directly or license to make that money back. Then they have to figure how many of those titles will end up being rented or purchased used, which means even less money for them.

Don't get me wrong, I'm not wishing failure upon them. A strong showing, or continued domination, by Sony means MS will have to work harder. However, IMO, this bodes very well for Nintendo.

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post #9 of 27 (permalink) Old 02-19-2006, 12:56 PM
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Quote:
Originally Posted by Sgt Beavis
Doubtful. As pointed out by the article, the Blu-Ray drive will cost arount $350 by itself. That's one of the reasons MS went with a regular DVD and will offer an HD-DVD as an add on attachment later. Then there is the Core processor which required IBM to build a new fabrication facility. The article puts its cost at $230. Those manufacturing costs add up.

Its been estimated that MS loses $100 to $200 per unit. Sony could end up losing as much as $400 per unit to price it near the 360. The problem is that MS can afford to lose money on each unit since they have money to burn. Sony is having financial problems right now so one has to wonder how much of a hit they can afford to take. Also, how many titles would they have to sell directly or license to make that money back. Then they have to figure how many of those titles will end up being rented or purchased used, which means even less money for them.

Don't get me wrong, I'm not wishing failure upon them. A strong showing, or continued domination, by Sony means MS will have to work harder. However, IMO, this bodes very well for Nintendo.
There have already been lots of debating about this on many of forums. The cost of the unit to build is 900 dollars, it has been said by sony sources themselves, they are going to take a big hit to produce these units, but will makeup for it with the games. The PS3 might not go for $500 but it certianly is not going to go for $900. I would figure upper $500 to mid $600 to buy a PS3. How much did the 360 cost to make vs what they sold it for??? It cost in the lower $700's to make but were selling for $400, thats what a $300 hit per console. Sony will do the same and they will suceed

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post #10 of 27 (permalink) Old 02-19-2006, 01:01 PM
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You also forgot to mention that it's not likely we'll see the PS3 over here before 2007.

So a 2007 launch, at $500+ when the Revolution will be around $200 and the X360 around $300 (for the premium)... I think X360 and Rev will be the clear leaders this round. When parents buying their little ankle biters look at the cost, and see they can get the X360 AND a Rev for the cost of a PS3 (or less), it only makes sense to go with the 2 systems for the wider selection of exclusive games (since most games will be 3rd party/cross platform anyway)

I'd like to think the people retarded enough to spend $1500+ on the X360 on ebay were buying it for themselves, and not some bitchy brat. And likewise, I don't think parents are going to spend $500+ on a video game system for their kid. You've got the "1337" gamers who've got to have every single spec of technology, who'll willingly spend $500+ on a video card for their computer, they'd as willingly spend $500+ on an entire video game system.

As it stands, I'm still sticking to my initial statement. I'll buy the Rev when it launches. I'll buy the X360 when the mod community is in full swing. I'll buy the PS3 when the next Final Fantasy comes out (unless the FF series becomes cross platform, which it's rumored to be in the works, due to FFXI on X360. If FF goes cross platform, then fuck the PS3... it'll take a LOT to convince me to buy one at that point.)

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post #11 of 27 (permalink) Old 02-19-2006, 01:12 PM
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Quote:
Originally Posted by staticX
There have already been lots of debating about this on many of forums. The cost of the unit to build is 900 dollars, it has been said by sony sources themselves, they are going to take a big hit to produce these units, but will makeup for it with the games. The PS3 might not go for $500 but it certianly is not going to go for $900. I would figure upper $500 to mid $600 to buy a PS3. How much did the 360 cost to make vs what they sold it for??? It cost in the lower $700's to make but were selling for $400, thats what a $300 hit per console. Sony will do the same and they will suceed
Nope, it's costing MS $560ish for each X360, so selling for $400 they're only losing $160ish per console. If the PS3 costs ~$900 to build, and they sell for $500-$600 at retail, that's a $300 - $400 loss per console. That kind of loss is supremely difficult to make up in game sales. You're talking about each person that buys a PS3 is going to have to purchase around 30 - 40 games for Sony to break even. That's unlikely to ever happen. With game rentals, and used game stores, the likelihood of every PS3 owner buying 30 - 40 brand new games at ~$60 each is about as likely as the PS3 being sold at a $300 to $400 loss per console. They'd be burying themselves if they did that. It may not bankrupt Sony as a whole, but would certainly make the bigwigs think twice, and hard, about a PS4.

If the PS3 costs $900 to build, I can with relative certainty guarantee they won't sell it for less than $700. Any less than that, and it no longer is a "loss leader", it's then a constant source of lost revenue because it's highly unlikely they'll be able to make up that loss in software/accessory sales.

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post #12 of 27 (permalink) Old 02-19-2006, 01:40 PM
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Quote:
Originally Posted by DarkWolf
Nope, it's costing MS $560ish for each X360, so selling for $400 they're only losing $160ish per console. If the PS3 costs ~$900 to build, and they sell for $500-$600 at retail, that's a $300 - $400 loss per console. That kind of loss is supremely difficult to make up in game sales. You're talking about each person that buys a PS3 is going to have to purchase around 30 - 40 games for Sony to break even. That's unlikely to ever happen. With game rentals, and used game stores, the likelihood of every PS3 owner buying 30 - 40 brand new games at ~$60 each is about as likely as the PS3 being sold at a $300 to $400 loss per console. They'd be burying themselves if they did that. It may not bankrupt Sony as a whole, but would certainly make the bigwigs think twice, and hard, about a PS4.

If the PS3 costs $900 to build, I can with relative certainty guarantee they won't sell it for less than $700. Any less than that, and it no longer is a "loss leader", it's then a constant source of lost revenue because it's highly unlikely they'll be able to make up that loss in software/accessory sales.
Since I don't work for MS I can only read what they say that the 360 cost $700 to make, regareless I'll stick with my PS2 until the price comes down some or I get it for christmas. But I highly doubt the PS3 is going to be uppwards of $900 per console

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post #13 of 27 (permalink) Old 02-19-2006, 01:42 PM
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i actuall read/heard that the ps3 is coming in 2 models...one with the blue ray dvd and hardrive etc etc...and one without....the one with will cost 800 and the one without will cost somewhere close to what the core did for the 360.
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post #14 of 27 (permalink) Old 02-19-2006, 02:21 PM
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nintendo has, with each subsequent generation, gotten suckier and suckier. I count on it to go the way of atari and neo geo.
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post #15 of 27 (permalink) Old 02-19-2006, 02:51 PM
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Sony is lucky to have the Metal Gear series so I'm gonna get it regardless of the cost.
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post #16 of 27 (permalink) Old 02-19-2006, 06:06 PM
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This video game console stuff is getting kinda out of hand, and more and more out of the reach of the common man, even considering inflation.

As a parent, i'd feel pretty irrisponsible paying mega bucks for video game's like that, and not buying my kid a PC instead (or better yet the bits and making them build their own).

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post #17 of 27 (permalink) Old 02-19-2006, 07:00 PM
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Quote:
Originally Posted by DarkWolf
Nope, it's costing MS $560ish for each X360, so selling for $400 they're only losing $160ish per console. If the PS3 costs ~$900 to build, and they sell for $500-$600 at retail, that's a $300 - $400 loss per console. That kind of loss is supremely difficult to make up in game sales. You're talking about each person that buys a PS3 is going to have to purchase around 30 - 40 games for Sony to break even. That's unlikely to ever happen. With game rentals, and used game stores, the likelihood of every PS3 owner buying 30 - 40 brand new games at ~$60 each is about as likely as the PS3 being sold at a $300 to $400 loss per console. They'd be burying themselves if they did that. It may not bankrupt Sony as a whole, but would certainly make the bigwigs think twice, and hard, about a PS4.

If the PS3 costs $900 to build, I can with relative certainty guarantee they won't sell it for less than $700. Any less than that, and it no longer is a "loss leader", it's then a constant source of lost revenue because it's highly unlikely they'll be able to make up that loss in software/accessory sales.
Your numbers are a little skewed. The Xbox360 actually cost a little more than $700 to make, so a loss of $300 is more of what they are seeing. You forget the PS3 is going to be offering up much more than the Xbox360. Plus its not $900 to produce the PS3, it's $800. So not much of a difference in loss there.
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post #18 of 27 (permalink) Old 02-19-2006, 07:11 PM
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Maybe this time around, the high price tag will actually mean the system will be reliable. Nah I doubt it.
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post #19 of 27 (permalink) Old 02-19-2006, 07:13 PM
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Oh and as far as everyone talking about how much the 360 costs to make. Does anyone on here actually work for Microsoft or is this just message board my cousin's brother's dog's former roommate said hoopla?
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post #20 of 27 (permalink) Old 02-19-2006, 07:37 PM Thread Starter
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Quote:
Originally Posted by def1eppard
Oh and as far as everyone talking about how much the 360 costs to make. Does anyone on here actually work for Microsoft or is this just message board my cousin's brother's dog's former roommate said hoopla?
Well, I used to work for them


However, Business Week took a look at the 360 before launch and they came up with an estimate that the premium system would cost about $525 to manufacture. That's a $126 loss. It is, of course, big but that loss is EASILY managable when you consider how cash rich Microsoft is. Sony is NOT cash rich right now. In fact they are pretty much taking it up the ass, financially speaking. The question becomes, can Sony AFFORD to take even a $126 loss on their system, let alone a $400 loss. With that kind of loss per unit, it is unlikely Sony will make it up in licenses and direct game sales.

Here is the Business week article: http://businessweek.com/technology/c...122_410710.htm

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post #21 of 27 (permalink) Old 02-19-2006, 07:40 PM
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Well I believe figures around that range. I was talking more about the $300 loss....thats not really believable.
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post #22 of 27 (permalink) Old 02-19-2006, 08:05 PM Thread Starter
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Quote:
Originally Posted by def1eppard
Well I believe figures around that range. I was talking more about the $300 loss....thats not really believable.
Yea, I can understand that, but the total loss Sony will take depends on their final pricing. However, their costs are going to be centered around two key items, the Blu-Ray drive ($350 est) and the Cell processor ($230 est) Microsoft saved alot of cash by going with standard DVD. You can get a plain jane DVD drive for $15 at retail.

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post #23 of 27 (permalink) Old 02-19-2006, 08:24 PM
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Its gonna really piss me off if they just keep adding on extra shit to where consoles will cost as much as PCs. Thats pretty much the reason I don't play PC games anymore is because it costs too much money. I buy game consoles so I can play games!!
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post #24 of 27 (permalink) Old 02-20-2006, 02:39 PM
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Quote:
Originally Posted by staticX
Since I don't work for MS I can only read what they say that the 360 cost $700 to make, regareless I'll stick with my PS2 until the price comes down some or I get it for christmas. But I highly doubt the PS3 is going to be uppwards of $900 per console
Quote:
Originally Posted by SVTbasher
Your numbers are a little skewed. The Xbox360 actually cost a little more than $700 to make, so a loss of $300 is more of what they are seeing. You forget the PS3 is going to be offering up much more than the Xbox360. Plus its not $900 to produce the PS3, it's $800. So not much of a difference in loss there.
The $715 cost is a rumor by some guy that talked to some guy who knows some annonymous high ranking guy at IBM that said it costs $715 to build each X360.

Reuters, Business Week, C|Net, and various others, have the cost to build each X360 at $525. These are not "rumors on some gamer forum", these are actual, published, solid numbers.

Kinda like the actual, published, solid numbers on the PS3 costs. The $800 is parts only cost. Thus, it's estimated $900 to build each PS3.

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post #25 of 27 (permalink) Old 02-20-2006, 03:44 PM
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I can't justify spending $400 for a 360 when the games don't even use the full capabilities of the system . . . so you can sure as hell bet I'm not paying $900 for a PS3 . . . . That damn thing better have holographics and shit.

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post #26 of 27 (permalink) Old 02-22-2006, 08:06 AM
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sorry guys
can't remember the function of the chips, but my work is partially responsible for the delay in PS3 shipment. Sony is in "line-down" status waiting for product that we test.
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post #27 of 27 (permalink) Old 02-22-2006, 09:22 AM
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Quote:
Originally Posted by Turd
sorry guys
can't remember the function of the chips, but my work is partially responsible for the delay in PS3 shipment. Sony is in "line-down" status waiting for product that we test.
quit calling in!
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