PlayStation 3 to Sell For $399, Going Underground

Merrill Lynch Japan has conducted research that indicates that the PlayStation 3 will retail for $399. According to Gamespot's coverage of the paper, the unit will cost $494 to manufacture. Sony will thus be taking an almost $1 Billion loss in the first year of the PS3's lifespan. From the article: "It is normal for game companies to take a loss on hardware whenever a new console launches, since they typically focus on acquiring market share rather than generating a profit during the first year. During the second year and afterward, they can recover the losses with the savings that come from mass production and with licensing fees from publishers." Meanwhile, Press the Buttons is reporting on a Pro-G article in which SCEE Chief David Reeves states that "I feel proud that E3 went well from the presentations that they did...I feel very happy about that, but I told the troops: OK now we go underground. The PS3 goes underground until it comes out next year."

Comments

No surprise here

[JonN]

This isn't quite a surprise, as there has been a loss on consoles ever since the switch from cartridges to the inexpensive discs. The price for a disc at the high amounts they purchase them would probably be under 10 cents/disc. Now when you see that each game is going to be priced at ~$60 it is easy to see where the profit is.

Don't get me wrong, I'm not saying that video games only take a nickle/disc to make, there are so many games out there that fail, even to the point of being fully developed but never shipped, that these companies need to balance the costs.

Re:No surprise here

[AnonymousJackass]

I'm curious -- does anyone know roughly how much of profits from games goes to the console manufacturer? I wouldn't have thought it'd be much because the retailer/game producers/distributers/etc would want their cut first. Would revenue from the games be enough to make up Sony's shortfall?

Re:No surprise here

[xMilkmanDanx]

AFAIK, the licensing costs to produce a game for a console are pretty steep. That's part of why a console games are more expensive than PC games (at least when the console is new).

Re:No surprise here

[devmage]

Sony and Microsoft may be able to afford throwing away that kind of money but Nintendo never has. I still think Nintendo may end up on top this time, maybe not on top of the Hype, but in terms of market penetration, and profit.

Re:No surprise here

[Daxx_61]

It's exactly like Gillette, when they first released safety razors. They sell the razor itself for almost nothing, and the blades are really expensive. They even give them away - I got one for my birthday from them!

Re:No surprise here

[m4dm4n]

I'm sure I remember hearing it was around $10/copy sold went to the manufacturer of the console.

Re:No surprise here

[Evangelion]

They won't succeed in the US unless they get HDTV support on the Revolution, which isn't in the cards.

Re:No surprise here

[generic-man]

Check out amazon.co.jp's best-selling games. Tack on 5% sales tax. They're all over $60.

Selling games for $60 is not a new thing in Japan. They'll still sell them in the US for $50. The Nintendo 64 proved that $60 is too much money for an American consumer to spend on one game.

Re:No surprise here

[EyesofWolf]

I'm not saying that video games only take a nickle/disc to make

Especially when you take into account the increased wages that the voice actors need to survive.

Re:No surprise here

[bodester17]

The game manufactorers get the profit from the game sales, not sony. Sony receives licensing money from the game companies, i.e. EA Games pays sony for Need For Speed Underground PS3 License.

Re:No surprise here

[generic-man]

Two exceptions:

Everyone Loves Katamari (Minna daisuki katamari damashii) is about $45 US.

Some pachinko/slot game is the same price.

18/20.

Re:No surprise here

[Anonymous Coward]

The average person doesn't give a crap about hdtv, so I really don't see how that would affect it.

Yes it's a nice to have feature, but the games are where it counts. So far it looks like I won't be getting a console at all this time around. Haven't seen any interesting games.

Re:No surprise here

[Cornflake917]

Yeah because a console's success is 100% dependent on it's HDTV support. Just look how much more X-boxes are sold than PS2's. Oh wait....

Re:No surprise here

[dpilot]

I suspect Nintendo knows their market, and it's not the top-feeders. I don't have 1080i, not even 720p, and neither do most of the people I know. Given the penetration rate of HDTV, I'd say that at the lower end it's feasible to ignore 1080i for this generation, if a little risky. For the current generation, Nintendo has occupied a lower space than XBox and PS2, and it looks like they're playing there, again. The XBox2 and PS3 are sounding so expensive that they may actually expand Nintendo's niche, assuming it's well-tuned to its market.

I agree that the XBox2 and PS3 will need 1080i, and everyone in the following generation will.

Re:No surprise here

[robertjw]

I don't know that any money from the game profits go to the console manufacturer. I believe Sony just charges a licensing fee and provides an SDK to developers that want to create games. The nice thing about this model is Sony gets paid regardless of the success of the game.

Re:No surprise here

[robertjw]

Keep in mind that the HDTV penetration will probably increase significantly in the next year due to the scheduled elimination of analog over-the-air TV broadcasts. HDTVs will probably drop in price and become much more affordable when that happens.

Re:No surprise here

[qodfathr]

I'm pretty sure you are in the right ballpark -- the license is about $10/copy. (Well, it used to be, back in the 90's. I'm not sure about today, but, given that games have always seemed to cost around $50, I assume the license fee has remained about the same.)

Re:No surprise here

[Torgo's Pizza]

You have your economics a bit mixed up here. You're confusing two separate product lines: consoles and game manufacturing. The two have extremely different cost structures.

The literal manufacturing cost of a game has very little to do with the final price of a title. Using your $.10 a disc model (which isn't that far off actually) it doesn't take into account the content of the disc. When you're spending $10 million to produce a game, you've got to recover your investment somehow. Outside of the royalty fee that publishers pay per title, the price of a game has very little to do with the console manufacturer.

The strategy that they are using is take a loss early by getting their console into the hands as many consumers as possible. Over the next five years, you recoup your initial losses through royalty fees, accessories (where the real money is at) and add-on services. It also helps when manufacturing costs go down over time to build your consoles.

One last note: You're a bit incorrect in assuming that companies made losses switching from cartridges to discs. The physical cost of a cartridges is expensive compared to a disc. However, it can be argued that the biggest cost from Nintendo not moving to a disc based system for the N64 gave direct rise to the Playstation since it was originally designed to be used by Nintendo.

Re:No surprise here

[nitehorse]

That's actually not really true.

(from the linked page)

By the time the PlayStation came out in North America 4 months later, a lot
had changed during the year. RAM had gone from $50US a megabyte to $20. The Yen had gone from 80 yen per US dollar to 110. And Sega had dropped the price of the Saturn to $299. At this point the PlayStation was indeed profitable, and the Saturn was a minor money pit for Sega.

and:

In the end, before the first PS2 rolled off the production line for consumers, Sony had spent $2 billion! TWO BILLION!

Then we look at Sony's stock report for Oct-Dec 2000, and there is an interesting little blurb. It said that had Sony been able to meet demand with another 1 million PS2 units, they would have pocketed $175 million in profits. $175 million divided by one million consoles equals $175 per console profit.

Sony hasn't yet sold a console at a loss. Nintendo did not sell the N64 at a loss (although it appears that the Gamecube was sold at a loss for a while). Sega was the first major videogame system manufacturer to do it and they went out of business. Microsoft also did it but they have too much money for such a small loss as a billion dollars to bankrupt them.

Re:No surprise here

[SirSlud]

If HDTV meant anything to the Nintendo consumer base, they'd have shunned the GC for Xbox.

Really, I think IGN whining for HDTV is a product of Matt and the other cube.ign.com guys being sick and tired of not being able to compare dick sizes with the xbox and ps2 staff.

Nintendo never was about the hardware; and the fact that PS2 fucking blows chunks from a technological standpoint vs the Xbox and the GC provides a good example of how much of a red herring HDTV is.

Games, market perception, and release timing .. thats where its at. The vast majority of users I've met couldn't even tell you the PS2 was less powerful than the Game Cube, so how is anybody but the home theatre crowd going to care whether the console sports HDTV. I simply don't think they will. I think ign.com vastly overestimates their consumer base's desire for cutting edge home theatre gear.

Re:No surprise here

[Joe5678]

Digital television will likely become much more affordable. Although HDTV is digital, not all digital televisions are HDTV. HDTV's will likely still be only for enthusisits.

Re:No surprise here

[Golias]

Every time somebody says that Nintendo doesn't need to bother with HDTV because "nobody" has it right now, it sounds to me almost exactly like the apocryphal "640k should be enough for anybody" line.

HDTV is not in a lot of family rooms today, but that will change fast.

Using the tiny data set of "people I know", I'd say maybe 10% of them have some kind of HDTV as their main TV set... but of the other 90%, almost all of them expect that they will be buying one within the next two years.

Usually all it takes is for them to watch a movie or football game at a friends house on a big wide-screen set to get them saying, "I think I should start saving up for one of those."

Nintendo is making a huge mistake. Unless their console is somehow significantly cheaper than the PS3 and X-Box360 (and by that, I mean in the $200 range on day 1, with lower-costing games as well), they are in for a really bumpy ride.

Re:No surprise here

[MindStalker]

I seriously doupt Sony makes 175 profit on each system sold. Its probably a story of total profit fom game licensing accessories etc for each console sold averages about 175 per year.

Re:No surprise here

[dhasenan]

I wouldn't have thought it'd be much because the retailer/game producers/distributers/etc would want their cut first.

Actually, according to an article I read the other day on Gamasutra (if I recall correctly), retailers get about $2-5 per copy sold. And oftentimes they're lucky to pay no more than the MSRP for the console.

That doesn't necessarily apply to larger stores like Electronics Boutique or Gamestop. I trust them to have special arrangements.

Re:No surprise here

[Golias]

Except that's not really the model they use anymore.

The "Mach 3" and "Mach 3 Turbo" cartriges are sometimes cheaper than Bic disposables, depending on where you shop, while the cheezy plastic handle for them is something like eight bucks.

Schick's offerings are priced along similar lines.

I think the "lose on the razor, make it back on the blades" model fell apart when people who already owned the razor handles started buying twin-blade disposables anyway, leaving their fancy handles in the back of a bathroom drawer.

Then they suddenly learned that "vendor lock-in" requires a lot more than a shiny chrome handle to actually compell people to stick with your product.

Re:No surprise here

[Anonymous Coward]

I don't think an op-ed piece is definitive enough proof to call shananigans on the "console at a loss" theory.

Re:No surprise here

[WhyCause]

The Nintendo 64 proved that $60 is too much money for an American consumer to spend on one game.

Oddly enough, the single most expensive game I ever bought cost me $72 (after 6% sales tax); it was on the SNES, not the N64, so at one point, consumers were willing to spend $60+ on a new game. I think it was the disparity between the manufacturing costs (and, thus purchase cost) of SNES/N64 media vs. PlayStation media that drove the prices down here (i.e., You want me to spend how much more for the same game?). While Nintendo tried to keep prices up during the N64 era, they quickly found they could not. If Sony had not had drastically (i.e., half to one-third) lower software prices (all the better to enter the market), I can imagine that we would definitely be paying $60+ today.

For those interested, the $72 game was Final Fantasy III (US), bought new, after finals one semester, at Biggs (are they even around anymore).

Re:No surprise here

[homer_ca]

Not exactly. They're eliminating analog NTSC broadcasts, but not all digital broadcasts will be HDTV. More importantly, not all TV sets will be HDTV. You can still put a digital ATSC tuner in a cheap low-res TV. I think you'll still see lots of those on the low end.

Re:No surprise here

[MindStalker]

The point is that Nintendo caters to the low-end market. The kind of people like me who still have their 1980's TVs and are just fine with them. A few people may have to get an analog to digital converter, though most people have cable or satallite by now which will do this for them.

Re:No surprise here

[GauteL]

"wouldn't have thought it'd be much because the retailer/game producers/distributers/etc would want their cut first."

You are making it sound like Sony is begging for scraps from game producers.

In fact, Sony requires a fairly hefty license (and royaltees) from game developers for them to be able to make games for the Playstation platform.

The game developers are basically buying a target market from Sony. This was the way Sony made shitloads of money from PS1 and PS2.

It all depends on who wins the console wars. Most likely only one of Microsoft or Sony will earn any money on their next-gen consoles, while Nintendo might earn enough from their little niché.

Interesting anyway. Microsoft went for good specs that they could release early. Sony went for great specs that will come out late.

Personally I'm waiting until the pricewar starts before deciding, but if Microsoft get a bigger install base, then they will most likely get the best games.

Re:No surprise here

[homer_ca]

Another thing I noticed about pricing is that games hit the $20 discount rack pretty quickly compared to the SNES/N64 days, maybe a year for the less popular titles and two years for the more popular ones.

Re:No surprise here

[Phudman]

I guess that in the year 2010 most TV sets in homes will be cheap digital sets that barely do anything above 480p very well. The high def big screens will always be out of the price range of most people.

Re:No surprise here

[Ewan]

It depends on the manufacturer and the deal they have with the publisher, but it's something like $7-10 per disc sold.

Ewan

Re:No surprise here

[Anonymous Coward]

For those keeping score the GC was and still is cheaper than the Xbox and PS2 so expect the same.

Re:No surprise here

[forgoil]

Look at how quickly Plasma/LCD has dropped in price. Soon LCD-TVs will significantly outsell CRTs and HDTV LCDs will be far more common than HDTV CRTs after all. Not to mention that the price for a projector has plumeth. As soon as the ad companies have decided that a new TV must have an "HDTV" sticker it will be hard to sell anything without it.

Besides, since 720p PS3/XBox 360 games will look so much nicer, I'm sure gamers will buy a new TV anyway. What I do wonder is, who will buy the more and more expensive games? (My guess is around $100 here in Sweden (800SEK)...)

Re:No surprise here

[Anonymous Coward]

sure...they "need" more to survive, but the options are most game companys can either afford only what they pay now, are a big EA company that will afford more, or will stay stuck with text instead of voice actors because they don't have the money (and would save money this way). It's a cost/benifit thing. voice actors are not required in videogames like actors are in movies. The people working in the studio actually are. text workes fine by me.

Re:No surprise here

[Anonymous Coward]

Yeah, and that's because 1)Not everyone has an HDTV (like they will most likely in a year an a half), 2)Playstation had lots and lots of prior fans. 3)HDTVs will continue to play standard definiton format stuff FOREVER.

Re:No surprise here

[yammosk]

Another thing I noticed about pricing is that games hit the $20 discount rack pretty quickly compared to the SNES/N64 days, maybe a year for the less popular titles and two years for the more popular ones.

The problem with using this as a measure of unpopularity, is that PS2 games go to a $20 price tag after they sell a certain amount. So, as a result the $20 price means that is WAS popular...

Re:No surprise here

[Belial6]

I'm with you. The line that the console manufacturers loose money on each sale is not likely. It amazes me how many people can accept the "creative accounting" done by the MPAA and RIAA to rationalize the price/profit in the movie and music industry, but don't believe that the same goes on in the console industry.

Really, I understand that the music and gaming parts of Sony are different divisions. But, to think that the Music division of Sony uses smoke and mirrors in their accounting, but the console division is giving us the staight scoop, seems kind of silly.

Re:No surprise here

[robertjw]

I guess that in the year 2010 most TV sets in homes will be cheap digital sets that barely do anything above 480p very well. The high def big screens will always be out of the price range of most people.

Just went to Best Buy's website. I can buy a 27" HDTV thats 1080i capable for under $400. Until recently a plain old 27" analog CRT would cost about that. HDTVs are already in the affordable price range for most people. As there is more market demand for them the price will drop.

Re:No surprise here

[PhoenixFlare]

They won't succeed in the US unless they get HDTV support on the Revolution, which isn't in the cards.

Why? Nothing even close to a majority of US homes have televisons capable of displaying high-def content yet - A quick Google search shows figures for HDTV penetration around 4-9%, for example. By the time HDTV support is a majority, it'll be time for the next generation of consoles anyway.

People have been predicting Nintendo's doom for years now, but they're still around and actually quite profitable. I seriously doubt lack of HDTV support is going to be the issue that changes that trend.

Re:No surprise here

[robertjw]

Usually all it takes is for them to watch a movie or football game at a friends house on a big wide-screen set to get them saying, "I think I should start saving up for one of those."

Exactly. Not only that, but right now part of the problem is the limited amount of content available in HD. As more brodcasters, satellites and cable companys offer HD feeds the demand for the HDTVs will go up. The American consumer market can change very quickly, I agree that Nintendo may have problems if they don't add HD support.

Re:No surprise here

[TheRaven64]

Note also the international market. In the UK, no one is broadcasting HD content (although I believe Sky - the primary satellite provider - plan to soon, and so the cable companies probably will eventually too). The primary reason is that PAL sucks slightly less than NTSC, and so we do not have the same motivation to upgrade. Digital TV is more or less the norm over here - cable and satellite are all digital and over-the-air digital is very cheap (around £30 for a set top box, no subscriptions) these days.

I'm not that excited about HDTV. I tend not to watch TV live - if a show's good I catch it on a rented DVD without adverts - and I watch DVDs on a projector. The quality is not perfect, but I have to look closely to see pixelation, and so it falls into the category of `good enough'.

Re:No surprise here

[topper24hours]

Well... from what I've heard NONE of the next gen consoles will support 1080 with any kind of decent framerate. 720 is the max for both PS3 and XBOX 360 to keep it playable. I suppose they'll play video at that res. At any rate, I agree that it isn't THAT big of an issue. I believe that the parent should have stated: "I BELIEVE that if Nintendo can add HD support at the same price they will do better" rather than "It will never succeed without...". It probably would have been received better.

Re:No surprise here

[GreyWolf3000]

and the fact that PS2 fucking blows chunks from a technological standpoint vs the Xbox and the GC provides a good example of how much of a red herring HDTV is.

That is not a fact. The PS2 has a completely different architecture than the Xbox. Completely. Hint: you can't just compare mhz.

Re:No surprise here

[FunkSoulBrother]

Yeah, but its been my observation that people will then go in and see a 27" CRT for $199 and walk out with that. Or if they really have $400 to blow, they'll walk out with a massive 36" CRT instead.

Re:No surprise here

[KarmaMB84]

Most Xbox 360 games won't be doing 1080p because even it won't have the horse power to do it and still produce the "mind blowing" graphics they're promising.

Re:No surprise here

[SirSlud]

No shit. Really?! /end sarcasm

I'd have to say you're out of your mind if you subjectively compare the capabilities of each platform and put the PS2 in with the Xbox and GC. This isn't even a point worth arguing; the PS2 came out long before GC and XBox, and on 90% of all games (obviously, the ones that come out on all three, even if it was made for PS2 then ported to GC/Xbox, make it the clearest from an apples to apples standpoint), there is no comparison.

Your point is taken, and true, but my point still stands; the best PS2 games do not stand up to the best Xbox or GC games. I own a PS2 and a GC, and have played many a same game on both, and I think only somebody whos looking for an argument would claim that the PS2 stands up to everything the GC and XBox do.

The PS2 is a dandy platform, tons of fun games, and is capable of some very sweet looking games (God of War, I'm looking at you) but there's a reason why draw distance was doubled or tripled, textures made sharper, models made in higher poly counts in the Xbox version of GTA: SA.

Re:No surprise here

[BewireNomali]

it isn't about comparing architectures. it's about the visual quality of games and gameplay.

I've played games on all three consoles and the PS2 by far is the worst visual experience.

When playing games on a PS2, I actually notice that its games are inferior visually. It's a case of not knowing what you're missing until it's gone. The X-Box far exceeds the other two.

it's pretty much a given that any game on both the xbox and playstation 2 will look much better and play much smoother on the x-box. that said, the PS2's library is awesome.

Re:No surprise here

[generic-man]

Phantasy Star IV for the Genesis and The Simpsons: Bart vs. the Space Mutants both sold for $80+ when they came out. Neither one sold in massive quantities though.

Re:No surprise here

[Breakfast Pants]

As long as Nintendo has widescreen support requirement for every title like Microsoft and Sony are doing I won't care. The fact is that Microsoft and Sony will be running HDTV modes with less anti-aliasing than they will on the lower res 480p widescreen mode inorder to keep performance up to par and make maximum use of the hardware in both modes, so really their HDTV modes won't look any better than their 480p widescreen--except in FMV clips (who cares).

Re:No surprise here

[SirSlud]

I'd just like to add to this; the GC is much closer to to what the XBox can do than the PS2 is to the GC.

I own a GC, and it makes the PS2 look like a gameboy in most cases. The improvement from GC to XBox is marginal, in my opinion, although the library is obviously radically different. I'm just going by some of the cross platform games here, like Burnout 2 (fuck them for not releasing 3 and Revenge on GC), Soul Calibur, etc.

Re:No surprise here

[cayenne8]

"I believe Sony just charges a licensing fee and provides an SDK to developers that want to create games. The nice thing about this model is Sony gets paid regardless of the success of the game."

Ok...if that is the way it works...then, I don't understand something.

A playstation is just a piece of hardware, right? A computer bascially? Now....in light of that analogy, I can write any program/game I want for the PC...and I don't have to license or pay a cent to the PC manufacturer...or to the OS on the computer.

What keeps me from writing a game to play on the Sony PS...and not paying them a cent? What is the difference here...you're basically just writing code to execute on a piece of hardware, correct?

Re:No surprise here

[spectre_240sx]

I use a Mach 3 turbo and I won't switch to anything else. I tried some of those cheezy plastic razors and they did nothing but chew up my face. Gillette has won the market via superior product here, not by "vendor lock-in."

Re:No surprise here

[KarmaMB84]

Unlike Microsoft, Nintendo still made profit on their current generation console and will probably make profit on the next.

Re:No surprise here

[Anonymous Coward]

Sigh.. everytime you guys say "CRT", I think monitors, and get all anxious about a 36inch CRT monitor for 400 dollars.

Then I Realise you guys are talking about Television, and those make crappy computer screens.

Re:No surprise here

[nitehorse]

An op-ed piece written by the owner of a video-game store holds a little bit of weight in my book.

Re:No surprise here

[AuMatar]

So losing $200/unit and gaining $10/game- they need to seel 20 games/unit to make it up. That seems like a long repayment period to me.

Re:No surprise here

[eSavior]

>>>I'm sure gamers will buy a new TV anyway.<<<

I wish I lived in the "We all have large amounts of disposable cash, and can burn 2kUSD to get better quality tv so the games for my 300USD games system I just bought look better" universe. >_>

Re:No surprise here

[AuMatar]

No, most people get their data from cable, not over the air. I'd suspect most people who do use OTA will either just watch less TV (they can't be watching much to begin with) or get cable and pick up some extra channels at the same time.

HDTV is a solution looking for a problem. Noone was really upset at TV resolution before. Its pretty much dead in the market. The only reason it *might* get market penetration at all is that the government is mandating it. Even at that it'll be slow- people may pick up an HD capable set when their old TV dies, but there's not going to be a rush to run out and get HD.

Re:No surprise here

[BewireNomali]

i agree with you about the GC. It's an interesting thing about marketing though. I hate to say that I fall victim to marketing ploys, but I fell victim to this one.

I assumed that the GC would be the worst of the three. Much of that assumption came from aesthetics and design. The GC looks and feels like a toy that should be tucked into a child's cubbyhole. Playing games on it proved me wrong as both the graphics and gameplay exceeded my expectations and the capabilities of the much better looking and marketed PS2.

marketing is so important man. I think Nintendo needs a ramped up marketing strategy. I think being the console with the least penetration works in its favor this time around because the audience is always looking for something new. The revolution can be that new thing.

Re:No surprise here

[Golias]

I wasn't saying all that to bash your favorite razor. I was just point out that the "lose on the razor, make it back on the blades" model doesn't really work.

The Mach 3 lines of razors actually became a lot more popular when they jacked up the cost of the handle and cut the price of the blade carts. When you give away the handle, it creates the perception in people's minds that the handle must not be worth all that much, and since your competition is also giving away handles, it actually makes it easier for people to switch back and forth between brands, resulting in very much the opposite of vendor lock-in. Customers end up going with the better blade (if they are picky) or the cheaper one (if they are not.)

Since a lot of guys are not all that picky about their razors and choose on price, blade prices are quickly driven down to commodity levels, and suddenly you can't afford to lose money on the handle anymore.

Re:No surprise here

[Anonymous Coward]

I actually suspect that the reason Nintendo is not going to be supporting HDTV (whether this means that the hardware won't support HDTV or that Nintendo software won't support HDTV) is that by forcing support of HDTV you may actually be making your games look worse on most (lower end) TVs.

Up until now, most of the features that have been implemented on programmable shaders (in particular on the XBox) have been vertex shading programs. This means that the 'hit' your performance takes from implementing this feature is Geometry dependant; that is the vertex shader is ran once per vertex on a particular piece of geometry. In this generation there will be a far larger focus on pixel shader effects (BDRF, Sub-Surface Scattering, per-pixel lighting), anisotropic filtering, and on Anti-Aliasing; all features that are resolution dependent.

By supporting higher resolutions Developers will (probably) have to sacrifice some of the pixel dependant feature; and (in most cases) will probably drop these features across all resolutions. This means that the average slob (no offence) who owns a 480i or 480p display will be able to notice that either the images still have bad jaggies (from no AA), muddy textures (from no AF), or less advanced materials or lighting (from worse Pixel Shaders) from the decision to support 1080i or (if the developer is really dumb) 1080p.

On a side note: I personally think that it is foolish for Nintendo not to at least support 720p as a 'olive branch' to the handful of technophiles that may be put off by 480i or 480p; at the same time, I'm not sure which is the worse decision, not supporting 720p or forcing the support of 1080i. In general, I think that HDTV will become much like the 'surround sound' debate that occured between the PS2, XBox and Gamecube; tons of people complained on the internet that Nintendo and Sony didn't support Dolby DTS but in the grand scheme of things the inclusion of surround sound capabilities probably didn't sway too many potential purchacers.

Re:No surprise here

[Dan Ost]

You try marketting a game for a console when you're not allowed to mention
what console it runs on in advertisements and on the packaging without
getting an injunction for trademark violation.

Re:No surprise here

[Kick the Donkey]

Keep in mind, though, that some games are developed by Sony themselves. Also, Sony will make some money off of accessories (extra controllers, and the like).

Does anyone know if Sony plans on introducing an XBox-live-like service?

Re:No surprise here

[AuMatar]

My "people I know" data set shows the exact opposite. No one is interested in HDTV, with a large minority laughing at people who wasted money on it. And a large subset of people I know is gamers, being one myself. With the slow growth of HDTV sales, I don't see it as a major problem for Nintendo this generation. Maybe next generation, but not this.

Re:No surprise here

[Antimatter3009]

Although I wouldn't say the PS2 "blows chunks" compared to the other two, you are right that is less powerful. However, I don't see how this relates to HDTV. I suppose you could say since the PS2 sold the best and has the least quality that users don't care about visual quality, and that may be true, but I don't think that will hold up in the next generation. Maybe HDTV won't be the deciding factor in a console purchase, but it is certain to factor in.

Consider that HDTV's are becoming more widespread already, and that user base will only increase with time (even spreading over non home theater people, for example my family recently). If someone sees a system that does not take advantage their shiny new HDTV, they are going to be less inclined to buy it. Also remember that a lot of people are going to see bigger numbers on one console than another and assume that is the best one to buy despite knowing nothing about what those numbers mean.

In any case, there are groups of people that will buy each system and I would think that this generation of consoles' market share will pretty much mirror that of the previous generation, although I could see Microsoft and Sony a little more even if only because XBox360 will be out first.

Re:No surprise here

[AuMatar]

Bleh, I read the price wrong- a $100/unit loss, makingit 10 games/unit. A lot more reasonable, probably 6 mo-2 years for hardcore-casual gamers.

Re:No surprise here

[JebusIsLord]

True, but don't forget: The first buyers will be enthusiasts who buy more games, and have a longer console lifespan than those why buy years later. Also, the first bunch of consoles might indeed never be profitable for the company, but they need to establish a decent user base for profit later. 3 years from now the PS3 will cost around $80 to manufacture, and will sell for $100 or so (if history is any indication), so THOSE customers will be the cash cows.

Re:No surprise here

[Anonymous Coward]

I believe it is actually summer 2006 when Sky'll lauch HD, which I wouldn't call soon, but you might ;)

Re:No surprise here

[Guppy06]

If everybody wants games on DTV, then Nintendo's component video cables, needed to play GCN games in 480p, would have sold a lot better than they have. They've even removed the digital video out from GCNs with little negative response from consumers.

If DTV were that important, the GCN, with its support for progressive scan, would be seriously trouncing the PS2. The only progressive support you see on the PS2 is on DVD playback, and that's only on the newer units. And yet the market seems content in paying (more money!) for the inferior 480i.

It's a revolution. It's supposed to reach to the common man. The common man doesn't have the latest and greatest in their a/v setup, so there's no reason for the Revolution to cater to the elite(ist). If anything, the people who insist on HDTV and such are the people who Nintendo are actually trying to distance themselves from in an effort to reach a broader audience, the very people some of us feel are causing the games industry to stagnate the way it is.

Only the bourgeois elite care about real-time rendered forearm hair and the picture resolution to see it, and the hidebound electronics industry aristocracy are doing nothing for the gaming proletariat by offering it. The masses need better games! It is time for the people to rise up and demand a gaming industry again, television and set-top box manufacturers be damned!

Video games got started not in living rooms with big-screen TVs, stereo systems, comfortable sofas and easy access to the kitchen, but in cold, unfinished basements with hand-me-down televisions that required "warming up," maybe a boom-box to route sound out of for stereo, and no furniture save for a washer and dryer. If the Revolution is to have any shot at reinventing gaming, it will have to be able to return to gaming's roots to start. There is no HDTV down there.

(On a slightly more serious note, what the heck is HDTV supposed to do for gaming?)

Re:No surprise here

[apoc06]

the article that the second link references: http://www.pro-g.co.uk/news/nid/985/b1205649dd5bee c5c984bb76d506d8bc mentions a sony based network service called "playstation network" [boring i know...], what bothers me is how lax the premise of their network service sounds. im not excited about it at all.

im hoping that its all along the lines of their new going underground ideology. not talking it up; and just springing it on us. xbox live is nice, but it could stand to be better. alot better! and i hope sony realizes that its not to late to at the very least play catchup.

honestly, i think they have a grand plan in mind. why would they pile on the ethernet jacks otherwise?

Re:No surprise here

[apoc06]

or better yet. try marketing a cd that wont play in any consoles due to the fact that you dont have any of the special encryption keys that sony licenses out. thats what the license is for.

Re:No surprise here

[SmokeBogey]

I think the problem lies in getting that code to: a)Run on the hardware without Sony's SDK/blessing. b)get distributed after going gold so that people could buy it and run it on said hardware. Without Sony, you can't even put a PS logo (or any of their copyrights/trademarks/servicemarks/blahblahblah) on your software. If you can't advertise/sell it, it kind of defeats the purpose of writing it. Sony is smart enough to make sure all roads to their gigantic installed base runs squarely through them.

Re:No surprise here

[Afrosheen]

Consider the super high cost of entry for gaming companies these days, with development hardware and hiring highly skilled CG artists, etc. and it's not hard to see why there aren't any new, tiny game houses cranking out the hits.

Development costs are so high now that it's becoming rare to see new game franchises. You only see rehash after rehash (like the Madden series) because they're a safe bet.

Garage development on the latest hardware is simply out of the question. You saw a big resurgence in video games in the 80's due to Nintendo pushing an affordable piece of hardware, but that was only half the puzzle. The other half was small development houses being able to afford to risk an investment on a handful of titles hoping one or two would become a breakout hit. Square/Enix started out like this along with many others.

These days the costs to produce the latest megalomonster shooter is astronomical. Games can cost millions, if not tens of millions, to develop, market and ship. EA has been able to stay in the game by flooding the market with braindead sequels and acting as a release agent for big titles like Battlefield 2. That and their korean-animation-shop style of working their employees to death.

Re:No surprise here

[lowrydr310]

Let's not forget about people who will buy a completly different console to replace their old one just because the new ones are smaller/thinner.

Seriously, my 14 year old cousin got a new 'slim' PS2 even though his old one was working just fine.

Re:No surprise here

[hunterx11]

For the Xbox, at least, it will only run games signed by Microsoft's key unless the box is modded. Also, the Xbox can tell between burned and pressed media. So potentially, you would have to develop something without access to the API, and without being able to test it until you press a final product. Oh, and the final product won't run. Even if it did, that's still more expensive than buying the SDK.

Re:No surprise here

[drsquare]

Usually all it takes is for them to watch a movie or football game at a friends house on a big wide-screen set to get them saying, "I think I should start saving up for one of those."

If you have to save up for something like that, then perhaps a fancy digital TV isn't something you should be spending your money on.

As for turning off the analogue signal, I think it's disgusting that the government is mandating something in order to cost us all money for something we don't want or need, just to make money for big business. That's what you get with a system where the government is in the pockets of the corporations.

Re:No surprise here

[NanoGator]

"That's actually not really true."

I wouldn't look at Acts of Gord for 'truth'. Not only does he mention a blurb in a stock report that he didn't even quote, but he draws an extreme conclusion from it.

Here are the two basic problems I have with his claim:

1.) It's a quarterly stock report. Those are MEANT to sound compelling. Since we don't even have the exact quote from the report, we have no way of knowing what type of math Sony was using to impress their stockholders. Also, it's a quarterly report. For all we know, Sony spent all the money making the machines the previous quarter.

2.) Lots of other quite reputable news sources have reported the first run of PS2s being sold at a loss. Sony has never publically disputed this.

I can't say that Gord is wrong about this, but I wouldn't just immediately jump to the conclusion that his interpretation is correct. Not only are his claims dubious, but he doesn't even cite anything of interest to prove his claim. In simpler terms: My bullshit meter beeps wildly when I read that article. It didn't help when he taunted 'fanboys' of other systems.

Re:No surprise here

[prockcore]

don't have 1080i, not even 720p, and neither do most of the people I know.

720p is higher res than 1080i. So you should say "I don't have 720p, not even 1080i".

Re:No surprise here

[pommiekiwifruit]

Nintendo could just do what they did with the 8 bit NES and put a huge empty plastic box around the console so that it appeals to Americans :-)

Re:No surprise here

[Anonymous Coward]

One thing to remember is that, although Plasma, LCD, widescreen CRTs and Projection TVs are dropping in price and claim 'HDTV compatible', there are almost no Plasma, LCD, CRT or Projection TVs that actually display at a HDTV (1080i) resolution. The vast majority of Plasma and LCD TVs have a EDTV naitive resolution (slightly better than 480p) and are sold as being '1080i compatible'; with most CRT and Projection TVs either being slightly less than or equal to 720p.

What does this really mean?

It means that regardless of whether or not Nintendo, Microsoft or Sony support 1080i (or 1080p) the average person who (spent way to much money and did way too little research) bought a 'HD Compatible TV' will not notice the difference.

Don't get me wrong, true HDTVs will become most households Big-Ticket purchace in the next few years (as in wealthy house holds in 2005-2006, more middle class house holds in 2006-2008 and poorer houses in 2008+) but for the most part this will not be a major issue this generation.

On a bit of a tangent, I honestly wonder how many gaming systems are actually hooked up to the 'Nice' TV in a house. Knowing Slashdot users I suspect that most of them have their PS2/Gamecube/XBox in their living room, but I'm not sure if this is true in the majority of houses. As a child and a teen I remembered that my mother NEVER allowed on of these systems in the living room, and as an adult I have noticed that most of my friends that are married (or living with a woman) usually have their gaming systems in an adjacent room on a worse TV.

Re:No surprise here

[Babbster]

Have you priced HDTVs recently? While it's true that full-resolution HDTVs cost a bit (starting in around the $800 range for widescreen 720p LCDs), televisions capable of accepting HDTV signals are available for far less than $1,000.

All you have to do is take a quick trip to the websites of Best Buy, Circuit City, etc., and you'll see that there are MANY options for more affordable HD-compatible TVs. Just a quick bounce around and I found three 27" 4:3 models at $350-450, as well as a 26" 16:9 model at about $480. If things keep going the same direction, those types of sets will probably bottom out at about $250 within the next two years, at least three to four years before another generation of game consoles could hit the market.

Obviously, you'll pay more for bigger screens and higher resolutions but that's obvious. Low-end HDTVs, though, are already "affordable" (right around the same price as the price projection for PS3) and they'll only become more so.

Re:No surprise here

[Cornflake917]

1)
Even if everyone will own an HDTV in 1.5 years (which should be more like 10-15 years but whatever), are those extra pixels going to be the ONLY deciding factor for people to buy the system? Hell no. Is Nintendo taking a risk by not providing HDTV? Yes, but are they gonna fail in the US? We barely even know anything about the damn system yet. Saying it's gonna fail in the US is like judging a book by it's cover without even seeing the cover.

2)
What does prior fans have to do with this? Microsoft has tons of fans(employees) and Nintendo has been around forever.

3)
The fact that HDTV's can still show standard definition is also another reason why it's foolish to say Nintendo won't succeed.

Re:No surprise here

[nolife]

Like Xbox live? Like what features? I guess it has some features that are somewhat useful for some people but I am online to PLAY online, not to track buddies and message specific people all the time. I have no problem with the current PS2 online offerings and very few games charge a fee to play online.

Re:No surprise here

[Anonymous Coward]

GC was close behind the Xbox for a while (at one point surpassing it). People have this idea that PS2 and Xbox sat at the top of this generation while GC had a tiny market share. Not true. PS2 had a huge market share and Xbox/GC were below. Hell, Nintendo could move into 2nd place this generation and hopefully MS will give up. But I highly doubt we will see a close race between the 360 and PS3. PS3 just needs a tiny bit of hype and people will save their money for it.

Re:No surprise here

[GoldMace]

Why wouldn't you be allowed to do this? Companys often mention other companies names without their permission. Or did Miller actually get Budweiser's permission to say Bud Light and use their trademarks in their recent ad campaign?

Re:No surprise here

[SIGALRM]

Carmack, there is no reason to post AC here.

Re:No surprise here

[robertjw]

What keeps me from writing a game to play on the Sony PS...and not paying them a cent? What is the difference here...you're basically just writing code to execute on a piece of hardware, correct?

Two things mostly. First, you need some kind of SDK to write software for a console unless you want to reverse engineer the whole thing. The difficulty of this is compounded if you want to develop a game prior to the console's release. If big companies like EA didn't get the development kit from Sony before the console is released to the public they would not have a game ready to run on the console's release date.

Second, Sony would probably sue you if you advertised it as Playstation software, used the trademarks, etc...

Re:No surprise here

[Anonymous Coward]

Draw distance doubled or tripled in GTA:SA Xbox? I think you're imagining things here! I've played all three versions and the xbox version is hardly any different than the PS2, aside from 480P support which looks terrible due to insane amounts of aliasing. The PC version is the only one that actually looks substantially superior to the other two (with truely several times the view distance).

Re:No surprise here

[spectre_240sx]

Hmm, makes a bit more sense now with that extra explaination. I really don't understand how they make any more money on the handles, though. I've had mine for... 3 years or so I think and I'm not about to buy a new one anytime soon.

Re:No surprise here

[macshome]

Like the XBox, the GC does 640p HD just fine. You simply need to order the composite cable from Nintendo and pop in a progressive scan game.

Re:No surprise here

[bleaknik]

I love my Mach 3 Razor. Its elegant, and it gives me a nice, smooth shave.

And then there's the Quatro. Got one of those when I was on a road trip (left my Mach 3 at home), and it seems to just cut me up.

... Wait a minute--Weren't we talking video games a few minutes ago?

Yeah, so Ninty makes money on their consoles and the blades. I mean games.

Sony and Microsoft seem to be losing quite a bit of money on the front end... It seems Okham's Razor is being violated with this business model. /shrug.

I wonder... where does Okham make his money...

Re:No surprise here

[jimi the hippie]

I got my Mach 3 handle in the mail. They only gave me one blade, but I liked it so much that I went out and bought more. And NO they are not cheaper than disposables (I guess that depends on how many uses you get out of a disposable razor, tho)

Re:No surprise here

[Rallion]

I don't know about market saturation. Myabe if people were smarter. Heh. But I really have to agree on the profit side. While I don't expectto see them on top in sales, I don't expect to see them as far behind as the GameCube is, and as far as I can tell the GameCube is already a fairly close second in total profitability.

Re:No surprise here

[Golias]

If you have to save up for something like that, then perhaps a fancy digital TV isn't something you should be spending your money on.

More accurately, many people I know have to save up because they are doing more important things with their money. If you have a house and a couple of kids, you don't just whip out the VISA when you want a new toy... you budget for it, with things like furnishing a second kid bedroom and putting away for college funds coming way ahead of it on the priority list.

As for turning off the analogue signal, I think it's disgusting that the government is mandating something in order to cost us all money for something we don't want or need, just to make money for big business.

Okay, let's sell off the bandwidth to the highest bidder to do with it whatever they like, and charge them a special "broadcast tax" to fund an enforcement agency which protects those new property rights. It's a wonderful libertarian dream, but I'm willing to bet that a lot of people won't like what would be done with all that bandwidth if the government wasn't regulating it. It's one of those trade-offs which most people have come around to grudgingly accept.

Re:No surprise here

[Nurf]

So losing $200/unit and gaining $10/game- they need to seel 20 games/unit to make it up. That seems like a long repayment period to me.

I think what everyone forgets is that they don't take a loss on the hardware forever. Eventually, the PS3 will consist of maybe 2 chips and some peripherals and a box. The PS2 has been in this place for a while.

It's a corollary of Moore's Law that the cost of a logic gate halves every 18 months, and the life of a console seems to be around 5 years. By the time Sony could bring the price of their console down, there are so many games and such a following for the console that they don't have to.

Re:No surprise here

[coopex]

Well, I mean, it's not like either company has trademarked "Frosty Piss", so it really wou... Oh, I see what you meant.

Re:No surprise here

[coopex]

Why settle for a puny Mach 3, when you could have a Mach 13

I too have a Mach 3, and I too am loving it.

Re:No surprise here

[Tim Browse]

I'm not sure of the current details, but it used to be that there were two costs to developing a game for, e.g. Sony:

• Cost of devkits - e.g. a PS2 devkit used to cost $30,000 at the start (and you didn't even own it)
• Sony get a fee per disc sold. For PS1 it was something like $8 for a new game that was released at the usual RRP (e.g. $40-ish).

It might even be a fee per disc pressed by Sony, rather than per disc sold. For example, Nintendo had a similar deal (at one time; possibly not anymore) where you had to pay for the cartridges up front (all of them), and a minimum run for a territory was 10,000. That meant that for smaller games in some territories it was a bit of a risk as to whether you'd actually break even on the Nintendo cartridge costs.

I think there's a similar arrangement for Microsoft/Xbox (the fee per disc, not the minimum run per territory thing). You can also get revenue streams from Xbox Live but I think most games just use the standard fixed fee services (i.e. Live is just a selling point for the game, not a profit centre).

In summary, the last time I heard (PS2/Xbox/GC), you basically pay a fee to the console manufacturer for each item they make for you. (Because of course only the console manufacturer is allowed to make discs that run on unmodded consoles.) The fee probably depends on if you're someone like Bungie or Naughty Dog, or Dave's BackRoom Game Developer.

Also remember that retail takes a huge cut too - it's not uncommon for half the retail price of a game to go straight to the retailer. I was involved in pricing discussions for a PC game a couple of years ago in the UK, and for a £30 game, I think the publisher ended up getting about £12.50 from each sale. Then the developer gets their development advance paid off by a cut of that (which usually means they never make a profit, so remain at the mercy of publishers).

Re:No surprise here

[sehryan]

"(On a slightly more serious note, what the heck is HDTV supposed to do for gaming?)"

More prerenders cutscenes, less actual playing.

Re:No surprise here

[noyren]

"First, you need some kind of SDK to write software for a console..."

Hasn't sony said that PS3 will run linux? And they've also said a lot of times that it's a "computer" and not a gaming machine.

Re:No surprise here

[aztracker1]

Guess nobody remembers how much new Atari 2600 and 7800 games were at some point, I remember looking in a Sears catalog about a year after the 2600 came out, and some games were over $100...

Re:No surprise here

[DeadScreenSky]

It really shouldn't. Videogame store owners are often poorly or misinformed. Go talk to one sometime and see for yourself.

Re:No surprise here

[robertjw]

Hasn't sony said that PS3 will run linux? And they've also said a lot of times that it's a "computer" and not a gaming machine.

Perhaps, haven't followed that too closely, but the hardware will be proprietary anyway. I'm sure they won't release the drivers to the general public. Games probably COULD be developed without the SDK, but no pre-release development could be done, and anyone wanting to make money off of a game is better off buying the license and SDK both in terms of legality and quality of product.

Re:No surprise here

[mink]

With the traditional (PSX and PS2) build quality on consoles I expect at least a third of later hardware sales to garner no aditional software sales.

PS3 for $399

[Anonymous Coward]

Unless of course you wait like 3 months until it is $299.

Re:PS3 for $399

[MyLongNickName]

Yup. That's what I like about electronics... the "First on the Block" tax. Perfectly voluntary. If it is important enough for you to be the first to have it, then you can pay. If not, then you don't.

It helps to subsidize electronics for the masses without a convoluted gov't based needs program.

Re:PS3 for $399

[Anonymous Coward]

I'm still waiting for the PS2 to get to $99.

Re:PS3 for $399

[MyLongNickName]

Ebay.

Re:PS3 for $399

[dpilot]

OK, let's play a simplified math game.

Let's pretend we have a game console, and it's planned competitive lifetime is 4 years. It introduces at $400, and a year later it's available for $300. But really, $400 for a 4 year lifetime means you're "writing down" $100/year. In that case, the early-adopter and the wait-for-the-price-to-drop users have gotten equal value out of the consoles. In fact, the early-adopter may have gotten better value, because his first game is being written down over 4 years instead of 3, so it costs less per year.

I know it's overly simplified, but there is one point that lasts... The early adopter does fork out the big bux, but he also gets that early usage out of the console, and perhaps more usage than the price waiter. The latter argument has holes too, in that the early adopter probably adopts the next generation early as well, so both get about the same amount of usage. Still, you buy it to use it, and if you buy early, you get to use early. The idea model, from a cost basis, would be to be an early adopter for every other generation, either skipping the in-between generations or getting them really cheap on eBay.

But if you're strictly on a cost basis, skip the game consoles entirely, and take up real-world activities that also improve your fitness.

Re:PS3 for $399

[xstonedogx]

That only makes sense if the unit self destructs at the end of that 4 years. Us waiters are perfectly happy to play the unit long after the end of its competitive lifetime. By the time the "price waiters" by the unit, there are more titles, tons of reviews, and everything - games included - costs less money.

The only positive the early adopter gains is the bragging rights of playing it while it's new and exciting.

The negatives include higher cost, a possible lack of titles, possible hardware/software failure, and competition in finding the new console. If any of those other negatives co-exist with the higher cost, he may in fact be getting LESS value over those 4 years than someone who buys it a year later, even if they pay the same amount per year.

For example, if you pay $100/yr, but there are only 20 titles out that first year of which you like 1 or 2, are you really getting the same $100 worth of use out of it?

Re:PS3 for $399

[gl4ss]

yep.

and going underground? is that a surprise WHEN THEY HAVE NO REAL SILICON, NO REAL PRODUCT TO SHOW??

(now you might ask what were the presentations done on then... probably pc's)

Re:PS3 for $399

[Anonymous Coward]

But if you're strictly on a cost basis, skip the game consoles entirely, and take up real-world activities that also improve your fitness.

Mom?!?! What are you doing posting to slashdot?!? I said I'd go out and play with my "friends" in an hour, OK?!?!

Re:PS3 for $399

[JahToasted]

Also, the guy who waited a year when the 3rd Generation comes out will also wait a year after the 4th generation comes out. So he will be using the console for 4 years too (and will probably get the games cheaper on the 4th year).

Re:PS3 for $399

[Anonymous Coward]

And if you buy an XBox 360, 6 months earlier yet, for $100 less...

Re:PS3 for $399

[jandrese]

The other advantage is that the late adopter allows the thousands of early adopters to do extended beta testing for them and let the company fix early wear items and whatnot. It took Sony a few generations to get decent spindle motors in the PS2 for instance.

Re:PS3 for $399

[Flunitrazepam]

My problem is that first gen titles for a "next gen" system are generally not very good, and I don't want to play extra for the chance to play titles that are mainly focused on eye candy rather than playability.

Look how long it took for Donkey Kong Country to come out on the SNES... it just takes developers a long time to learn to exploit every available resource in a new arch.

Re:PS3 for $399

[Zarian]

No

If someone doesn't care about getting the new stuff when it's new, then to them, there is no life of the console.

Does the fun factor of a game change because it's purchased and played a year after the game came out?

You are forgetting that game prices also drop. And hell if I can get an Xbox for $99 and 20 games for $10 each, that's $300 I just spent and I have 20 games to play and have fun with.

If I purchased the Xbox when it first came out at $300 and each game when they first came out at $50 a game thats $1300 total!

Re:PS3 for $399

[brkello]

Why make something so simplified that it is useless. The early adopter pays more money, but they also are taking more of a risk. The first revs of consoles generally have more bugs and have more critical failures than later revs. And your point really doesn't make sense. It's not like a new console comes out and then you ditch the old one. You can just put off buying the newest console and get that extra year out of the old one. Your justifications are just to weak to be taken seriously.

Re:PS3 for $399

[VoiceOfRaisin]

your example doesnt work at all. say systems come out every 4 years. 2000 2004 2008. the early adopter buys them the same years they come out. the waiting guy buys them a year after. so in 2001, 2005, 2009. notice anything? theres the same 4 years of play in each case, not 3. your argument assumes the waiter no longer becomes a waiter and is an early adopter the next round making his 4 years into 3. bzzzt, try again.

Re:PS3 for $399

[Anonymous Coward]

I'm an early adopter most certainly. When it comes to consumer electronics- it's a disease and I'm hooked.

The reality with consoles is, though, early adoption hardly ever equals optimal usage. My PS2 and Xbox both weren't played obsessivley until way into their lifespans. Launch titles are just that.

That's why I love video cards for PC, hell all PC hardware- it's a different story, early adoption of bleeding edge almost always gives you tangible (though not proportional, but who cares!) benifits.

I think that in this next round of console wars the winner will be- the PC. This guy almost said it perfectly.

Re:PS3 for $399

[neafevoc]

I'm actually waiting for my first generation PS2 to crap out on me. It hasn't given me any problems, yet... which is strange because I keep hearing of these bad DVD drives. I must've had one of the few first generation PS2s that worked as it's supposed to :)

My PS1 is a different story. I went through three PS1s (1st, 2nd, 3rd generation). I'm on the 3rd and it totally craps out unless you flip it upside down... even then you'd be lucky. But it's okay since I do play my PS1 games on the PS2.

Funny. The other day I was playing Final Fantasy 6. I found it humorous that I'm playing a PS1 game originally created for SNES on my PS2. I can't wait to do that on a PS3 ;)

(I guess that's the same way for people to play old NES emulators on their PSP. Goes to show that no matter how bleeding edge your hardware is, it'll always come back down to the games.)

Re:PS3 for $399

[Anonymous Coward]

what marketing company do you work for? because you make NO sense.

guess what, My getting the console 1 year later for near 1/2 what you paid will save me huge amounts in the long run. My ps2 will not implode the saecond the PS3 comes out, and guess what, a year later I get to choose from a few "cheapie" games in the "best of bin" instead of being the tool that has to play the latest crap that is $75.95.

I get the better hardware, games cheaper and overall more fun because I get to buy MORE FUN for every dollar I spend.

I know, the way I think is evil and will cause the downfall of america.. but hey.

Re:PS3 for $399

[topper24hours]

20 titles out in a whole 12 month period? I hope this theoretical console doesn't rub off on my PS3!

Re:PS3 for $399

[rinkjustice]

You're "right on the money" dpilot. Seriously, launch titles are generally pretty good and have that "wow" factor early adopters live for. I dropped a bundle for the PS2 shortly after it was launched (and I was an early adopter for every other console since the SNES) and I've always got my money's worth.

Helps if you got kids into videogames too ;)

Re:PS3 for $399

[cronot]

Even funnier is playing SNES games on the PS2. Though it still leaves a lot to be desired (on sound, specially), and sadly is pretty much dead right now. I get a bitter taste in my mouth seeing a lot of emulators popping out for the PSP... is the PS2 so much of a hassle to program for?

Re:PS3 for $399

[dpilot]

Heck, we don't even HAVE a video console in the house, of any flavor.

Personally, I'm in the "go outside and play" camp of my last sentence. Someone else responded about that being a "Mom" thing, but Dads can have that attitude, too. I'm just waiting (and fearing) for the "virtual sandlot" football, baseball, and kick-the-can computer/console games.

Re:PS3 for $399

[Chris Brewer]

Yes but the wait-for-the-price-to-drop users aren't going to be the early-adopters for the next-gen console, so they'll still get their four years value out of it.

Re:PS3 for $399

[syousef]

. In that case, the early-adopter and the wait-for-the-price-to-drop users have gotten equal value out of the consoles.

No, because the early adopter will dump the console at the end of the 4 year period and move on to the next thing. The wait-for-the-price-to-drop users will keep their consoles LONGER. So while the early adopter pays $400 and gets 3-4 years use, the late adopter pays $300 and gets at least the same time out of it, if not more (perhaps 5-6 years before games start drying up or parts die).

The early adopter is paying for the latest and greatest. That's fine and good, but don't pretend he's getting better value out of it just to justify the behaviour of continually buying the next big thing. It's actually a very costly and dangerous habbit and if not kept in check a gadget addiction can be just as harmful as a gambling addiction.

Furthermore if you do have the disposable income but you're not constantly upgrading your gadgets you can afford to play with more different types of gadgets. This is the category I fall into. I like to keep my gadget buying in check so that it doesn't destroy my life, and I like to play with lots of different types of gadgets. Bought a mapping GPS this year for AUD297. If I'd done that a few years ago I'd be looking at much more.

I've never ever been happy after buying the latest and greatest because I know the value I've gotten for my money is awful, so I just plain don't do it anymore. If you wait you get the benefit of early adopter's experience, and reduced costs.

Re:PS3 for $399

[SetupWeasel]

And Sony has fixed most of the causes overheating, disc read errors, and general failure that often plague their early models.

On second thought, you might want to wait untill it drops to $250 for a better chance at solid manufacturing.

Re:PS3 for $399

[jandrese]

The PS2's main processor and memory are a little wimpy for emulation, and emulators can't make much use out of the Emotion Engine, so yeah, getting a good quality emulation out of it is probably pretty difficult.

Re:PS3 for $399

[cronot]

I can't say I fully agree. I'd say this emulator (SNES-sation) and others (PGen, MAME, etc.) just lack optimization. Heck, even the authors of these emulators said that.

The Emotion Engine is not a jackass CPU, but it ought to be enough for the more popular emulators. I know it's Apples vs. Oranges, but I see that the PS2 has a CPU performance roughly comparable to a 400~500Mhz Pentium 2 or 3, and that's around the mininum requeriments for most of the emulators out there (for the PC). I don't think the memory is a problem either: remember, those 32Mb the PS2 have doesn't have the overhead of an OS, and most of these emulators requirements on PC are around 64Mb or less, and as with computers you have to take the OS overhead in account, the amount of memory that an emulator really uses (with a game running) would rarely go beyond around 24Mb (maybe with the exception of MAME, for some recent games... and the MAME codebase is a monolithic mess anyway, so I guess he's the less feasible emulator for the PS2).

So, I don't think the problem is the hardware. I rather think the problem is either a) The API to program for the hardware, or the devkits available are just a bitch to use, or b) The emu authors are just lazy (or out of time, as they usually say). I used to believe in the latter, but lately I've been believing on the former - just look at all the emulators available for the PS2. Most of them haven't been updated for a long time, and on many the authors admit they lack proper optimization, and many others just released a single version and then dropped any further development. Many of those are open-source, still, no one takes over. Why? Is it really just lack of interest?

Then again, ScummVM will have a PS2 port... let's see when it is released...

Re:PS3 for $399

[SketcheeBoy]

I wouldn't say four years vs three. Those who bought the current generation late, will probably buy the next generation just as late and get the same out of time out of their console. They will be only paying $300yr for $75 per year for four years.

They'll have that larger library of games during their peak gaming period with that console. During the last year, they new console may be out but they'll be able to still tap into that game library. For that overlap period, games will see a price drop.

Not mention the ease of buying used games from the defectors who are selling their old games to get the new games and new console.

Ouch!

[DrMrLordX]

A $1 billion loss in the first year of production? That's going to hurt a lot, considering how much cash they had to dump to get Cell production ramped up this early. Their ability to mass-produce the processor was supposed to help them keep costs down and let them recoup the investment of building fabs in the first place. So much for the economy of scale.

Re:Ouch!

[Lally Singh]

Losing 1 billion in the first year of a console's introduction is nothing. MS Still loses more than that every year on the XBox.

Re:Ouch!

[MP3Chuck]

If Sony has their way, though, the Cell will find its way into other products. While the Cell's primary intent may have been for the PS3, I'm sure they'll look to more than make up lost dollars with other licensing and such.

Re:Ouch!

[GutBomb]

I doubt microsoft loses money on the xbox anymore. The parts inside the xbox and the cost of manufacturing are most likely even, or lower than the MSRP of the xbox.

Sony will not lose $494 on every PS3 sold forever. Eventually the prices for the parts that go into the PS3 will go downand before the end of PS3 production they will be able to make a profit.

Re:Ouch!

[leoc]

I'm not sure how Sony comes into play, but IBM made a deal with a company called Mercury for them to use the Cell. According to their press release, they will be using it to build stuff in "medical imaging, industrial inspection, aerospace and defense, seismic processing, and telecommunications".

Re:Ouch!

[Dtyst]

Sony is not really loosing money, they have a tight grip on game developers, If you want to make a game for a playstation, you first have to buy a developerskit and license, then when the game is finish you are not allowed to produce the actual disc yourself, sony manufactures them (for a heafty price I assume) so for every game on a playstation there a large amout going directly into sonys pockets, even if the game dosen't sell well (this applies to xbox & gamecube aswell of course). That's why they can afford losing on hardware and that's also why console games are more expensive than PC games.

Re:Ouch!

[MadEE]

They do. 1st Q 2005 the Games unit lost $154M,

Re:Ouch!

[LOTHAR, of the Hill]

This is normal for many electronics products. MFG costs are often high at launch time and drops as volumes increase and they get their mfg processes dialed in.

Sony can't charge according to mfg cost, but by what the market will bear. They have to pick a target price and make it work. What Sony absolutely can't do is change the price every six months as costs fluctuate. Customers get upset by that. That is something only commodity products get away with.

Re:Ouch!

[MindStalker]

Sony spent a lot of money to help IBM develop the Cell processor. You can be sure that they will receive a significant percentage of profits from its production. Unless they were just morons when they wrote up their contracts, which I doupt.

Re:Ouch!

[tepples]

The parts inside the xbox and the cost of manufacturing are most likely even, or lower than the MSRP of the xbox.

What about the cost of marketing? What about the cost of developer support?

Re:Ouch!

[Lally Singh]

Unlike Sony and Nintendo, MS doesn't control the parts in its box - MS isn't in the semiconductor business. The design is exactly the same as the original (unlike, say, the 1-chip PS2 that's currently sold), and the vendors have little motivation to lower prices on those parts. Money's still lost with every unit sold, even though some part prices have gone down.

The PS2 started making profit on each unit sold a few years ago. The GameCube was always sold at a profit.

Re:Ouch!

[Anonymous Coward]

Yeah but please remember that this is all based on supposition. Sony's finance model for this is one of the most secret parts of the project. Whatever Merril Lynch can infer is inaccurate at best, misleading at worst.

A billion dollars????

[technoextreme]

That seems a bit excessive for a product that will only be out a year. It seems risky for someone that is not entirely familiar with the video game industry. How much money did the PS2 lose when it first came out?

Re:A billion dollars????

[taskforce]

From TFA (first one):

During its first year of release, Sony Computer Entertainment suffered a loss of 51.1 billion yen ($458 million), but it recovered the next year with a profit of 82.9 billion yen ($759 million), followed by 112.6 billion yen ($1.03 billion) the year after.

Re:A billion dollars????

[mmkkbb]

Keep in mind that each of those console sales will probably have at least one game sale in the first year.

What's the licensing fee for a copy of a PlayStation game? If it's $25 / disc, the average PS3 owner will need to buy 4 games over the life of the platform for Sony to make its money back. $25 / disc sounds REALLY high, though.

Re:A billion dollars????

[xMilkmanDanx]

Doesn't really matter as long as it sells well they'll make a killing in the software licensing. Then, a couple years down the road when the hardware manufacturing costs have come down they start breaking even on the hardware too.

PS2 has been selling for what? Almost 5 years now. While they sold at a loss at first, it's likely been profitable even at their reduced price for quite awhile now.

Game consoles are all about potential market, if it wouldn't cost too much they'd give the boxes away just to keep the developers making for their product.

Re:A billion dollars????

[xMilkmanDanx]

Yeah it does. I would like to hear from a developer as to the actual cost but I would guess probably around 10-15 per game. Plus they sell the SDK too AFAIK.

Re:A billion dollars????

[Fr05t]

" $25 / disc sounds REALLY high, though."

Buying only 4 games in the life of a platform sounds REALLY low.

Re:A billion dollars????

[Emetophobe]

Buying only 4 games in the life of a platform sounds REALLY low

Lol, my thoughts exactly. Of course I own around 35 ps2 games, I consider myself on the high-end of purchasers.

Re:A billion dollars????

[Anonymous Coward]

IIRC MS needed to sell 7 games per xbox to make their money bacl.

Buying only 4 games isn't that much of a stretch though. I could quite easily see it happening to people who like to play once and a while.

Re:A billion dollars????

[mmkkbb]

I don't think you will hear from a developer. Those contracts are private matters! Even $10-15 per disc sounds high. nintendo used to charge $20 for each cartridge since they manufactured the cartridges themselves.

Re:A billion dollars????

[mmkkbb]

Um, I didn't say it was a lot. (Did I?)

Re:A billion dollars????

[Enigma_Man]

Not that low. Not all gamers are voracious. Some people are happy to buy only 4-5 games total. I suppose I may be thinking back to the SNES days, when games didn't take only 5 hours to beat though.

-Jesse

Re:A billion dollars????

[GTRacer]

Let me help out the averages...I have 96 PS2 games right now (7 .jp and the rest .us). Let me keep 5 of those (gotta help Sony!) and the rest of you can split the 91 amonst yourselves.

What does my PS1 collection count towards? Several of my PS1 discs were bought for play on the PS2.

GTRacer
- Yes, I spend too much on games. Yes, I'm an RPG whore. Yes, I have other consoles.

Re:A billion dollars????

[Anonymous Coward]

Since when are SNES games beatable in 5 hrs? Damn, I was never that good...

Re:A billion dollars????

[spectre_240sx]

Don't forget those who rent games rather than buy them. When I was actively into console gaming, that's basically all I ever did. I had a small library of games, but for the most part, If I didn't find a game that required a decent amount of time to complete and really required the purchase, I'd just go out and rent one now and then.

Re:A billion dollars????

[Anonymous Coward]

Never that good at...reading?

He said that SNES games took longer than five hours to beat.

Geeze

[czarangelus]

That's a pretty steep price tag for a poor college student like me. That had better be the price with a decent sized harddrive, and Linux preinstalled. Being able to use it as a toy, entertainment system, and cutting edge computer might be the only way for me to justify blowing that much money on it.

Re:Geeze

[Anonymous Coward]

I'm already out of college.

Re:Geeze

[generic-man]

The price includes no hard drive and no Linux.

Sony recommends that you purchase the 10GB SonyDrive with MagicGate for $299 more. You can install SonyLinux, and only SonyLinux, for $49 on top of that.

You'll also need a television capable of HDMI in, which'll run you at least $1,000. Anything less will not be able to capture the level of reality that Sony brings you.

Re:Geeze

[Anonymous Coward]

If you're a "poor college student," you shouldn't be playing games. Take that $400 and build yourself some Linux boxen instead so that you can do your homew0rk.

Re:Geeze

[Anonymous Coward]

Yeah, thing is, game companies really aren't that interested in selling to poor people... it's no problem though, when I was a college student (finished 2 years ago) I was perfectly happy with a low-end PC - plenty of older games are worth playing, you don't have to stick to the latest.
If I were you I'd be pleased that the next-gen launch will mean I can finally afford an Xbox.

Re:Geeze

[orderb13]

Do what my roomies and I did, everyone chip in and buy one together. We did it for the PS1, true, but it was still a good idea. Only problem is you have to live with the same roomies for a couple of years.

Re:Geeze

[Theaetetus]

That's a pretty steep price tag for a poor college student like me. That had better be the price with a decent sized harddrive, and Linux preinstalled.

How about a single unit that provides you with a DVD player, CD player, and Blu-ray disc player, in addition to being a game center?
When the PS2 came out, a lot of people justified the expense by saying "well, it's also a DVD player - that's like $150 right there" (which is what DVD players cost at the time... I know they're cheaper now). No one currently makes a Blu-Ray disc player, but the recorders are around $1500 each. At a tenth the cost for a player (not unreasonable), it makes the PS3 look more attractive.

Re:Geeze

[yellowbkpk]

But if no one has Blu-Ray players, then who will make Blue-Ray discs?

Re:Geeze

[Frangible]

I don't know, $399 is what I paid for my GeForce 6800GT, a "bargain" video card that wasn't anywhere near top of the line a few months back. For an entire console that will last years with no upgrades, that's cheap.

Re:Geeze

[Anonymous Coward]

The hard disk is an extra but each hard disk ships with Sony GNU/Linux.

Re:Geeze

[silentbobdp]

Because, you know, Sony's Hard Drive this gen wasn't 40gb for 100$.

Re:Geeze

[NinjaFodder]

Sounds to me like you need to get on one of those conga lines out there. Beware the scams.

123920483 and counting...

Re:Geeze

[Politburo]

The only problem with that argument is that there was a market for DVDs when the PS2 came out. Right now, there is zero market for blu-ray. As you say, there aren't even stand-alone players. Whether this will change by the time the PS3 arrives, I don't know.

Re:Geeze

[Tibor the Hun]

Not only that, but you can split it with your roommate.
That's what I did in college.

Re:Geeze

[Total_Wimp]

The only problem with that argument is that there was a market for DVDs when the PS2 came out. Right now, there is zero market for blu-ray.

As long as blue-ray discs start being released at about the same time as the PS3, people will justify part of the purchase price as going to their "free" blue-ray player. Sony will not only make money off PS3 games, but also off of an extensive library of hit movies that they'll be able to sell to PS3 owners.

If you want to see the model, it'll play out exactly like the PSP and UMDs. PSP early adopters justified a portion of their purchase price as going to the movie playing capabilities of the PSP. UMDs, despite high prices, have been selling well and making money for Sony. More UMD movies are on their way every week.

When I bought my first CD player I had a couple of friends that commented, "but you don't have any CDs." Eveyone starts out this way with a new format and they don't let it stop them from making that purchase. The only thing that will stop people from factoring the value of blue-ray into their PS3 buying decision is if they think HD-DVD will win. Otherwise they'll be delighted at the possibility of getting a BR disc player so cheap.

TW

Re:Geeze

[Politburo]

When I bought my first CD player I had a couple of friends that commented, "but you don't have any CDs." Eveyone starts out this way with a new format and they don't let it stop them from making that purchase.

Right, but there's a fundamental difference between "but you don't have any CDs" and "no CDs exist". As you say, it remains to be seen what the blu-ray library will be like when PS3 arrives.

The only thing that will stop people from factoring the value of blue-ray into their PS3 buying decision is if they think HD-DVD will win.

Or if they don't give a shit either way. I really just don't see people rushing out to get the next DVD standard. I'm willing to bet that DVD is 'good enough' for a vast majority of people.. especially since most people don't have a TV that would be able to display blu-ray OR hd-dvd. So far, from my experience, most people aren't finding a justification to spend the extra $ on HD.

Will It Make A Difference?

[Omega697]

With all these consoles coming out in such a spread-out schedule, I wonder if it will be possible for anyone to keep the hype up.

Re:Will It Make A Difference?

[NotFamous]

With all these consoles coming out in such a spread-out schedule, I wonder if it will be possible for anyone to keep the hype up.

We at Hype Your Product Enterprises specialize in just such an occasion. Is the Hype for you product running low? Fill it up at H.Y.P.E. Here is a taste of our product...

• The PS3 will contain 16 quad-pipelined memory-mapped Video Processing Hyper-Theaded Video Acceleration Units
• The Xbox-360 has been demonstrated in prototype form to generate 16 Terapixels/ms of dual-vortexed memory-mapped video!
• Meanwhile, industry insider rumors have it that the Nintendo Revolution will be released with a brand-spanking new Mario variant!!!!

Quick question re: the PSP

[Wah]

How much does that thing cost to make? It feels faaar more expensive than the $250 asking price.

But yeah (re: hardward discounts), when you have your name on every game, those props comes with a couple bucks, so they do make the initial loss in volume.

Re:Quick question re: the PSP

[Anonymous Coward]

You don't even have to RTFA. Just read RTF link.
$494

Re:Quick question re: the PSP

[kutsu119]

The PSP costs THAT much?!

hmmm... AC /rolleyes

Re:Quick question re: the PSP

[Fred Or Alive]

The $494 quoted in the article is the (informed guess at) PS3's manufacturing cost, not the PSP's, which is what the grandparent poster wanted.

Re:Quick question re: the PSP

[Anonymous Coward]

$180.

Re:Quick question re: the PSP

[realityfighter]

If I recall correctly, the PSP was also priced early on at around $400 - competitive with palmtops that use a similarly sized screen. The justification for this being that the huge LCD screen actually cost more than $400 for each unit. Obviously, this was either more Sony hype or they eventually had to skimp on the hardware to make the price comparable to the DS, thus leading to cheaper screens that get dead pixels easily.

Also, I know you didn't mention this in your post, but I thought I'd sound off on the "everyone sells at a loss" idea. Nintendo claims that they never sold the GameCube at a loss, which is possible considering how much it went for in the first generation. Considering the high price tags on most of the new geeky toys that come out, I'm inclined to think that they aren't selling at a loss. Hardware companies depend on people who walk into Fry's looking to buy the newest cutting edge ShinyGadget(TM) and willing to pay whatever the cost. Derivative products come into the market later with cheaper solutions, but for new hardware it's always the rich early adopters that nurse the product through it's infancy.

Sony and Microsoft continue to sell at a loss because that 1) they have other products and divisions to bring in the loot while their game hardware gains credibility. 2) The subset of gamers who will pay "anything" for a new system is comparatively small. They need to be offering consumer-level pricing as soon as they can in order to push a large number of units and gobble up market share. For Nintendo, games are the whole of the business. They don't have the flexibility of being attached to a wealthy company that makes something else. So of course, they need to make money on every sale. You only sell at a loss when you have money to burn.

Meh..

[kutsu119]

Would it be wrong of me to hope that Sony taking this sort of risk backfires and means the playing field is a bit more even this generation?

I'd love to see what would happen if all 3 companies had 33% market share.. Besides the obvious multi-platform title increase, specific and exclusive games could really swing the buying public.

Re:Meh..

[Fr05t]

Yes it would, and this isn't the kind of "risk" you think it is. It's the same risk MS took with the XBox, and will with the 360. I'm guessing XBox was your first console right?

Re:Meh..

[JonN]

It is not really that much of a risk that Sony is taking, as Microsoft is taking nearly the same risk. It is reported that the XB360 will be selling for $299, which still means a ~$75 loss per system for Microsoft.

Re:Meh..

[kutsu119]

I just own a Nintendo DS and a gaming PC, so no, no Xbox

Re:Meh..

[megarich]

considering i hate ms with a passion at this point yes! i'll compromise though, i wouldnt mind a 50/50 between sony and nintendo :) just leave m$ and their world dominating ways out of the picture.

Re:Meh..

[Anonymous Coward]

I really didn't think they made people like you anymore.

Oh nos, MS are evil etc etc... grow up. The Xbox is a good machine, with a bunch of good games to play on it. The Xbox 360 looks pretty good too.

How is this not considered "Dumping"

[Aumaden]

If a silicon manufacture in Japan/Korea/etc sells chips below cost, it's considered "dumping". Folks start yelling for import tarifs and whatnot. The manufacture is generally painted as being "evil".

How come this is ok?

Is it because this is a direct consumer product?

Re:How is this not considered "Dumping"

[tomstdenis]

There are a lot of sony developers in the US. Getting the thingy capable of playing the stuff the developers writes ... think about it.

Though yeah, it is anti-competitive as it bars newcomers to the field since they can't afford the cut.

But alas... whatever, we're all gonna work for Taco bell anyways ... ;-)

Tom

Re:How is this not considered "Dumping"

[Omega697]

Well first off, they're not just "dumping" it here, they're "dumping" it in Japan too (and anywhere they can sell it). I think dumping has to do with attempting to invade a particular market by offering goods (ones that are extremely similar to others offered on that market, i.e. the PlayStation brand alone is enough to differentiate it) at well below what they are worth. However, just because it costs Sony $494 or whatever to make them, doesn't necessarily mean they are worth that much. They're only worth what people will pay for them, and I'd bet dollars to doughnuts that Sony's going to be asking exactly what they think people will be willing to pay.

Re:How is this not considered "Dumping"

[Anonymous Coward]

Mod up, on both counts. (Although I think the first is the key one.)

Re:How is this not considered "Dumping"

[parliboy]

Because dumping refers to selling a cost in a foreign market at a cost below a product's home market cost. Here's it's not dumping, simply a loss leader, as the cost is low in all markets. http://www.wto.org/english/tratop_e/adp_e/adp_e.ht m

Re:How is this not considered "Dumping"

[Fross]

that depends on what the price is worldwide - they've not localised the price given.

i bet it's only that low in the US as that will be where the biggest competition will be. in japan, it will probably be more expensive (comparatively, less subsidised anyway) as the xbox is less of a threat there.

and in europe we'll probably pay 500 euros for it and get screwed over as usual :/

Re:How is this not considered "Dumping"

[MindStalker]

Also to add to the other comments, generally Dumping is trying to destroy competition, so that you can sell at a higher price later. I seriously doupt Sony ever plans to up its price for the PS3.

Re:How is this not considered "Dumping"

[ikegami]

Say I open up a chocloate bar manufacturing plant. Do you think the $1 I get from my first sale will cover all my R&D, equipment, personel, power and other costs? No. While I'm not selling the bar at a loss, my company will have lost money until I reach my break even point. Sony and every single company out there is doing the same thing.

Re:How is this not considered "Dumping"

[Anonymous Coward]

It's not dumping because: 1) They intend to make money on the games--they're not in it explicitly to bankrupt their competitors. 2) There is no sizable domestic competition. 3) The competition that does exist does exactly the same thing.

If some Korean auto manufacture brought to our economy a bazillion cars of comparable quality to domestic vehicles with a price lower than the cost of manufacture--intending to make everyone like their cars, but planned to raise the price after the competition went bankrupt, that would be dumping.

I'm not convinced that people would buy their games after they raised the prices appreciably, even if Sony wanted to do this. They're already $50-60, but when you go $70+ it just doesn't work here. Maybe it would work in Japan, but I think quite a few people here would just up and go outside. It'd have to be one hell of an addicting game.

Re:How is this not considered "Dumping"

[Anonymous Coward]

Say I open up a chocloate bar manufacturing plant. Do you think the $1 I get from my first sale will cover all my R&D

Good afternoon, Mr. Wonka.

Re:How is this not considered "Dumping"

[supabeast!]

This is NOT dumping, this is a loss leader - taking a loss on one item to bring in customers who will buy others.

Dumping is selling massive quantities of a product below cost in an attempt to drive competitors out of business, with the intention of raising prices later.

Sony isn't trying to put anyone else out of business - even if they somehow managed 100% market share with the PSP and Gamecube, Nintendo would still thrive off of it's various IP, trading cards, and game development, and all their other competitors would actually make more money by NOT being in the game with Sony. Sony is also not planning to raise prices later; they'll be lowering prices and offering refined products.

Re:How is this not considered "Dumping"

[demachina]

Because its called a loss leader not dumping. They are selling something at a loss in order to make a profit later when they take a cut out of the games sold for their console. All game console makers do it because if they make the upfront cost to high people(especially families) wont be able to justify buying it and the whole thing craters. In the end customers still pay for the full price of the hardware though its dribbled out over time in an extra cost tacked on to the games, which people don't notice as much.

To be honest I am no fan of game consoles, especially when they are up at the $400 price point. You are spending a lot of money for something with very limited capability when you could buy a real PC for nearly the same price that can do a lot of other things too. They also usually have a feeble CPU and game developers have to tear their hair out to optimize their games and that it tends to result in games that are a lot less interesting than they could have been on a PC with some CPU power. And there is a huge lock in associated with a console, only one manufacturer and we rant about that when Apple does it. Not sure why its OK for game consoles.

PC games and PC's to run games whether it be Windows based or Linux based using WINE is a much better way to go.

Re:How is this not considered "Dumping"

[Anonymous Coward]

If a silicon manufacture in Japan/Korea/etc sells chips below cost, it's considered "dumping".

How come this is ok?

Is it because this is a direct consumer product?

Nobody else makes PS3s, so Sony isn't undercutting anyone.

Re:How is this not considered "Dumping"

[IpalindromeI]

Ok, this is the third post under this topic in which you have misspelled the word doubt. I realize that a p looks like an upside-down b, but in that case you should be spelling the entire word as qonpf. And I qonpf that is what you meant.

Re:How is this not considered "Dumping"

[xenocide2]

Dumping laws are awful for consumers. But consumers don't have a lobbyist group, like Business Software or the Kansas wheat farmers or other American producers have. At best, we get "watchdogs." Dumping essentially provides low cost goods to consumers, reguardless of the reasons why the provider is doing so.

As a result, dumping laws exist. The nefarious globalizing force named the World Trade Organization is responsible for deciding whether it's dumping or not. Some people feel the WTO is beholden to the US, though recently it's decided a few notable complaints against the US. Steel was the big ticket item during the last Presidential election, and it's partly why our manufacturing economy had been sucking.

Anyways, dumping is usually about either selling "below cost" or selling something overseas cheaper than domestically. Hyenix or whatever was found to be improperly subsidized by pricing. By compelling banks to bail the company out, they had subverted free market principles which would otherwise have corrected the mistake in the long term. Frankly, I'm suprised the US agricultural policy hasn't come up more often within the WTO. Perhaps that's what the critics of the WTO are implying...

Re:How is this not considered "Dumping"

[MindStalker]

Wow, you actually looked at my other comments? Seriously dude, your anal. Anyways, thanks for the correction. But I doubt (grin) I'll ever change.

Re:How is this not considered "Dumping"

[IpalindromeI]

I didn't search through them specifically. I was just reading through the comments and noticed that particular misspelling a few times, and looked to see if it was all the same person. But yes, I am a bit anal about spelling and grammar. I doubt I'll ever change.

Weird..

[seti]

Correct me if I'm wrong, but doesn't the loss or profit made on each unit depend initially on the development costs, and then on the actual amount of units produced?

i.e. if the development costs were a theoretical $1000 and each unit has a cost of $1, making 1000 units will be $2 each, whereas making 2000 will cost $1.50?

Re:Weird..

[m50d]

I'd imagine they're talking about the marginal cost rather than initial outlay, so it's a $1bn loss plus whatever they spent developing it.

Re:Weird..

[robertjw]

Correct me if I'm wrong, but doesn't the loss or profit made on each unit depend initially on the development costs, and then on the actual amount of units produced?

From what I've seen these numbers don't seem to account for R&D costs. From the article:

"Merrill Lynch Japan Securities has recently calculated an analysis that the production of a single PlayStation 3 console will cost Sony approximately 54,000 yen to make ($494), as of its initial release in 2006."

The article also says Sony has over $1.8 Billion invested in chip development. My guess is this is above and beyond the $494/console number.

Looks to me like Sony and Microsoft are both in this 'console war' for the long term. They both have deep pockets and they seem to be playing a very expensive game of chicken. It will be interesting to see who blinks first.

Re:Weird..

[bogjobber]

You're right, but the variable cost of each individual unit actually goes down when a larger number of units is manufactured. So if there is an overhead of $1000 dollars(for demonstration purposes) and you make 1,000 units at $1 a piece, then you have a total expense of $2000. But if you make, say 10,000 units, the price of manufacturing each unit might go down to $.90. Then your expenses would be $10,000. You spent five times as much, but you have ten times as many units on the market. So you might be spending more overall, but as long as you can sell all the units you produce, you'll be making a larger profit. That's what the article means when it talks about the savings from mass production.

Re:Weird..

[Anonymous Coward]

You're right, but the variable cost of each individual unit actually goes down when a larger number of units is manufactured.

Too much of a generalization. If you study business you'll quickly learn about diminishing economies of scale - i.e. if you need to have employees working overtime, invest in new manufacturing facilities and so on to keep up with demand the cost per unit can get higher when the volumes grow.

Re:Weird..

[modecx]

Exactly right!

That's like people saying that each B2 bomber cost $4 Billion (or whatever) to produce. They're right in a way, but that line of thinking completely ignores developments made during R&D that will affect the rest of the industry, or even the world.

Perhaps (hypothetically speaking) Lockheed developed some lightweight materials (or some other widget) for use in the bomber that will eventually find themselves in automobiles. Bonus for us. If that saves a few billion a year in fuel, it's all worth it, huh?

Sony wants to use their Cell processor stuff in other electronics, and they hope that their high density DVD format will take over the universe. It's exactly the same as the hypothetical bomber situation.

Re:Weird..

[InfiniteWisdom]

With the semiconductor industry though, fabricatoin costs, error rates etc. are very major factors. With time, they get better at lowering error rates, developing better fabrication technology and so on. This is unlike traditional manufacturing where the fabrication technology itself is not rapidly evolving anymore.

Starving Geeks

[Vonotar82]

Well, I can't say I'm that surprised at the price tag, as all new technology is rather pricey. Will that stop all the random single people from buying one immediately? Not at all. In fact, I'm pretty sure we'll see those self same buyers out on street corners with signs saying "Will max out materia for food".

More R&D Coming

[JonN]

I cannot say I agree with you, however just an fyi; Sony's new CEO Howard Stringer is saying that Sony is going to cut back on other research and development in order to finance more R&D into the two parts of PS3 which is supposed to seperate it from the competition (XB360). No surprise, these two things are: the Cell processor, which will be used not only to power the PlayStation 3 but also many of Sony's electronics, and the much ballyhooed Blu-ray disc, which will be the standard hi-def format for the PS3 and the format that Sony hopes eventually replaces DVD in the marketplace.

Going underground a mistake

[slusich]

Putting the PS3 underground for a year with the 360 coming out in a few months seems like a mistake to me. It would seem they would want as much exposure as possible during this time to keep from being completely overshadowed by Microsoft.

Re:Going underground a mistake

[Theaetetus]

It would seem they would want as much exposure as possible during this time to keep from being completely overshadowed by Microsoft.

Maybe, maybe not...
Microsoft has been playing a "me, too" game with the 360. "PS3 will have a hard drive? So will we!" "PS3 won't have a hard drive? We'll remove ours too, to save costs for you, the consumer." "Sorry, no backwards compatibility. What, PS3 will have it? Oh, we will too." "They have wireless controllers? So do we!" etc.
By "going underground", they stop providing free marketing data to Microsoft, and if they suddenly start cramming more features in there which they then "leak" the day before 360's launch - like hard drive, wireless networking, built-in TiVo, etc., it could make a lot of people reconsider their 360 purchase.

Re:Going underground a mistake

[Anonymous Coward]

Wow, you need to relax. They're only video games...

Re:Going underground a mistake

[Anonymous Coward]

Maybe in your opinion, but a lot of gamers like me want a ps3. A recent (06/06/2005) poll at www.gamefaqs.com asking "Which of the next-gen consoles are you most likely to buy?" had the following results:

PlayStation 3 42.56%
Revolution 26.59%
Xbox 360 16.76%
I can't decide, I want all three 14.09%
TOTAL VOTES 80199

Re:Going underground a mistake

[Cornflake917]

It seems interesting that Sony decided to close the lid on the PS3 after this article came out, which killed much of the hype surrounding the console. Sony probably realized that when developers get a good look at their hardware, the truth will come out. I think they're hoping to let the hype-machine run on just pure speculation now. Which might be better than continuing to pull BS specs out of their ass, and the dissapointing the public when they actaully find out what's inside.

Re:Going underground a mistake

[DrXym]

I expect they'll keep the FUD ticking over during the XBox 360 launch. But as the PS3 is getting more buzz than the 360 it's possible they're relying on the gaming community doing some of it for them.

The 360 does seem to be generating a large amount of 'meh' reaction in the press who see it underpowered by comparison with Sony's offering.

Neither seems perfect to me. But the PS3 seems to push the envelope a hell of a lot more than its counterpart.

Re:Going underground a mistake

[chman]

Except that MS launched first, of course. And the hard disk comes with it, though it's removable for some strange reason. And they've made the backwards compatibility issue clear now. As for wireless controllers... I doubt Sony were the first to think of it. Also, if Sony goes for a hard drive, wireless networking, and TiVo functionality, how is that not copying the X360? MS has already announced the X360 has all of that (at least, connected to a MCE PC). I just wish Sony would play 'me, too' with MS and actually give us some real-time footage, but I think we've got a long wait before we know what the PS3 can actually do.

Re:Going underground a mistake

[slusich]

First of all, relax...
Secondly, the dreamcast was an amazing console which suffered from poor management and marketing. I still pull my dreamcast out from time to time.
I own all 3 of the current generation of consoles. I probably play the Gamecube the least, but the PS2 and XBox both get regular use.
There are alot of great Xbox games out there other then Halo (which I don't even own) including Fable, KOTR, Morrowind, and the DOA series.
I'll buy the 360 when it comes out. I'm sure I'll be picking up the PS3 as well. Revolution might have to wait longer, but it will get added to the same collection.
At some point, even the 360 and the PS3 will look about as up to date as the Fairchild Channel F I've got sitting on my shelf.

Re:Going underground a mistake

[Skankme]

Talk about a fanboy!

Every non-Sony and non-MS party has been saying that from what they've seen, the consoles are pretty much even in terms of power, with a SLIGHT advantage going to the PS3.

And the statement "nothing but PC developers..." is just plain wrong.

Re:Going underground a mistake

[Theaetetus]

Except that MS launched first, of course. And the hard disk comes with it, though it's removable for some strange reason. And they've made the backwards compatibility issue clear now. As for wireless controllers... I doubt Sony were the first to think of it. Also, if Sony goes for a hard drive, wireless networking, and TiVo functionality, how is that not copying the X360? MS has already announced the X360 has all of that (at least, connected to a MCE PC). I just wish Sony would play 'me, too' with MS and actually give us some real-time footage, but I think we've got a long wait before we know what the PS3 can actually do.

You missed the point... Everything Sony's announced, MS has immediately responded that they're doing too. By going underground, MS won't have any "features" to piggyback on and will launch as-is. Sony can then announce additional features which MS can't match.

And they've made the backwards compatibility issue clear now.

"Backwards compatibility will be available for some games, but not all. We don't have a list of which ones right now. Just buy the system, and we'll tell you afterwards whether your old games will work. Have a nice day."

Re:Going underground a mistake

[javaxman]

I still pull my dreamcast out from time to time. I own all 3 of the current generation of consoles... I'll buy the 360 when it comes out. I'm sure I'll be picking up the PS3 as well. Revolution might have to wait longer... the Fairchild Channel F I've got sitting on my shelf.

Dude, could you take a picture of all those machines, post it on the web and let me know where to find it ?

I'd like to be able to show it to my wife the next time she gives me a hard time about *my* electronics collection... although, I think I have as many computers as you have consoles, so maybe I'm not any better, now that I think of it. Drat.

Re:Going underground a mistake

[slusich]

My wife has seriously threatened to lock me out of the house if I bring in one more piece of computer equipment.
Aside from the tons o' PC hardware, including old motherboards going back to 386's, I've got a full AS/400, which is about the size of two dorm fridges put together.
Gaming system wise, I've got the Fairchild, 3DO, NES, Saturn, Dreamcast, Gamecube, Genesis, N64, PS1 &2, Xbox, Odessy...and a couple more that are slipping my mind right now.
I feel for you dude. Geeks with wives always get shit for this very thing.

Re:Going underground a mistake

[javaxman]

My wife has seriously threatened to lock me out of the house if I bring in one more piece of computer equipment.

I just like that there's someone out there so much worse ( or better, depending on your point of view ) than I am. Your computer collection, especially the AS/400, makes my single PC, laptop, NeXT hardware and original 6100 PowerMac look like *nothing*, forget about the gaming consoles. My wife just doesn't understand why I need these machines in addition to our daily-use computer, which is an iMac these days.

Sadly, I don't really find a compelling argument, since I seldom find time to boot them, and I did actually get rid of a couple of other machines ( a Mac Plus and G3 PowerMac ) recently.

I'm sure it wouldn't be a big deal if we didn't live in such a small place. Damn housing prices, yea, that's what's to blame...

Re:Going underground a mistake

[Jarlsberg]

I wouldn't even know what to do with an AS/400. but I admire your collection never the less. I can tell you're an american by your choice of gear, though. I'm an european, so I don't have a 3DO, Fairchild or anything like that. I've mostly restricted myself to the popular micros of the 80s and 90s that were sold in Europe, so I've got a complete collection of Amigas (including the consoles), Commodores (except that C64 game console - the one without the keyboard - that I can't seem to find any where) and a few Ataris, Spectrums, BBC and such.

Re:Going underground a mistake

[slusich]

Doesn't matter how big the house is, we still end up filling it. I have a good sized (12'x14') room dedicated to the computer and some of the older systems...planning on building a shelf system to house them all. Sad thing is, I'm realizing now that the room's just not big enough for what I want to do...

Re:Going underground a mistake

[Anonymous Coward]

What type of garbage is coming out of your mouth? MS has always planned on a harddrive in the 360, they've never made any statement to the contrary. The same with wireless controllers, that was mentioned some time ago (before Sony ever said squat). The 360 also has WiFi and quite a few other abilities I'm not even going to bother with, because you're obviously some biased prick. I can't believe someone even gave you mod points for such blatant false information and bias.

WTF?!

[LegendOfLink]

The PS3 goes underground until it comes out next year.

I feel bad for the poor bastard who has to dig the hole to bury all of those units...

Re:WTF?!

[Fr05t]

I don't - digging a hole to bury the maybe 3-4 prototypes that exist shouldn't be too hard.

Re:WTF?!

[hal2814]

Can you get me a copy of ET while you're down there?

Re:WTF?!

[Mr2cents]

Don't forget the poor bastard who will have to clean off all the dirt once they're ripe to sell.

Re:WTF?!

[Anonymous Coward]

It's called a landfill.

Pricing

[dannyitc]

I wonder if MS and Sony are creeping up on the ceiling price of what consumers are willing to pay for a new console. With an initial price of $400 and games costing $60 apiece, it'll be interesting to see their sales figures for the first few months after launch.

Also, anyone else think that Nintendo may be a bit more successful at undercutting MS and Sony with MS and Sony both ramping up prices? I would assume that Nintendo will make the Revolution's price point a large issue.

Re:Pricing

[generic-man]

Companies have been selling PS2 games in Japan for ¥6850 brand new for years now. That's over $60 by the current exchange rate and it doesn't include (5%) sales tax. People snap 'em up.

Re:Pricing

[Kojiro Ganryu Sasaki]

You call that expensive? Typical price here in sweden for a new game is about 550 crowns, which is 70 usd.

Re:Pricing

[Shadow99_1]

I think you may be a bit pre-mature on the cost of the Nintendo Revolution... So far we know next to nothign about it or what it may (or may not) cost... We also have no real idea how much the Xbox 360 may cost at launch either... Or heck even PS3 costs...

After all this was just a bunch of analysts getting together and deciding what they feel will be Sony's asking price for their next system that is still more than a year away in the US or Europe (though Japan will get it next spring)...

It's way way to early to say who will truly be more expensive...

Re:Pricing

[dannyitc]

I would think it would be fairly safe to assume the Revolution will have a significantly (relatively) lower price than either console. Remember that the GameCube launched at $199 when both the ps2 and xbox were still retailing for $299. Nintendo has made it clear that they intend to market a pure gaming system instead of the multimedia platform that sony and ms seem to be pushing, and along with that will surely come a lower price point.

Re:Pricing

[bonehead]

"Creeping up" on the price ceiling? Perhaps.

Honestly, it amazes me that consoles continue to sell in the first place. My personal price ceiling for a game console would be about $150, for new tech. At this stage of the game, I'd probably not be willing to drop more than 40 or 50 bucks for a PS2 or Xbox.

Needless to say, the last game console I bought was a SNES.

Re:Pricing

[Shadow99_1]

They will also come out a year after Xbox 360 and since we have no idea about actually hardware for this machine that we have only seen the casing for and nothing else... My point is (and was before) that it's to early to guess what the prices will be or who may or may not be making money off of the systems next generation...

Re:Pricing

[WaterBreath]

But the best indicator of future behavior is past behavior. And in the past, Nintendo has not only made sure their prices are low, but also that they are selling at a profit.

Which, incidentally, is why hype-happy game journalists spreading the propaganda that Nintendo is on its last legs are just plain wrong. While it's true they don't have the same market share they used to, they also don't need as many sales as Sony and MS have in order to survive.

Re:Pricing

[aes12]

Inflation plays a large part in this.

According to http://www.usedgames.com/nintendo/nintendo.htm#nes the original NES opened up at $159 in 1985. Using the Inflation Calculator http://www.westegg.com/inflation/ that equates to $282 in 2005 dollars.

Yes, electronic equipment has gotten significantly cheaper in the past 20 years, but the video game industry has also grown significantly. I'd be willing to bet that the demand for video games and thier consoles has gone up far more than the additional 33% inflation adjusted price increase.

Re:Pricing

[legojenn]

Maybe Sweden should adopt the Euro then. It will only be 58 Euros and you can brag about how much more your currency is worth than the US, then sulk because the game will cost in Euros what it costs in dollars in the US. Actually, ignore that, I am not making any sense today. Keep the Swedish crown and be happy that you will be a millionaire long before people in the pound, euro and dollar countries will be. And give us back our Swedish hockey players when the hockey lockout ends. I miss Daniel Alfredsson and his cheesy bling-bling adverts on TV.

Re:Pricing

[Anonymous Coward]

$399 is over my price point. $50 for a game is over my price point. 60-70 is laughable at best.

For me to impulse buy a NEW console/game the console would need to be 100-150, and the games right around 30 bucks.

Until then, I stick to my buy late ideal, used games at game stop for 10 bucks a pop, and I can afford them in spades.

The demise of the dream cast rocked for me. I got the system and 10 great games for the price of a new XBox. Ha!

Re:Pricing

[Anonymous Coward]

That's really weird, how much would you pay for a gaming PC? Or better, how much did you pay.... ;)
Consoles are CHEAP for gaming purposes, as long as you don't buy too many games. Of course, publishers try for years to get PC titles up there, so that will change sooner or later. They already got the prices up quite a bit here. Damn Euro crap.

Re:Pricing

[bonehead]

A gaming PC? Wouldn't spend a dime on one. What I have done is spend about a hundred bucks to upgrade the video card in my general purpose PC.

Then again, the game I still play most frequently is Quake 2. I've tried a lot of the new games, and while the graphics are more impressive, they're just not as enjoyable.

Re:Pricing

[bleaknik]

You know, Bonehead... You're right! I haven't had much incentive to play new games anyway.

I don't see Unreal 2005 or Counterstrike 2 being that imperative of an upgrade over Quake 2. RPGs seem shorter and less fulfilling. I get bored with new Action games. I know WoW is supposed to be amazing, but Diablo II still keeps me company when I want an Online Game.

To be honest, almost all of my new technology purchases are to help me play the vintage. I bought an AIW9600 so I could use my computer as a console monitor/output emulators to my big screen. I bought an X-Box so I could mod it and play NES games. My Gameboy Advance was bought so I could play Pokémon and rereleased SNES classics (DKC, SMB Advanced, Zelda:LTTP).

And then I own a Gamecube, and I actually enjoy playing several of the newer games...

/shrug.

Re:Pricing

[bonehead]

Ya know, it's weird. My most recent video card upgrade was for the purpose of being able to play Doom 3. $100 for the card, and another $50 for the game, and I got bored with it after one evening. Haven't touched that game since.

But even after all these years, I still enjoy firing up Quake 2 every now and then.

From TFA:

[Shadow Wrought]

Sony estimates that the aging console has only completed 10% of its lifespan in Iran. No, seriously. There's a Sony office in Iran.

I can only imagine how well GTA: San Andreas is doing over there...

Re:From TFA:

[Hinhule]

You haven't heard of GTA: Tehran eh?

Re:From TFA:

[Anonymous Coward]

Yeah, it's too frustrating though. The cops catch you and you get executed instead of just fined.

Re:From TFA:

[sesshomaru]

I wonder how Prince of Persia does over there...

Re:From TFA:

[Drakai]

I'm sure sometimes they just cut off your hands.

Re:From TFA:

[Dolly_Llama]

GTA: Tehran has a neat plot that follows your development from a cheap street punk, through your time hostage taking in the Islamic revolution, all the way to your darkhorse victory as president!

Re:From TFA:

[ad0gg]

They saved a lot in model development, it only required one female model for the whole game.

Dumping

[DarthVeda]

This sounds a lot like:

"Dumping: selling goods at less than the normal price, usually as exports in international trade. It may be done by a producer, a group of producers, or a nation. Dumping is usually done to drive competitors off the market and secure a monopoly, or to hinder foreign competition."

Drive off competitors? Secure a monopoly? Sony? Never!

Re:Dumping

[Anonymous Coward]

Really, it would effectively be dumping only if (1) the PS3 and the XBox 360 are fungible goods, and (2) the XBox 360 is selling for more than $399 when Sony starts selling the PS3.

Since neither is likely true, your case for dumping doesn't hold water.

Re:Dumping

[GauteL]

The reason they can do this is that the Playstation is not a useful product by itself, it becomes a useful product when combined with the games for the platform. Thus Sony is selling one part of it at a loss, and recuperating the rest on games.

This is not uncommon, nor illegal (IANAL). It is used for mobile phone services and digital cable boxes (giving away the hardware and earning money on the subscription), or razors (think Gillette).

It is also extensively used by others in the Game console industry. For example Microsoft used it heavily for the Xbox.

Dumping is normally done by using income from one part of the world to subsidise the sale in other parts in order to drive away local competitors. See for instance Microsofts prices in parts of the world compared to the US. Sony sells consoles at a loss everywhere.

Besides, Sony does not have a monopoly on game consoles. Microsoft and Nintendo are both in it.

Re:Dumping

[rtaylor]

[i]Dumping: selling goods at less than the normal price[/i]

If the normal price is $399, and the price they're selling at in the USA, Europe, Japan, etc. is all approx. $399, then what makes you think it's dumping?

Re:Dumping

[Anonymous Coward]

I think the difference is that they're selling it at a loss to compete and not to undercut anyone else. All of the consoles will be similarly priced. There's research that suggests that people won't buy a device if it goes over a certain threshold. Neo Geo, anyone?

Re:Dumping

[djdanlib]

You can't have a monopoly when you have 1/3 of your customers' mind share. You have to be the only one. Sony, Microsoft, Nintendo. None of them have a monopoly on gaming systems, because they share with the other two competitors. All three have deep pockets, so dumping wouldn't affect the other companies.

More from the Corporation of Arrogance:

[kryogen1x]

From TFA:

The press was saying that it was expensive, but it was a huge hit. It's the same thing with the PlayStation Portable from last year. The Game Boy Advance is a same handheld gaming machine, and it costs less than 10 thousand yen ($91). On the other hand, our PSP had cost 25,000 yen ($229). But people lined up overnight to buy it, and it sold out on the day of its launch. It all depends on whether people want it. Of course, I'm confident that the PS3 is a product that people will definitely want.

Funny, I remember Slashdot covered this and the PSP didn't sell out on opening night.

Re:More from the Corporation of Arrogance:

[Anonymous Coward]

Not in the States...but it did in Japan.

Re:More from the Corporation of Arrogance:

[mikael_j]

Well you see, it's statements like the one you quoted that can normally be used to identify a fanboy. The covert message here was (I think) "Nintendo boring, Sony r0xx0rZ, byu teh PS3 ro yuo r teh l00zar Nintend0rk k1dd13!!!11"

/Mikael

Re:More from the Corporation of Arrogance:

[Anonymous Coward]

Pikachu. Pika!

Re:More from the Corporation of Arrogance:

[Formula420]

Well, if you notice that they quote the price in Yen, not US$. They are referring to the Japanese launch of the PSP. I believe, but can't find any links to support this, that they only had 100,000 units available for the Japan launch, and they all subsequently sold out on the first day. So yes, it is a little misleading, but still true. The North American launch of the PSP is what you are thinking of.

Has History tought them NOTHING?

[Orion83]

The hubris of these guys... how many times in history has a $399 game console sold well?

Oh wait, it's not just a game console "this time"?
It's an entire entertainment center? A supercomputer too? Gee, in THAT case....

Re:Has History tought them NOTHING?

[Anonymous Coward]

Well clearly Sony has learned nothing from history. Although if they actually HAD learned something from the history of $399 game consoles I would be most impressed.

Re:Has History tought them NOTHING?

[Momoru]

I agree its a very high price, certainly not an impulse buy, and definitely will get an evil look from wife as christmas present. But there is this little thing called inflation, which i think they are adjusting for. The original NES was what like $200 in 1985? (I think thats what i paid for it in 87' at least). If you adjust for inflation it looks like that would be around $350 today...and I think the NES may have started a little more expensive then $200 (of course it also came with a game and other crap). But I think that is the main reason, you can't compare past and present prices.

Re:Has History tought them NOTHING?

[BooRolla]

Kinda like that original PS2 thing. what a horrible flop that was...

Re:Has History tought them NOTHING?

[mink]

Actually it was IMO.

How many functional PS2 V1 systems are still around?

There have been 12 Models of PS2 and Sony just cant build anything with any quality.

I remember an old Walkman I had that survived 4 years as a resturant dishwasher. Door busteed, constant earphone snagging (went through at least 4 pairs of earbuds) battery door missing, but it still played tapes and tuned the radio just fine.

Your lucky if a PS2 unit turns on.

I have gone throuhg a V2 system, a V4 system, A v5 system, and a V9 system.

I never dropped them, or moved them from the shelf (lowest on the entertainment center), and never stood them on their sides (this in some models would kill the machine fastr). I kept them clean and as free of dust as possible. Electronically most are still solid (one has some cold solder joints in the powersupply that were easily repaired but inexcusable) and functional, but the DVD drives are total complte worthless shit.

Add to this the fact that the fuckheads at Sony wont sell you parts to repair the units, they want upwards of $150 each console to fix the bad shitty hardware they put in there to start with.

I'll probably get a PS3 down the road after I see how abysmal the build quality is and used ones start to appear for under $100 so I can make sure I can get a steady supply of spare parts from people with "dead" units.

Have to hand it to Sony.

[mr_luc]

I have to hand it to Sony.

They really know how to do this "business" thing.

Microsoft comes to E3 with a console that is looking amazingly polished, down to the extensive new XBox Live features, and with tons and tons of in-engine first looks.

Sony comes to E3 with a gigantic press event held at their cinema, with 2 simple real-time tech demos, prerendered (although using PS3 hardware) gameplay footage that blows away any other *footage* to date, and a bunch of video clips featuring their spider-man franchise.

There is no doubt about it -- MS is shipping earlier, MS has a better online infrastructure, and many of MS' games are already playable ...

But Sony won E3. All anyone wanted to talk about was the KillZone trailer.

Now, to keep anyone from pointing out that the Emperor has no clothes, they're disappearing. So all anyone will talk about, until they're ready, will be ... the KillZone trailer. Which is not a bad situation to be in, because that trailer was pretty amazing.

It's absolutely a great idea. For the record, I have nothing against MS, but I'm WARY of them. Anything, even something unfair, that keeps them on their toes is probably a good thing for the rest of the world.

I won't buy either until they're both out next summer, though, so it's sort of moot.

Re:Have to hand it to Sony.

[badboy_tw2002]

If you think Sony is launching anytime before Christmas 2006 you're dead wrong. Know any US devs with _beta_ hardware? I sure don't. Japan before June, US in October.

Re:Have to hand it to Sony.

[SirSlud]

> All anyone wanted to talk about was the KillZone trailer.

Unfortunatly, Sony drove home the very antithesis of what progressive gaming should be.

Using flashy, prerendered stuff to sell videogames is the equivilent of what Hollywood is going through right now; Celebrities and large budgets don't sell movies. Good movies sell movies.

The buying public is usually a little slow to come around on quality of product versus quality of packaging, but its happening in the movie industry right now, and I won't be surprised if it happens in this next generation of consoles. If the reaction to KillZone is any indication tho, we have a ways to go. It was a fucking cool scene, but to actually use it as the basis of what to expect from the PS3 would be an error of extthe highest order.

Re:Have to hand it to Sony.

[Formula420]

I would hope M$ would have a more polished console and a host of new Xbox Live functions to show at E3, they are launching their new console in about 5 months!! Sony, on the other hand, is almost a year and 6 months away from when they will launch, so all they really have is pre-rendered footage. I read somewhere that the KillZone trailer was rendered in real-time on alpha dev hardware, at 5 fps. They then took the footage and sped it up to 60 fps in post. Again, very misleading, but still true and, considering their console is over a year away, probably the only way they could get anything out as the GPU has not even been produced yet.

Re:Have to hand it to Sony.

[Anonymous Coward]

and many people are viewing the KillZone trailer as 'what to expect from the PS3'.

many people think that is actual in-game footage.

Re:Have to hand it to Sony.

[Anonymous Coward]

"For the record, I have nothing against MS, but I'm WARY of them. Anything, even something unfair, that keeps them on their toes is probably a good thing for the rest of the world."

Both Sony and Microsoft are evil. I root for MS in the console to hold Sony back. If Sony made an OS I'd champion that to hold MS back.

Ah, the Sony press machine. Can it do to MS what it did to the DC? DREAMCAST! I'll always love you! =(

Re:Have to hand it to Sony.

[Anonymous Coward]

Go back to teamxbox retard.

Re:Have to hand it to Sony.

[Anonymous Coward]

I do, and it looks like this; but it's unfinished.

http://ps3.ign.com/articles/628/628048p1.html

It's not running at full clockrate, it gets REALLY hot (but so does the X360's devkit, which often experiences graphics glitches and lockups when it warms up), and the GPU is a G70, not a fully-fledged RSX.

It's definitely not perfect for development, but it will start devs off with a leg up to at least start the first couple of games, and they'll run (faster) on the final as long as there are no serious sync issues, and they'll get a second revision closer to term with actual PS3 hardware in it which is when they test what it behaves like on the final PS3 Cell, RSX and Blu-ray (but possibly not Dual Shock 3). (I doubt the transition from this hardware to the final PS3 will go smoothly, so the first batch of games might not be as polished as anyone would like, but that's par for the course for launch titles.)

Somewhere in the ballpark of a Christmas 2006 release for US and Japan does sound about right, though, with Europe following sometime 2007.

*shrug* I'm gettin' both. And probably a Revolution too. Why not? :)

Re:Have to hand it to Sony.

[Xugumad]

And when I can go out to the shops and buy a game that looks like the Killzone trailer, I'll believe it. In the meantime:

1. Watch the trailer carefully. Note how much stuff is on screen at once. The entire thing is _very_ carefully rigged so that the amount of action on screen at once is constant.
2. Define "rendered in realtime". For example, pre-calculating visible faces and ensuring that occluded polygons were never rendered, would give you a significant improvement in how much detail you can show. This is similar to a trick I believe ATi used to improve 3D Mark performance.
3. Both consoles are using next gen ATi/Nvidia GPUs, with modifications for their respective consoles. Unless ATi has really messed up, though, there shouldn't be a major performance difference between the two chips.

While the PS3 does look like it will have better peak performance, it is also going to be much harder to use fully. Where the XBox 360 has 3 symmetrical CPU cores, and uses the same shaders for pixel and vertex, the PS3 is loaded with components optimised towards a single purpose. To see launch titles use the full power of the PS3 would be... extremely suprising.

Re:Have to hand it to Sony.

[Anonymous Coward]

This sound eerily similar to the dreamcast, eh? Hopefully Microsoft wont pull out the market early.

Re:Have to hand it to Sony.

[orderb13]

Weren't they planning on launching in spring of '06? Which means they have less than a year to get that deadline.

Re:Have to hand it to Sony.

[drsquare]

If it can only render at 5 frames per second, and needs to be displayed at 60 frames per second, then it's not being rendered real time. Rendered real time means it's being rendered as it's being displayed. I.e. if it's playing at 60 fps then it's being rendered at 60 fps. By your logic, if I use a tiny computer that takes six hours to render each frame, and then put them all together at 24fps, it's being rendered in real time...

Re:Have to hand it to Sony.

[topper24hours]

I wish that good movies sold movies too and not just big names. Unfortunately that's just wishful thinking - most shitty films w/ big name actors do FAR better than great, meaningful, artsy films w/ no namers. Sorry to burst your bubble...

Re:Have to hand it to Sony.

[Anonymous Coward]

KillZone was a pre-rendered Maya animation done by an advertising agency under the art direction of guerilla's lead artist.

its not in game footage, and thats a cold hard fact.

you've been had.

Judging by Sony's record

[EmperorKagato]

If they decide to take a $1 Billion dollar loss they should make sure this time no extra finances will have to go into system recalls, fixes etc.

I have a strange feeling that two giants may fall hard from a war this huge.

To bad that SEGA isn't around there

[DrYak]

I just think it's too bad that SEGA isn't around anymore in the console market.
With more constructor on the market : more concurence and thus even better prices and more efforts to put out something inventive.
Too bad they never learned to do good marketing to better sell their products. They did have some quite descent consoles in the past (IMHO: Genesis/MegaDrive and DreamCast were good, not to mention the fantastic hack-ability of the latter. Saturn would have been ok too, if only more titles have been translated from japaneese)

Or maybe am I just a little nostalgic ?

Re:To bad that SEGA isn't around there

[NiteHaqr]

QUOTE"Saturn would have been ok too, if only more titles have been translated from japaneese)"

Maybe they had problems with finding people who spoke "japaneese" ?? :)

Re:To bad that SEGA isn't around there

[Anonymous Coward]

you're such a twat. Everyone knew what he meant, there was no need to pull him up over something so stupid.

This is the problem with the slashdot ( and the internet in general )... too many nazi's like yourself.

Re:To bad that SEGA isn't around there

[dahlek]

Yeah, that's too bad - I used to follow this stuff much more than I do now, but it seems that any company that releases a system too far out of sync, sinks. The Dreamcast was too little, too late. Had they waited and released a better system in time with the PS2 and XBOX, with full backward compatibility, they might have had something...

They make good product from a technical standpoint, but make really bad business choices. The 32X was great - it really turbo charged the GENESIS, I know, I was one of three people to buy it. At $150, it was a pricy upgrade - cheaper would have been better. Timing, again, sucked, again, an "in between" system. With promises that the Saturn would be able to play 32X titles, it might have seemed like less of an in-between system, and therefore less of a risk to the consumer, and more like what it actually was - the SEGA's answer to the SuperFX chips and the last generation of SNES games, which were technically fabulous.

The SegaCD was another example - good hardware, bad everything else. SegaCD added graphics abilities as well as a cd-rom drive - abilities that more than matched the special mode 9 scaling and rotating abilites that the SNES had - did anyone know this? Their marketing department should be shot. A Saturn _should_ have been an updated SegaCD/32X system. Why would SEGA become their own competition, by having two systems relatively close in all but hype?? If they wanted to go the upgrade route, good for them! How wonderful to gradually increase the power of their system. If they wanted to make an entirely new system, then they should have just left the GENESIS alone and concentrated on the Saturn fully. They could have resold "new" units being the equivilent of a fully upgraded GENESIS and called it Saturn or something...

And what about the Nomad? Why don't I have a Nomad, that's 1/5th the weight and 1/3 the price of the original? If Nintendo can keep their portable gaming stuff going, why no one else? Why does SEGA drop the ball?! They had an incredibly powerful portable system, with a HUGE library! SEGA, where is your damn brain!?! Most people have never even heard of a Nomad!

Oh well...

dahlek

Re:To bad that SEGA isn't around there

[Anonymous Coward]

You don't need the apostrophe to make "Nazis" plural.

Um?

[oGMo]

People seem to be taking this for gospel, when both numbers are analyst estimates.

Of course, retailing for $399 on lauch is probable: in Japan, the PS2 retailed for about this. When it came here, it went for... $299. The PS1 retailed for $599. When it came here, it went for... $299.

So let's wait for a real number from someone with a clue, as opposed to an analyst.

Re:Um?

[faust2097]

Yeah, like most of the time we have misleading headlines and article.

Most analysts thought there was no way the the PSP would be less than $350-500 when it came out. Analysts are the people who were saying "Apple should become a software company" in 1996. Anaylists are the people who saw "significant upside" in Pets.com and Webvan. More recently, Merrill Lynch [who issued this report] paid $35 million in penalties for their involvement in the Enron scandal.

Also, the "go underground" thing was in reference to SCEE [Sony Computer Entertainment Europe] and the teams working on stuff like Killzone. Sony has an uncanny knack for taking the wind out of their competitors' marketing sails at very inopportuno moments.

Re:Um?

[oGMo]

Very much. If most analysts were right, Apple, BSD, the Internet, and Linux would be dead. Assuming Sony doesn't know what MS is doing, doesn't have a strategy, and isn't aware of the market isn't just naive, it's idiotic. Not to say they can't make mistakes or haven't; but Sony is not completely stupid, and has a bit of experience with this here marketting thing.

Maybe even a bit more than your average slashdot naysayer.

Re:Um?

[HazukiRyo]

The PlayStation and PlayStation 2 were both released for the same price in Japan--39,800 yen, about $380. Sony people in Japan are reportedly saying that they're aiming for the same price with the PS3.

You're right that the PS3 probably won't be $400 here, though. The last two were released for $300 here, so I'm predicting it will happen again with the PS3.

Ahem!!!

[alvinrod]

From article:

It is normal for game companies to take a loss on hardware whenever a new console launches, since they typically focus on acquiring market share rather than generating a profit during the first year. During the second year and afterward, they can recover the losses with the savings that come from mass production and with licensing fees from publishers.

Nintendo will probably launch the Revolution somewhere between $200 and $300 and still manage to make a profit on every console they sell. A while back there was an excellent article on /. that explained how Nintendo's business model was different from Sony and Microsft, and that even though they came in third place against the Xbox and PS3, they were still the most profitable.

For Sony to release a console after Microsoft and for a higher price could cause problems for them like the article stated. Microsoft has deep enough pockets to launch the console at around $350 when it comes out and cut it down to $300 when the PS3 launches. They'd be taking some huge hits in the pocketbook, but it would probably get more people to buy Xbox 360's.

However, as illustrated with the PSP, some people will buy something no matter how much it costs just because they want it. Sony is really going to need to count on its fan base to help out a lot.

Re:Ahem!!!

[greymond]

A while back there was an excellent article on /. that explained how Nintendo's business model was different from Sony and Microsft, and that even though they came in third place against the Xbox and PS3, they were still the most profitable.

I think the major reason for Nintendo needing to have an entirely different business model than Sony and MS, comes from the fact that Sony and MS create, research, develop, etc... a lot more consumer electronics, software, and participate in so many different markets making rediculous amounts of money that they can have one of their singular divisions tank financially in order to gain market share.

Nintendo on the other hand does not do anything other than make video games. They can't possibly ever take even a chance of tanking financially to grab market share, because they don't have other divisions bringing in any funds. I mean when was the last time Nintendo had it's name on a PC, Monitor, Stereo, TV, DVD Player, Cell-Phone, MP3 Player, let alone an OS and Office suite?

Cuz, you know

[mcc]

Since Merril Lynch owns Sony and all... they'd know what Sony plans to charge for things...

Right?

Oh god

[Anonymous Coward]

Watching anime is hardly the same thing as studying Japanese.

Both of you.

Distinction: Government Subsidies

[reporter]

When a company sells a product below cost, such behavior is consistent with free-market principles except in 2 situations: government subsidy or monopoly. When Korean companies like Hynix sell their memory chips at very low prices (or at prices below cost) in the USA, Hynix is receiving financial support from Seoul so that Hynix can afford to sell at a loss or at no profit. Such financial distortions (which are common in Korea) materially impact the American economy because Washington opens the American economy to "free" trade with Korea.

The other situation that is prohibited is for a monopoly to sell a product at a price below cost in order to destroy the competition. In such situations, the monopoly aims to destroy the competition so that the monopoly can, at a later point in time, dramatically raise the price of the product to reap monopoly profits. Such actions also hurt the American economy.

Except for these two problems, there is no issue with companies using selling-at-a-loss to gain market share. IBM sells its server hardware at zero profit or at a small loss in order to reap the profits from a service contract. Sony sells its Playstation at a loss in order to reap the profits from software sales. Neither IBM nor Sony is a monopoly. Further, neither IBM nor Sony (unlike Korean companies) are being subsidized by either the American or Japanese governments.

They want YOU to get addicted

[xiando]

Gilette did it with razors.
The printer corps do it with printers.

1. Sell some product which addicts you to something cheap.
2. People must buy more of your razor-blades, printer-ink, games/controllers,
3. ???
4. Piles of profit.


Anyone know a Playstation owner will spend at least ten times what the console cost on other things.

Re:They want YOU to get addicted

[Durinthal]

Well, if they buy $400 worth of accessories like additional controllers, a headset, a camera, etc.. they'd still have to buy 60 games at $60 each to make 10x the console cost.

Re:They want YOU to get addicted

[Emetophobe]

Anyone know a Playstation owner will spend at least ten times what the console cost on other things.

I would agree with that. I bought a PS2 a few months after they first came out, I currently have around 35 PS2 titles. Plus controllers, their crappy 8mb memory cards and a cheap remote control for watching dvds, the total adds up over the years..

Re:They want YOU to get addicted

[DroopyStonx]

That's what mod chips are for, my friend.

Re:They want YOU to get addicted

[Anonymous Coward]

the ps3 is using bluetooth for connecting hardware.

this means that you can connect and use your mobile phone to do anything if youre to cheap to buy decent controllers or remotes

Re:They want YOU to get addicted

[ckaminski]

I've got a $60 PS2, no spare controllers, a multitap (go figure?) and 4 games, all purchased used @ less than 1/2 original retail, and two new memory cards.

I buy all your used shit.... :-P

Re:They want YOU to get addicted

[Anonymous Coward]

This is the stupidest comment I have had read on /. to date. Congratulations. Now I'm gonna replace my mouse with a printer because they both use USB.

Re:They want YOU to get addicted

[drew]

Anyone know a Playstation owner will spend at least ten times what the console cost on other things

Maybe some playstation owners do. I doubt I've spent even the cost of the console since I bought it. I paid for one extra controller and a memory card, and I have about a half dozen games, only one of which cost me more than $20. I know quite a few other playstation owners who are the same way. One of my best friends has a PS2 that only gets used for the three Grand Theft Auto games. Everything else he plays on XBox or on his computer.

If Sony really does take a $150 dollar loss on each console, and makes $10 per game sold in licensing fees, how many games does the average customer have to buy for them to even break even? How many guys like me and my friend does it take to make that proposition highly improbable?

Ink cartridges and razor blades are consumables. They will run out in a fixed amount of time, and people will have to purchase more if they want to continue using the product. Games don't ever run out, so Sony gets no dependable recurring revenue stream from their loss leader.

Re:They want YOU to get addicted

[Anonymous Coward]

why is that stupid?

while it is not exactly the best option to play a game with the keys on your cell phone, it demonstrates a point.

since they use bluetooth i can connect my old keyboard and mouse to it. no need to buy branded sony hardware.

Where do we go from here? Is it all worth it?

[TheHarker]

Really? I am getting really bored with this console hype. The online thing looks promising (Animal Crossing DS looks like it'll be a revelation).
The fact that I only ever play Winning Eleven these days it quite telling. I hope Nintendo and Mr Gates do undercut Sony, just to freshen things up a little

Re:Dumping - legal?

[Anonymous Coward]

Isn't dumping illegal?

$100 more than the Xbox 360? Ouch.

[AvantLegion]

Microsoft has already confirmed that they're targeting the $299 price point, and have said that it will definitely be "in the neighborhood of $300" (translation: definitely shooting for $299 but not yet ready to commit to it).

Not only is that $100 less, but by the time the PS3 launches, the Xbox 360 will be out long enough to cut its price. It could conceivably go down to $250-275.

For the casual gamer that isn't necessarily married to the Sony brand label, the 360 price point will certainly look much more attractive. To the slightly more technical buyer, one would note that the PS3 price doesn't even include the damn hard drive (sold separately!), while the 360 does.

I don't see a really good "win" scenario for Sony here. If they do price competitively with the Xbox 360, then they'll be taking losses per unit that blow away the losses MS was taking with the original Xbox (and those were crazy enough that MS built their new console with keeping losses in control - and apparently have succeeded).

There's still plenty of Sony faithful that want their Final Fantasys and Metal Gears, but Sony could stand to lose a huge share of the massive casual fan base that made them the #1 console seller this past gen.

(This post was written by a decidedly non MS cheerleader - he likes Ubuntu, Gentoo, and Apple)

Re:$100 more than the Xbox 360? Ouch.

[GutBomb]

dimwitted analysis? this is analysis buy a guy that is probably going to buy one of these systems. not some old dude in a suit sitting in a boardroom trying to figure out how guys like him think.

This kind of analysis is important because it cuts through the bullshit and we hear actual opinions from the actual people who are in the market for these products.

Re:$100 more than the Xbox 360? Ouch.

[badboy_tw2002]

Unfortunately half his facts were wrong. That makes it "uninformed." It was informative that the average person is misinformed, but the analysis itself was not useful beyond that.

Re:$100 more than the Xbox 360? Ouch.

[Anonymous Coward]

You must be bitter that you will have to flip burgers at minimum wage for about 87 hours before you can pay for your PS3 while your buddies play their XBOX 360 for months with the games they were able buy with the $100 they saved by not buying the PS3. :)

Re:$100 more than the Xbox 360? Ouch.

[Anonymous Coward]

What facts were wrong? What about it is uninformed?

I love it when slashbots say something is wrong but don't provide any proof.

Re:$100 more than the Xbox 360? Ouch.

[gabebear]

Sony won't let themselves get priced out of the market. When the PS3 ships it will be priced at whatever the 360 is priced at. The $400 was predicted by an anylyst, the same ones that said the PSP would be $350. Given that the 360 is including a HD it's likely to cost more to produce.

I think Microsoft will only initially ship every 360 with a HD so that it will be able to play XBox1 games, then remove it to compete on price with Sony's PS3. The backwards compatability won't be so critical once MS has a library of 360 games.

Re:$100 more than the Xbox 360? Ouch.

[AvantLegion]

Given that the 360 is including a HD it's likely to cost more to produce.

Nope - analysts predict a $75 loss per Xbox 360 sold at $300 (so, a price of $375 to manufacture). While the article in this story is saying just a hair shy of $500 to manufacture a PS3 unit.

Keep in mind, not only did Sony sink a ton of money into Cell R&D, but they're also packing in a Blu-Ray drive, and those easily spank the cost of the hard drive at this point in time.

You're right that Sony could end up pricing right alongside Microsoft - I even said that. I also pointed out that doing so means taking MASSIVE losses per unit. It could happen, but the losses won't be so easily sneezed off.

Re:$100 more than the Xbox 360? Ouch.

[MBraynard]

Know what else you can probably count on? 360 will be releasing H3 on the day of the PS3 release. Want to also wager that there will be a price cut and a package deal for H3 on the same day, too?

Re:$100 more than the Xbox 360? Ouch.

[gabebear]

Nope - analysts predict a $75 loss per Xbox 360 sold at $300

Quoting another analyst doesn't give your claims any more validity, it's WAY to early to be talking about console prices in any kind of absolutes. There is no way any of these analysts know what Sony or Microsoft are going to be getting their parts for, much less what they spend on the parts they manufacturer themselves. At best these analysts' predictions are educated guesses, at worst they are outright lies.

The $494 price tag was reached when Merrill Lynch Japan estimated that the PS3's main components( Cell chip, RSX, and BD-ROM drive) would cost about 11,000 yen ($101) each and the other components would make up the rest of the 54,000 yen . That was a rough estimate, which was probably very wrong. I can't find how the analysts at the UBS investment bank determined that the 360 was going to cost $375 to manufacter, but I imagine those estimates are even more bull shit than Merrill Lynch's figures.

Re:$100 more than the Xbox 360? Ouch.

[MyLongNickName]

XBox = Microsoft. Therefore, his facts are wrong since he came out saying that Microsoft is doing something smarter than another company.

Need any more proof?

$399 retail.

[Anonymous Coward]

$399 is retail price. Which means - at this price the retailer needs to take a cut. If the bill of materials is $500, then they'll be subsidizing by between $200-$300 per unit.

Re:$399 retail.

[TheLoneDanger]

I may be mistaken, but I believe that large retailers generally agree to not make any (or much) money on the sale of the console initially. This makes sense from a retailers POV too because it's better to sell more $50 games and make $25 per game (plus accessories sales) than to make $50 per console sale, but sell less consoles. This in turn causes everyone else to fall into line, because if Walmart is selling for $299, then why would the average consumer go anyplace selling it for even $10 more? (Yes, distance, Walmart is evil etc., if any of those reasons really affected people more than price, Walmart and other big retailers wouldn't be as powerful as they are.)

Re:$399 retail.

[BigumD]

You're a bit uninformed. The price margin for retail on consoles is less than stellar. It's maybe, MAYBE, $10 a unit. And that's a great margin.

Re:$399 retail.

[Shadow99_1]

Sicne I work for a retail chain (I'm the head of the Software/games department for my store FYI), I cna say that each generation we have bougth the systems for more than we sell them for and that this lasts for up to two years per system...

It's one of the reasons upper management is so uptight about demanding we sell games, accessories, and service contracts on each and every new system we sell... For both the first year of the Xbox and the PS2 both systems cost us $40 more than we sold them for... Most people will also refuse to get any of the three things I just mentioned we use to make up this loss because they already feel the system itself is expensive and don't believe they should have to pay more to make it usable. I've seen someone who owned no games for a brand new system demand that it was extortion because we said he wouldn't eb able to do much of anything with it without something to play on it. That means we took a hit every system we sold... and corporate smiles happily at these losses because in reality the manufacturer gives them truck loads of cash for helping to 'market' these new systems so in the end at the corporate level we break even, but the stores themselves loose money...

Re:$399 retail.

[shagism]

In my experience Sony and Microsoft rent out space for their products and pay the retailer a set price for the space so that the units will remain the same price wherever

Eating their own words?

[moankey]

Isnt this the same company that laughed at M$ when they came out with Xbox with the same model of losing money on the hardware and making it up with games?
Seems even though Sony claims Xbox has not hurt their sales and is not a threat, taking up this give away the razors and make money on the blades approach says otherwise.

Re:Eating their own words?

[Anonymous Coward]

Microsoft never made money off the Xbox. They started to turn a profit, but they were still billions in the hole.

Four hundred dollars?

[huge colin]

Buy a computer! It'll do a lot more than a game console.

Re:Four hundred dollars?

[Anonymous Coward]

a four hundred dollars computer? ... ... Nice try ;-) (ie: Doom3 on xbox not spending mega$$$$)

Re:Four hundred dollars?

[toy4two]

Having just spent 4 hours setting up my laptop to play Madden 2005 I can honestly say after about 3 hours I was ready to throw the laptop out the window , return the Madden 2005 ($20) and return the Wireless Wingman Rumblepad 2 ($40) and just put the money towards a PS2 ($150). It is SUCH a pain in the ass configuring the controller for every single game, getting the video card to output on S-video out, and switching between mouse/keyboard just to launch the game. Then doing all the configuration all over agian for a different game, different resolution, different buttons (if it even supports gamepads). I thought I would just set it up once, then lay back on the couch and play, FAR FAR from it.

Re:Four hundred dollars?

[linguae]

A game console is a computer, just specialized to play video games and with very great graphics features. The PS3 even has USB ports. Try getting the same Cell processor and same graphics card in a $400 PC. However, nothing is stopping a skilled person from porting an operating system (like Linux) to a PS3 or any other console.

Somebody is bound to port Linux/NetBSD to the PS3, and with a hard drive, you can turn your PS3 into a full-fledged *nix-computer, just with a smaller (and nicer-looking) case. All you need is a hard drive, some way to install Linux on it, and a USB keyboard/mouse.

Re:Four hundred dollars?

[CronoCloud]

No, it won't

http://playstation2-linux.com/

Re:Four hundred dollars?

[CronoCloud]

That somebody porting Linux is Sony.

I'd lay serious odds that they've already got some kind of Linux running on preliminary hardware. I know IBM has Linux running on prototype Cell based servers and they've already submitted Cell patches to the kernel.

Then there's this, which says Linux will come pre-installed on the PS3 HD:

http://games.slashdot.org/article.pl?sid=05/06/10/ 145227&tid=10&tid=106

Oh No!

[StevenHenderson]

The PS3 goes underground until it comes out next year.

OH NO!!!! Just like teh War of the WorldZZ!!!!!1

Worth It For HD

[DeadBugs]

If Sony comes to the market with the first High Definition DVD player in it's PS3, $399 would be a steal of a deal.

My first DVD player was $300, I can only imagine what the first HD-DVD players will cost.

Maybe they will even bundle a 1080p version of Spider-Man 2 to with it.

Re:Worth It For HD

[lee1026]

I was under the impression that they were going to use blue ray instead of HD-DVD.

Re:Worth It For HD

[Anonymous Coward]

Since even the new Samsung 1080p televisions that are coming out won't accept 1080p inputs (they interpolate 1080i and 720p up) I doubt that there will be any media to match. I think that pushing the PS3 as a combo game/Bluray player could justify the premium. It will depend on there being media available in Bluray format.

Re:Worth It For HD

[DeadBugs]

I was using HD-DVD as an acronym for High Definition DVD not for the competing standard. Blu-Ray with it's increased capacity can hold high definition video. The "HD-DVD" format calls for less storage but uses a higher compression to store high definition video.

The main reason I support Blu-Ray over "HD-DVD" is that eventually writers will show up for computers and I want the larger storage format for back up purposes.

Re:Worth It For HD

[orderb13]

If they take an HDMI or DVI input then they will take 1080p.

Sega Saturn launched at 400 Dollars...

[marcybots]

The sega saturn launched at 400 dollars, but of course a inept marketing campaign, launching at "select retailers" instead of everywhere, and games that were rushed to market when it was released 3 months early to prempt the playstatoin didnt help either.
Just because the sega saturn launched at 400 dollars doesnt doom the PS3, but launching it with to few games combined with a expensive price tag will....the Xbox 360 will be a 100 dollars cheaper...that is a big advantage for me.

Re:Sega Saturn launched at 400 Dollars...

[Anonymous Coward]

Still waiting for uranus http://www.psps4free.com/default.aspx?r=422358

If you can still type

[Anonymous Coward]

That was one weak-ass hit of LSD. Ask the elf for your money back.

Nintendo focused on limited monopolies

[alexhmit01]

What was smart about Nintendo, is instead of joining the fray and getting bashed by Sony and Microsoft (three companies in cutthroat competition means profits drop considerably...) Microsoft didn't make any money, and Sony didn't mint money the way they did with the Playstation.

Nintendo took their limited Monopolies (Mario, Metroid, Zelda, Pokemon, etc.) and pushed them into that market. They made money along the way, kept their costs down, and sold most of their own titles. Sony/MS make something like $8/game on third-party games. Nintendo makes considerably more per game.

Even if customers bought fewer games/console, Nintendo probably made more per customer, and wasn't trying to recover a $100/customer acquisition cost.

Sony ONLY makes money on its fan base. A recreational player that buys a few sports games each year will never pay Sony enough in its fees to cover the $100 Sony spent subsidizing their hardware.

HOWEVER, in this case, Sony has another advantage. Getting the PS3 out means getting Blu-Ray DVD players into millions of homes. When the HD-DVD crew comes out with their $1000 HD-DVD players, and Apple and Sony have moved their Blu-Ray DVD machines (including Apple machines that will no doubt let you burn HD Blu-Ray DVDs of your kid's little league game), this might be the first time that the superior technology wins DESPITE being backed by BOTH Apple and Sony... :) I loved Blu-Ray, and was saddened to see adoption by Apple, because I feared that it would go like Firewire/iLink that Apple/Sony managed to kill through poor technology marketing (they both rock at consumer marketing, but technology marketing is NOT their strong point). Note, I am typing this from my Powerbook. :)

Alex

Re:Nintendo focused on limited monopolies

[ILikeRed]

I think the firewire failing had more to do with the high royalties that Apple demanded than anything else... that was the reason why USB cards were going for 1/10th the cost of firewire cards for years - the silicone certainly did not cost any more to make. Apple and Sony are often just too greedy for their own good. That Apple resisted that temptation with iTunes songs still suprises me - I think they must of come up with the pricing while Jobs was out on a sick day.

Re:Nintendo focused on limited monopolies

[jizmonkey]

I think the firewire failing had more to do with the high royalties that Apple demanded than anything else... that was the reason why USB cards were going for 1/10th the cost of firewire cards for years - the silicone certainly did not cost any more to make. Apple and Sony are often just too greedy for their own good. That Apple resisted that temptation with iTunes songs still suprises me - I think they must of come up with the pricing while Jobs was out on a sick day.

Ironically, the royalty per port is the same as the price of an iTunes song.

I think it's a little revisionist to say the royalty multiplied the FireWire price by 10. More accurately, I think, is that manufacturers were scared away by the thought of having to pay a couple bucks per card and so the virtuous cycle of adoption/competition never started.

Re:Nintendo focused on limited monopolies

[Anonymous Coward]

Judging from your own link, I would say Apple's royalty is exactly what made the price so high:

Under the plan, a three-port physical layer 1394 chip that sells for less than $5 would incur an Apple royalty of $3. "You can't have Apple make more money from a 1394 chip than the semiconductor maker does," said the source

Re:Nintendo focused on limited monopolies

[nintendo_is_a_cereal]

I think another thing that helped Nintendo was how hard it was to pirate their software. If you wanted to play a GCN game you bought a GCN and the game. For example, my last roommate owned an XBox and he had a huge stack of burned games and almost no (if any at all) purchased games. I on the other hand had a GCN and a good 15 or so games purchased, the majority of which are first party Nintendo titles (meaning the money goes back to Nintendo even more directly).

Press The Buttons

[News for nerds]

Press the Buttons is reporting on a Pro-G article in which SCEE Chief David Reeves states that... ...what??

corrected:

Pro-G is reporting SCEE Chief David Reeves states that...

Anyone else getting deja vu?

[Namarrgon]

The original Xbox was late to the party, oversized, had weird controllers, was technically advanced, and cost way more to make than it sold for. The sleek PS2 wasn't, and didn't.

This time round, looks like it's Sony coming out second with the advanced yet fridge-sized beast & freakshow controllers, and it's going to really cost them a bundle, while the Xbox 360 seems to taking it more carefully...

I'm guessing that Nintendo will stay right where they were before though.

Re:Anyone else getting deja vu?

[News for nerds]

IIRC PS2 was thought as very costly with DVD back then. Xbox 1 arrived 1.5 year after PS2, so your comparison is weird anyway.

BTW, PS3 is not 'fridge-sized beast'. It's almost the same size as Xbox 360 and smaller than Xbox 1.
Just check out this pic.
http://www.ga-forum.com/showthread.php?t=50988

Re:Anyone else getting deja vu?

[kakibesar]

You forgot that the PS2 was sitting on a huge catalog of PS1 titles, and the PS1 was the most successful console of the 32-bit generation.

All Microsoft could say for the Xbox 360 was that "it'll play most of the top selling titles", which means that it's not fully backward compatible with existing titles.

Re:Anyone else getting deja vu?

[Starsmore]

All Microsoft could say for the Xbox 360 was that "it'll play most of the top selling titles", which means it'll play Halo2.

Fixed that for you.

Offer the Sony credit card.

[WidescreenFreak]

All that they have to do to recoup that billion is get their own PlayStation VISA, which will be approved to all applicants. You can pay for the PS/3 for 48 low monthly payments of $24.95 at only 27% interest! Hey, it certainly beats having to pay $399 + tax all at once, doesn't it?

Yes, that's partially sarcasm, but don't underestimate those who want it now and are willing to pay more over time with a manageable monthly payment. After all, look at how many people have store cards at 24% interest instead of regular Visa through a credit union at 12% or less all because it might be easier to get the store card! And, hey, it spreads out the payments, doesn't it? Sony could make a FORTUNE from their own Playstation credit card, if they don't have one already.

Re:Offer the Sony credit card.

[Shadow99_1]

They already do offer Sony credit cards... take a careful look at their website some time... It's not Playstation specific, but then again theyed rather you buy one of their $5000 TV's than a PS3 on that card...

Re:Offer the Sony credit card.

[WidescreenFreak]

Granted, but could you imagine if they offered a card with the terms that if you have a job or if you are a student, you get the card regardless of credit history or lack thereof at some excrucitingly high rate meant specifically for PlayStation, its games, and its accessories? People will go for it in DROVES because it will help them to avoid the huge $400 one-time purchase. You can't tell me that their current card can be acquired by anyone who asks.

Re:Offer the Sony credit card.

[chez69]

so what do they do when the person doesn't pay? Even Sony can't afford to hire thousnads of goons just to go to repossess the units of the folks that didn't pay. There are plenty of folks that, for whatever reason, blow off their credit card payment.

Re:Offer the Sony credit card.

[WidescreenFreak]

...and get a black mark on their credit rating as a result. Besides, most bad debt is pursued by collection agencies, not the companies themselves. The collection agencies then keep a portion of what is recovered to cover their costs. Sony would most likely not do anything and instead tell a collection agency, "Here's the data. Get what you can." Very few companies actually do their own negligent payment pursuits. Bad debt is also a tax writeoff, so it's not a total loss.

Not downplaying what you've said as you are correct, but it's not as much of a financial loss to Sony as you are implying. And there are far more people who do honor their debt agreements than those who don't.

Re:Offer the Sony credit card.

[Politburo]

The bankruptcy laws were recently re-written to favor corporations, specifically credit card companies.

Re:Offer the Sony credit card.

[Anonymous Coward]

Hello? MNBA?

Getting a corporate-brand credit card (or just a credit line) doesn't actually mean managing all that crap. It just means partnering with some other company (Apple uses MNBA, for example) and letting them handle the details. The brand-provider gets a cut for driving business to the CC company, the CC company gets a cut of every purchase + interest, and everyone lives happily ever after, except the suckers who run up $4k on their 24% interest PS3 card.

Re:Offer the Sony credit card.

[Shadow99_1]

No, but then again no bank would ever let them hand them out like candy that way... It's still a high intrest (something like 27% I believe) card with a fairly low point of entry (don't have to make huge amounts of money or have the best credit to get one) though.

Underground until next year?

[Xian97]

I really can't see that happening. If the Xbox 360 is going to launch this Christmas season, I doubt if they will keep quiet and not provide more PS3 details to dissuade people from buying the Xbox and give them a reason to hold out until the PS3 release.

Inflation

[tepples]

Selling games for $60 is not a new thing in Japan.

Japanese gamers tend to have more disposable income.

The Nintendo 64 proved that $60 is too much money for an American consumer to spend on one game.

There will also have been 10 years of wage inflation between the PS1/N64 generation and the PS3/Revo generation.

Re:Inflation

[Anonymous Coward]

Wow, luminesweeper. I expected to run that on my Sorny PalyStation Potable.

Games cost $60 because of non-innovative copycat "homebrew" developers like you.

Predatory Pricing

[tverbeek]

I seem to recall that once upon a time they passed laws that made it illegal to sell something below cost to steal market share from competitors. It was called "predatory pricing". While Sony's probably staying within the loophole of the law, the principle's the same. And of course the US DoJ doesn't even enforce the law when it's blatantly predatory (e.g. IE taking over the browser market).

Re:Predatory Pricing

[WillAffleckUW]

I seem to recall that once upon a time they passed laws that made it illegal to sell something below cost to steal market share from competitors. It was called "predatory pricing". While Sony's probably staying within the loophole of the law, the principle's the same. And of course the US DoJ doesn't even enforce the law when it's blatantly predatory (e.g. IE taking over the browser market).

That was back when capitalists were in the White House. They're all gone.

Re:Predatory Pricing

[bogjobber]

As far as I understand it, the only way it is considered "predatory pricing" is when they later raise the price after their competition has been driven out of the market. Then they are acting as a monopoly. So in the case of IE, it wasn't predatory pricing because of the fact that IE is still free. Bundling IE with Windows for free was not in violation of any laws as far as I know. There's nothing wrong with augmenting your operating system with a free web browser, even if it did kill your beloved Netscape.

Re:Predatory Pricing

[Anonymous Coward]

I seem to recall that once upon a time they passed laws that made it illegal to sell something below cost to steal market share from competitors. It was called "predatory pricing".

Only for monopolies. Besides, in many cases it's impossible to determine what the manufacturing cost for a product is - think e.g. about fast food, there's a reason why it's also called junk food: the ingredients cost almost nothing compared to the cost of maintaining the capability to serve it, i.e. rent, employees and so on and the fact that a lot of meat is thrown away every day at many hamburger joints because it gets old - the meat is so cheap compared to the price a customer pays that maintaining the capability of always being able to serve customers is worth it even if only half of the meat in storage is ever used (so how do you factor that into the cost of one sold hamburger?).

Re:Predatory Pricing

[poot_rootbeer]

I seem to recall that once upon a time they passed laws that made it illegal to sell something below cost to steal market share from competitors. It was called "predatory pricing".

Do we really want these laws being enforced against Free software projects, though? I don't want to see the Mozilla Foundation getting prosecuted for giving away Firefox for $0, on the basis that it discourages people from spending $X>0 to buy Opera...

Re:Predatory Pricing

[megarich]

the loophole here if you ask me is that we're talking about 2 companies with seemingly unlimited pocket books in their corner and thus neither one of the two will drive the other one out of business in our lifetime.

of course nintendo could possibly be knocked out by this but i guess so long as you have 2, that's competition enough for the gov...

Re:Predatory Pricing

[Anonymous Coward]

Only for monopolies.

Mod parent -1, Stupid.

Monopolies can't enagage in predatory pricing, because they have no one they're competing against.

Re:Predatory Pricing

[tverbeek]

Monopolies can't enagage in predatory pricing, because they have no one they're competing against.

I'm reposting the above comment, because (despite its down-modding) it's a valid point.

Re:Predatory Pricing

[JahToasted]

A hamburger isn't a PS3, dude. And you're arguing the meat is worth less than the price you pay for it, so how can that be predatory pricing? Cost of Hamburger > Price I pay = Not Predatory. Cost of PS3 Ok you used a poor example. Sometimes it may be difficult to tell the cost of an item. But this isn't one of those times.

Re:Predatory Pricing

[Anonymous Coward]

One of the factors of predatory pricing is that you're selling stuff for below the cost to produce it. If the cost to the Mozilla Foundation for development of Firefox is $0 (because technically it's all free[beer] code), and the price can never be jacked up (because it's free[speech])...?

gtfo

[speel3k]

399 your sick in the head seriously and this really pisses me off i dont want to spend 400 on somthing to play games i rather play ps2 but if this is the real price im going to switch to xbox and if thats 400 well.. damn

Re:Predatory Pricing ... not quite.

[WidescreenFreak]

...or XBox. Microsoft admitted before the XBox was released that they were losing $100 per unit sold. Hell, I wanted to buy one just to make them lose money. :)

Actually, I don't think it's predatory as long as it's still competitive. If a price is dropped so low that competitors simply can't compete with the price at all, that is almost certainly in violation of anti-trust acts. As long as there are viable alternatives that are still in the same price range, I don't believe that such actions are illegal.

Moreover

[mcc]

I saw this link a few days back, and I haven't been able to red the report, but I really think Merill Lynch is kind of looking at some things as unit costs that really ought to be considered to be sunk costs.

Example: They're assuming $100 the Bluray Disc player. A DVD player would be... what, I dunno, definitely less? Let's make up a random number and guess that they're spending $80 more per unit because they went with Bluray instead of DVD. Except wait a minute. Does it really make sense to lump this in $80 or whatever in with the per unit cost of the PS3? For one thing, this money is subsidizing the portion of Sony's business that's interested in selling Bluray drives and discs, and that's something Sony has a lot of money riding on. For another thing, I'd assume one of the main reasons the BD drives are so expensive is that they are new and unproven technology. But the PS3 manufacturing itself will help to break the technology in. To some extent by spending this money on the BD drives for the PS3 to break in the production lines and all, Sony probably is relieving money that it will have to spend later on manufacturing BD drives for other consumer products. To some extent that $80 per bluray represents a sunk cost that Sony would have had to have paid anyway for other purposes.

So I question how important these numbers are. If you look at previous Sony Playstations, Sony's been pretty good at the whole thing of bringing down production costs relatively quickly. If they can keep this up they can probably afford to just eat a high production cost since they know their costs are eventually going to come down.

Early adopter tax?

[tepples]

the "First on the Block" tax. Perfectly voluntary.

Do you claim that TV itself is voluntary once the FCC cuts off analog TV and the price of an ATSC converter box is still above $200? Watch you be shunned at work because you can't talk about the NCAA bowl games that were broadcasted just after the cutoff date. And watch you not find out about the tornado warning, especially given that the government wants to dismantle free NOAA services such as weather radio.

Re:Early adopter tax?

[MyLongNickName]

Huh? If you have an axe to grind with something the FCC did, post in a thread that related. All I am talking about is the general nature of electronics pricing.

Re:Early adopter tax?

[KillerDeathRobot]

Your rant is rather off-topic, but I don't watch tv and I'm never shunned at work. In fact, I wouldn't watch the NCAA bowl games anyway, but that's perhaps a separate issue.

Re:Distinction: Government Subsidies

[rcs1000]

"Hynix is receiving financial support from Seoul so that Hynix can afford to sell at a loss or at no profit. Such financial distortions (which are common in Korea) materially impact the American economy because Washington opens the American economy to "free" trade with Korea."

What absolute rubbish. Your disregard for the facts is astonishing, and you've never taken Economics 101. Which fallacy would you like me correct first?

Lets start with Hynix recieves financial support from the Korean government. Well that'll be just like Boeing in the US. Or, indeed the entire US sugar industry. Or, for that matter, most farmers in Europe and the US. Result: the US and Europe dump aeroplanes and food onto countries, stifling their own food/aeroplane businesses.

But this is besides the point: the World Trade Organisation recently concluded that the South Korean state (which bailed out Hynix in '02) was no where near as guilty as people claim. Hynix also no longer recieves any subsidy from the Korean government.

(If you think the government bailing out failing businesses is wrong - and it is - then ask yourself when the US government recently spent 10s of billions of dollars proping up companies. Like the airlines.)

Anyway. I'm ranting. So I'll shut up.

Re:Distinction: Government Subsidies

[rcs1000]

Whoops. Sorry about all the bold. And I should have proof-read what I wrote.

What I meant to say was: (1) the WTO found that the US and EU sanctions on Hynix were not fair, and that the company - while the recipient of illegal state aid (re bail-out) - was not dumping. And (2) free trade is great. We, consumers, benefit from dumping. (And good government must always be run for the benefit of consumers.) Any economics textbook will tell you that dumping is insane and stupid. And the "dumper" loses.

Please mod my earlier comment as Flamebait (-1), and this as Insightful (+3).

Thanks,

Robert

hmm taking a loss eh

[Naikrovek]

if the gave it away for free they'd have near 100% market share.. ah maybe its just me that thinks so. can anyone hear me? is this thing EVEN ON?!

Don't Believe Everything You Read

[Modab]

Just because it has the name "Merrill Lynch" doesn't mean they know everything there is to know. The same people cast doom and gloom over the PS2 pricing, while Sony kept mum. After everything settled down, it turned out that when everyone thought that PS2 bled money with each unit sold for the first years, it was actually Breaking Even!

There are many many economies of scale that could potentially apply to the PS3, and the Cell. It's based on yield, true R&D costs, Blu-Ray DVD unit costs, and a slew of other things. And Sony has their finger in just about every part of that, meaning that it not only know exactly what those costs are, it can actively prevent them from getting too high. Too many faulty Cell chips? Sell them to put in Hitachi TVs that can make do with fewer SPEs!

*If* the PS3 sells for $399, I expect Sony will be making about $50 per machine. I expect the machine to sell for $350 give or take a few bucks.

Conviced PSP would sell out, not sure about PS3

[aka_big_wurm]

When PSP came out I spent hours in a short line, I thought it would sell out day one. But it did not I cost too much and as for games, were were they. The game that came out at launch were cookie cutter games nothing special.

At the launch of the PS3 the same cookie cutter games will be out and how long will it take for a killer app? This time when PS3 comes out I will be at home and I will wait till a good game is released.

By the way the PSP is worth it now, not for anything sony did but for the homebrews.

And the myth continues

[Ceallach]

Most consoles have NEVER been sold at a loss, and the PS2 made OODLES of profit from day one (enough to recoup the R&D costs within a year).

The Sega Saturn was sold at a loss and failed. The Xbox was sold at a loss but M$ could afford it. We'll see if the PS3 actually gets sold at a loss or not.

Don't believe me? The numbers and such are available if you search, or just read the Gord's little article ... http://www.actsofgord.com/Proclamations/chapter02. html

Re:And the myth continues

[Anonymous Coward]

And if we are to believe the article you link, then the GC was sold at a loss as well. For some reason, I don't trust Sony's claim they made money on each console. It's like them saying all their demos for the PS2 (before it came out) were real time. Just like they say their PS3 demos are real time now. Sony lies to look good. I have no doubt they used fuzzy "Sony Math" to separate themselves from MS. Let's face it, Sony has a history of misrepresenting facts to suit their hype and image.

Re:And the myth continues

[DeadScreenSky]

RTFA. Sony lost a lot of money on the PS2 during the first year (nearly half a billion dollars), no matter what some videogame retailer in Canada says on his website.

Re:And the myth continues

[Ceallach]

And if I remember correctly that was R&D costs, not losses on console sales.

The wonderful world of cost accounting

[mckwant]

R&D, at high numbers of units, goes to zero/unit. I'll extend your example a little bit:

DevCosts = $1000
Unit cost = $1

1000 units = $2/unit
2000 units = $1.50/unit
10000 units = $1.10/unit
100000 units = $1.01/unit

Marginal cost of R&D/unit is asymptotic (sp?) to the marginal unit cost. At the production numbers that the PS3 will likely reach, R&D costs per unit will approach nil.

There's a secondary issue in that it's unclear what else those development costs can be used for. If a tech demo becomes a viable PSP game, for instance, that'll eat into the R&D payout.

In addition, you can occasionally claim that R&D is basically sunk cost (money that would have been spent anyway), so it's irrelevant. I'd think that would be the case here. Those R&D guys were going to be doing SOMEthing, it just happened to be the PS3.

So, what business people tend to look at carefully is (selling cost - manufacturing cost)/unit. It keeps the math simple (which business people like), and keeps the really important margin as the top attention getter. This is just a slightly weird case, as it's the razor blade model.

Re:The wonderful world of cost accounting

[mangino]

The marginal cost of R&D is zero, not asymptotic to zero. Marginal cost is the cost it takes to produce one additional unit. Since the R&D is done up front, it is not a component of marginal cost.

When you look at total profitability, you would include the R&D expense amortized over the useful selling life of the product. Just because it occurrs up front doesn't mean it is accounted for up front.

Free crack pipe with purchase.

[djdavetrouble]

To loosely quote NWA:
Get a 10 piece, base pipe comes free

And the Nintendo will make a profit from day one

[WillAffleckUW]

Most people know that the xBox would lose MSFT money - they had to sell at least 10 games to recoup their loss on each sale. I bought one to play Fable on - and bought Lego Star Wars - and now I'll let my son get free used xBox games from his friends and watch all that MSFT money flow down the drain.

So if Playstation loses almost $100 per console for the PS3, and Nintendo has always made money on their consoles - who is really the winner?

I don't know, but I'm not buying the xBox 360 - I'll be buying either the Nintendo SuperHamsterCage - or whatever it's called - or the Sony PS3.

It's the games. xBox has virtually nothing to play on it that I like.

too pricey

[pizza_milkshake]

give me a console with less impressive hardware and costs $99 instead...

Re:too pricey

[dartboard]

So... buy a Gamecube?

Re:too pricey

[Anonymous Coward]

I always found it hilarious that a brand new GCN costs less than a new GBA. Hell thats the whole reason i bought a GCN...well..that and windwaker.

Re:too pricey

[burndive]

Funny. The whole reason I bought Wind Waker was for the bonus disk.

Re:too pricey

[Anonymous Coward]

What is it with you idiots and your ill crafted acronyms? GCN? "Yes, I'm going to go play my Gamecube Nintendo. It's excellent!"

How about instead you go hook up your "PSX" to your anus and jump off a bridge.

Thanks!

Not quite

[Average_Joe_Sixpack]

Printer ink and razor blades are consumables. Sony is hoping to make their profit on 3rd party licensing and their own media sales.

Re:Not quite

[Anonymous Coward]

don't be silly. facts shouldn't get in the way of the average slashbot.

I disagree (I think)

[Infinity Salad]

Going 'underground' with the PS3 is probably a good idea, for the simple reason that any exposure right now would be compeletely overshadowed by the XBox 360.

If they keep the hype up while 360 is coming out, the PS3 will be 'familiar' to the public and they won't be as impressed when it actually comes out (i.e. old news = boring). By staying off the front pages now, it leaves them the option of exploding onto the stage after the 360 release-hype has died down.

Maybe you are not the target market

[Secrity]

It is likely that "poor college kids" are not Sony's target market for this product. It could be that Sony is going for the more lucrative older people with a job and disposable income market. I can see business software, travel, credit card, some automobile, and maybe cell phone companies busting ass to get the college kid market in order to try to get a brand recognition and loyalty established. Playstations already have brand recognition and if they have the games, they will have the market. Sony is trying to sell games by subsidising their game console, they are NOT subsidising a general purpose computer and DVD player. "Poor college kids" don't have the disposable income to buy the $60 games that makes it profitable to subsidise the console. Maybe in a few years the price will come down to the point where you will be able to afford it.

O/T

[th3space]

Speaking of, when does Everyone Loves Katamari come stateside? Does anyone have any clues?

Re:O/T

[l.b. noire]

I don't know but I hope it's better than the Everyone Loves Raymond game I bought. God that sucked!

Re:O/T

[generic-man]

EB says October 4. All I know is that it will sell for $30, a 50% markup over the original's US price.

A credit to society

[Heffenfeffer]

It's scary just how much credit card companies make these days - and if Sony put out their own credit card (like the one Apple has on everything from the Shuffle to the dual G5) they would likely make a killing on interest alone.

I went and found a Credit Card Interest Calculator and punched in some numbers. If you buy the PS3 on your Visa for a $400 or so outlay (If it ends up being priced lower than that, then tack on at least one game and a memory card, both pretty much required for using the darn thing) at a fairly standard (sadly) 20% interest rate, with 2%/$10 (Make easy $10 payments!) minimum payments:

You'll have paid $264.67 extra for your PS3 and it won't be paid off until 5 years and 7 months after purchase. So how excited is everyone about the PS2 now that it's 5 years and 5 months after it came out? Is it even still functional? Has it been sold, traded, or given away? Was it worth $664.67?

Linux port

[necromcr]

I'd pay full money if it would run Linux. It would be my precious.

Re:Say WHAAAT ?

[Anonymous Coward]

Actually sony admited that what they were showing was a prerendered video "rendered to spec". So they showed a video of what the ps3 might be able to do.

If that is the case...

[SetupWeasel]

Expect a launch like the PSP:

March 2006 in Japan with 100,000 units. ("We launched on time!")

November 2006 in the US with a million units ("We are focusing on the PSP")

And Summer 2009 in Europe, proscuting anyone who tries to import one.

Microsoft seeks to ensure Sony win

[SuperKendall]

I might have agreed with some of what you say. But it's all moot because Microsoft is going to do something to ensure a Sony victory.

Microsoft has gotten itchy for all that space on next-gen DVD's (as well as the coolnes factor). So, they have anounced that at some point they might ship an XBox 360 with an HD-DVD player... but not the initial units.

I believe the proper term is Osbourning a system. I think this is going to drain mightily from the first-mover advantage they have, if any. Would you really buy an XBox 360 knowing within a year (probably around the PS3 release) they are going to ship a model with HD-DVD, and thus future games you cannot play?

I also pretty firmly believe the PS3 will be substantially more powerful than the XBox 360, in terms of what we see from games. Not from the bogus console flop numbers which mean nothing, but because of two things; Time placed in market and developer experience.

With the PS3 coming out a year later Sony has all the time they like to tweak systems for even better performance, and can also afford to add more advanced parts (like the Blu-Ray players).

Furthermore PS2 developers now will have a somewhat familiar world to program for on the next generation of PS3 hardware, while XBox programmers have a lot more of a shift to deal with.

I think to deal with the loss of any potential casual gamers SOny will seek to leverage some cool things on the PS2 until the PS3 release is near.

Re:Microsoft seeks to ensure Sony win

[AvantLegion]

They talk about it, but won't necessarily do it.

Remember when they were talking about selling 3 different versions of the Xbox 360 at launch? They backed away from that fracturing of the market too.

Also, if they DID sell an HD-DVD version down the line, it wouldn't mean that games would make use of it. Game developers are not so quick to turn their back on millions of installed base users. Notice how nobody made use of the PS2 hard drive peripheral? Game developers are not so stupid about their bottom lines.

And I don't know what you're talking about when it comes to developers shifting from PS2->PS3 compared to Xbox->X360. I'm guessing you're not a computer programmer. What are you talking about by "familiar world"? Familiar API abstractions? X360 developers will continue to be in a DirectX-derived world, something that's been around far longer than Sony's kits. Familiar hardware? The PS3 is far more radically different from the PS2 than the Xbox 360 is from the Xbox - the PS2 didn't have a GPU, programmable shaders, etc. So I'm not seeing what you could possibly be talking about.

This isn't about games

[h0ss]

This move isn't about the game player. This is about getting blue-ray into people's houses before HD-DVD. If sony can win *that* war, the console gaming war is secondary.

bad news sucks

[Dink Paisy]

Given that the hype is so high already, they may want everyone in silent mode so that there isn't so much hype-deflation going on. People don't believe the hype as much as they used to, and they may want to keep articles about prerendered demos, low performance processors, and GPUs that are available in PCs already out of the mainstream press.

PS3 is smaller than Xbox 360...

[YesIAmAScript]

It's longer, but slimmer and a tiny bit shallower too. In the end, both really are about the same size as the original PS2.

It's not fridge-sized.

I have an original US PS2 (SCPH-15000), and I've taken it apart before. I'd be shocked if it didn't cost more to make than sell at that time. The DVD drive alone must have hurt a lot. Have you forgotten when the PS2 came out, standlone DVD players were about $400-$500? The PS2 was $300 and contained a lot more stuff inside than a DVD player did. Plus that crazy complex (expensive) cooling solution.

Re:PS3 is smaller than Xbox 360...

[ncmusic]

What the hell DVD player did you pay $400 for in 2000? I hope it was progressive scan or had a DVD changer.

Re:Say WHAAAT ?

[Anonymous Coward]

Actually you aren't correct. Both companies showed footage running on dev kits or what have you but MS showed REAL footage AND the ATI booth had ONE fully assembled (though probably not final power) 360. Also, why would the apple dev kits be any less real hardware than the sony ones? You sir ar trolling.

research...

[YesIAmAScript]

"Merrill Lynch Japan has conducted research that indicates that the Playstation 3 will retail for $399."

This is just research, not a Sony announcement. Also, consoles that debut in Japan first (as Japanese consoles usually do) often cost more there until they come out elsewhere. The Playstation was $400 in Japan when it came out. It was $299 when it hit the US (although it was not significantly cost-reduced, they just repriced it). The PSP was $350 or something in Japan, $250 by the time it came to the US.

I know Saturn was $400 in Japan and came to the US at $400, but quickly fell to $300. I don't know how much Dreamcast was in Japan, or any of Nintendo's consoles.

Honestly, like the PS2, supplies of the PS3 will probably be limited when it first comes out, due to supply constraints/yield problems. And as long as you sell every one you can make, you have a good price.

So I wouldn't get too worried about Sony ceding the market because of price just yet.

And I don't know that PS3 costs a lot more than Xbox 360 to make. As you point out, Xbox 360 includes a hard drive. That hard drive probably costs MS at least $40. I'm sure Sony is smart enough to not make a device that they cannot afford to sell at a competitive price.

Re:research...

[DeadScreenSky]

Some big misinformation there, even if your general point is probably correct.

The PSP launched at less than $200 in Japan, making the eventual US release actually more expensive! You're right that this is normally the other way around, but it wasn't for the PSP.

Sony has always claimed that the price drop for the US release of the PS1 was due to manufacturing improvements. Supposedly they sold it roughly at cost. (I don't have a link for this handy, but this was pretty widely reported. I am sure some smart searching will find it if you don't believe me for some reason.) You could of course argue that Sony was lying, but I am not sure there is actual evidence you could use for that.

I do think it is likely that Sony will price the PS3 competitively with the Xbox360. But it is entirely possible that they might try and make it out to be the more premium product, with a slight price difference to match (much like they currently do with the PSP). Sony isn't doing that well financially, so I am not sure how much they can realistically lose on each PS3, assuming it ends up being as pricy as it could...

Re:Predatory Pricing ... not quite.

[Gannoc]

If a price is dropped so low that competitors simply can't compete with the price at all, that is almost certainly in violation of anti-trust acts.

But it is. A small company can't launch a console, because they can't subsidize a billion dollars in losses up front. Only Sony, etc can, AND that is only because they already have a position in the market.

Darl? Is that you?

[Anonymous Coward]

Wow, luminesweeper. I expected to run that on my Sorny PalyStation Potable.

You sound like Darl McBride of The SCO Group bitching about how GNU/Linux is a copy of UNIX.

Lies!

[Alpha_Traveller]

It's all creative accounting. Are we absolutely sure Sony doesn't get a tax break, or for that matter not have to pay their creditors if they say it's a loss? Sony will say it took $499 to make and it really takes $100 to make in a country where the US, Japan, etc. can't verify the actual cost of manufacture?

Re:Predatory Pricing ... not quite.

[WidescreenFreak]

But they're still not locking anybody out due to pricing that's lower than it should be. You're making a blanket assupmtion that just because Sony and Microsoft are taking billon dollar hits up front every potental console manufacturer will have to do the same in order to compete. That's a rather wild assumption to make. Just because the big three can and do take up-front hits of a billion does not autoamtically mean that all other potential console makers will or must have to make the same kind of up-front hit in order to enter the market.

I'm forced to think about a certain, rather large company that started with two guys in their garage. They didn't take a billion-dollar up front hit to make their company what it is now.

Re:Distinction: Government Subsidies

[xenocide2]

The other situation that is prohibited is for a monopoly to sell a product at a price below cost in order to destroy the competition. In such situations, the monopoly aims to destroy the competition so that the monopoly can, at a later point in time, dramatically raise the price of the product to reap monopoly profits. Such actions also hurt the American economy.

Is it even possible for a monopoly to sustain that sort of behavior long term? The argument I'd heard goes like this: the current pricing scheme has created enough incentive to produce a few competitors; in order to keep them out, the monopoly lowers its price by say ten dollars for X months. In order to make that up, the monopoly must raise prices by twenty dollars (ten over the older number) for X months at some point. At this point there is now ten dollars MORE incentive to create a competing business!

This is SPECULATION

[Anonymous Coward]

One of the worst things about Slashdot is how they post speculation in headlines that make them seem confirmed. This is from a Merrill Lynch report - basically they are making a guess. Sony has not made any announcement. Why can't Slashdot post something like that? Simply putting "Analyst says PS3 will cost $400" hews to the truth much better and is not subtly deceptive.

Yeah, it's me

[Anonymous Coward]

The Linux community claims that being "open source" encourages innovation. Why, then, are all their games just rehashes of commercially-successful games like Tetris and Puzzle Bobble?

Sincerely,
Darl Turlington
President, Product Development
Electronic Arts

I bought a PS1 and a Saturn...

[YesIAmAScript]

The PS1 cost me $299 and the Saturn cost me $399. Both were bought in the US on the first day.

I took both apart. Although the Saturn did look more expensive (mostly unnecessarily, due to how it was put together with several boards instead of the PS1's one), I'd be shocked if it couldn't be built and shipped to the US for $399.

I took apart my first gen US PS2 ($299?), and I have to say that was probably on the fence. There was a huge cooling solution and a couple sandwiched boards in there, and DVD drives were a bit pricey at the time. The first-gen JPN PS2 was even crazier, with a PCMCIA slot and such, it surely would have been sold at a loss if it was $299, which it wasn't. Gord's declaration of $120 profit per PS2 sold is most definitely wrong, at least on the day of release.

I do agree with him the N64 wasn't losing N any money. That thing was a beauty. If you took it apart, there was NOTHING in it from day one. And I don't mean that in a bad way. It was probably the same cost to make as a SNES. Nintendo did an excellent job with that system (if you don't mind cartridges).

For the record, the Xbox seemed like a clear money loser to me. It's very complex inside, it steals more than just controller designs from Sega. They are fools for what they did, never significantly cost-reducing the box. And the hard drive, it's just a money sink. The dirty little secret of hard drives is they never get cheaper, only bigger. MS started out with 8 and 10G drives in the Xbox, probably paying $50/each for them. Now if you get an Xbox, it has a 40G drive in it (the only one on the market) with firmware to only do 10G of capacity. How much does Seagate charge for that drive? $40/each.

When you make a console, you plan to cost-reduce it over time to match the price drops. But you can't do that with the hard drive. I'm very surprised MS bundled the HD on Xbox 360, after learning that lesson the hard way with Xbox.

Anyway, back to the topic. I don't take what Gord says here as gospel. Of course, I also don't think Sony is going to pay $105 for a CPU chip or BluRay drive either. Finally, you left out parts of Gord's article. He mentioned other consoles which were sold at a loss (Dreamcast).

A lot of misinformation on all sides here. Especially that $120/PS2 at launch. Give me a break.

Re:I bought a PS1 and a Saturn...

[TrancePhreak]

As for your response regarding the XBox, they did reduce the cost of the system over time. They actually set at value or more now. Much of the parts of changed and some things have been reduced. Some of them better, some of them worse. The HD was about $20 a piece. They stopped using 8GB drives because it was cheapter to get bigger ones, keeping the cost down.

Re:I bought a PS1 and a Saturn...

[TrancePhreak]

I r teh sux at teh speeling. "They actually sell at value or more now."

At this price, it better have features.....

[ShyGuy91284]

Even if Sony is losing money on it, I'm not about to pay $400 for just a game console. I wouldn't estimate it to slide into the reasonable (to the upper middle class maybe) ~$250 range until it's been out for at least a couple years, and even that's too steep for a lot (Let's see... $250 for system, $100 for a couple games, $50 for tax and other accessories... $400 for Xmas just there). I'd pay $400 if it had decent PVR ability, maybe a few other bells and whistles.... But not just for a game console....

Re:At this price, it better have features.....

[orderb13]

Well, let's see. It is a 2 port gigabit router, can play your DVD's and Blu-ray ones as well. Also has built in wireless. Need any more bells and whistles?

Re:At this price, it better have features.....

[ShyGuy91284]

The router is handy, as is Blu-Ray playability (if that format ends up being standard). But unless it can also replace a PVR, it's still pretty steep for most people (Routers are cheap, and we'll see how the Blu-ray situation turns out cost wise and availability wise). Gigabit and Blu-ray will probably be a bit ahead of it's time until a little while into the console's life anyways.

Blu-ray writers..

[DroopyStonx]

So with the release of a blu-ray dvd player like this, how long till we get the writers?

It's bad enough that dual-layers haven't even taken off yet.. and that's a few years too late.

It's gonna be a nightmare to copy games for this thing.

EXACTLY!!! Sony's got nothin'

[OzPhIsH]

This is exactly what is going on, and no one else seems to have mentioned it. Everyone knows that the much touted Killzone demo was a complete fake, and in addition, recent articles have been surfacing that completely contradict some of the outlandish things Sony has been promising. Same thing happened before PS2 came out, but gamers ate up every word marketing said. This time around, people seem a bit more wary of Sony's claims. I haven't seen one damn thing that was REAL to get me excited about Sony's new console. I think Sony realizes this and is engaging in damage control as we speak. They simply don't have shit to show but instead of coming out and saying that, we get great PR spin like "Sony is taking the PS3 underground." The term nicely coincides with their disc demo magazine thing called Playstation Underground which simply enhances the marketability of what they're saying. I can just hear all the fanboys already. "COOOOOL! Underground! Sony Rules!" In reality Sony is just buying time until they can actually get something tangible ready that comes close to meeting some of the expectations they have fostered.

Re:Say WHAAAT ?

[Anonymous Coward]

This is not flamebait, you idiot moderators! If you came to the E3, you'd realize that he said the truth!

Re:eBAY PS3 for $499

[vertinox]

When the DS came out last year, I was really tempted to sell the one I pre-ordered. There was about 2-4 weeks where they wouldn't have any in stores because they didn't make enough and I was recalling they were really selling hot on ebay, but I enjoyed mine too much to sell it.

I already have it budgeted

[tolkienfan]

I've been telling everyone I'd pay $400 for it when it launches.

And when it does - I'll be happy to spend an extra $100-$200 for a decent hard drive and Linux.

Even $600 would be cheap for the kind of computer you're getting.

My aging 2ghz PC running Windoze will become my wife's permanently, and my kids are gonna have a hard time kicking me off the PS3.

I'm already reading up on vector processing.

Re:I already have it budgeted

[Anonymous Coward]

Personally I've started saving up for the 360.

Re:I already have it budgeted

[tolkienfan]

Good idea, give Microsoft more money, which it will undoubtedly use to bash us all over the head.

Personally, I think the 360 will be a dismal failure in the face of the PS3. It's an entire freaking supercomputer and entertainment system.

Name something it can't do!

Re:Predatory Pricing ... not quite.

[JahToasted]

Well it means a new company would have to make their console $100 cheaper and have it just as good as Sony and MS's products. Now there is always barriers to entry that naturally occur in industries like this (R&D costs, economies of scale that small companies can't get right away) then you add the need to be at least 25% more efficient than your already established competitors... well that's a little much.

Yeah, in the past, when the computer industry was new, there were less barriers to entry and therefore more opportunity. That's over now, true capitalism is dead now.

A voice for the little man

[wetdirtmud]

I think that I will buy thousands of the consoles, and never purchase a game! That way I can single handedly bring down Sony... right?

Re:Say WHAAAT ?

[Anonymous Coward]

Moron, Sony *admitted* that it was all prerendered.

BluRay

[xswl0931]

The other problem is that even if there were a ton of BluRay movies available, the original issue was a college student being able to afford the PS3. Making use of BluRay implies that you have a HD capable television and preferrably a sound system to match. I doubt the college student could afford either if they are concerned about the price of the PS3. So those "extras" are not a selling point anyways. Not to mention the supposed $60 per game that's been thrown around.

MOD PARENT UP!

[cttforsale]

I know 5 people with Xboxes, 4 with PS2s and 2 with Game cubes. We did a count recently and - the number of legit copies were 11 xbox titles, 6 PS2 titles, and 23 Gamecube titles. - the number of "copied" titles 59 Xbox, 103 PS2, 0 Gamecube. Now I tried the PSO loader hack with an image I dl'd of a game I already had but the load times sucked ass.

Re:Predatory Pricing ... not quite.

[WidescreenFreak]

But you're assuming that a new company cannot possibly make a console cheaper that is as good as the others. I guess that I have more faith in human ingenuity than most.

Broad range of programming experience

[SuperKendall]

And I don't know what you're talking about when it comes to developers shifting from PS2->PS3 compared to Xbox->X360. I'm guessing you're not a computer programmer. What are you talking about by "familiar world"? Familiar API abstractions?

I guess you haven't been programming that long, or possibly are not that familiar with console programming.

What I am talking about is msotly the ArsTechnica article recently posted. The need to split tasks across a number of different processors is one of the keys to making both the new systems perform well - and developers have had to do this on the PS2 far more than on the XBox.

Yes the XBox 360 programmers will be abstracted away from that by the DirectX API to some extent, but that is mostly in regards to graphics programming and not general use of the CPU (for things like physics or AI).

This also means less of the performance gains from running finley tuned code tailored for the chipset of the computer, which PS3 developers will be able to handle because the architectural structure is similar on the PS2. PS2 developers have been more used to having to figure out parallelization issues, so they will be more ready for an architecture that demands skill in that regard.

The differences you mentioned about the programmable shader and so forth, will also be mostly hidden behind a Direct X API as well as they are mostly graphics related. The difference in gong from a single processor PC-like system to a PS2/PS3 like system is a far greater leap to travel than some incremental improvemnets in graphics hardware. Read the ArsTechnica article, it says the XBox developers think the same thing - they also wish they are had been a faster pentium in there instead of what they got.

Re:Predatory Pricing ... not quite.

[Anonymous Coward]

The law is not generally written to accept the possibility of miracles as ways of getting around anticompetitive practises.

I distinctly remember....

[TechniMyoko]

analysts making the same claims on PSPs cost, and that didnt fan out either.

Okay, but here is the problem

[Anonymous Coward]

I have a PS2 and a Gamecube. I will buy a PS3 when there is some great games for it. The fact that it will cost more means that there will have to be more "top-level" games. Examples are Grand Theft Auto 3, Gran Turismo, Final Fantasy VII, Super Mario 64, and Super Smash Brothers Melee. The only way I will buy any console is if there are games on it that I really want, that's it. What will the PS3 bring that will allow better games to be created? How will developers use the fancy new technology? The key, as it always has been, is game quality.

Re:Say WHAAAT ?

[topper24hours]

Hmmmm.... on IGN when I watched the clip. The Sony bigwig when asked point blank didn't hem and haw at all. He stated quite plainly -"No this is not pre-rendered. Yes this is on actual game hardware."

actually, it certainly did have a changer...

[YesIAmAScript]

Although I didn't buy one. I was still using my first-gen ($800) Sony DVP-S7000 at that point. But at the time, when I was pricing DVD players, I was pricing changers, so you're also spot-on there.

Also, I wan't pricing cheap junk (like the low-end Panasonics, 110s and 310s) I didn't have any reason to "upgrade" to a player which was just catching up with my first-gen player which still worked great.

Maybe you're right, maybe I wasn't pricing DVD players which were directly comparable to the PS2's capabilities. If I were, I'd maybe have seen more $250 prices and fewer $400 prices. But the PS2 still contains a lot more stuff inside than those $250-$300 DVD players.

Boy, remember the days when Sony would make a product like the DVP-S7000 and it would take other companies two generations to catch up? You don't see that much anymore.

MS has HDTV WMV format.....

[cheekyboy]

MS has the HDTV WMV file format... which can fit
on one DVD and do the same....

so they could still play hdtv movies, but yeah i kno sony owns Sony Picturees etc....

another betamax war?

Microsoft would be foolish to release H3 that day.

[YesIAmAScript]

Xbox 360 comes out fall 2005. PS3 will likely debut in the US in fall 2006. Microsoft would be idiots to not ship a Halo game for Xbox 360 until a year after it ships.

You need halo titles (pardon the pun) to sell a console, MS wouldn't do well to withold their strongest one just to spite Sony on PS3 launch day.

Remember how much not having a Sonic title hurt Saturn? Dreamcast had a Sonic title on day one. And the Gamecube wasn't helped much by not having a true Mario (or Zelda) title at launch either.

Amazing

[asciiRider]

It's amazing to me how much people will pay just to be able to press some buttons.

I did buy a dreamcast for 50 bucks to be able to smash some buttons. But I can't bring myself to spend this kind of money to do it.

The Osborne Effect

[C0deM0nkey]

So, they have anounced that at some point they might ship an XBox 360 with an HD-DVD player... but not the initial units.

I believe the proper term is Osbourning a system.

Cringely just did a column on the Osbourne Effect and why its namesake got a bum rap. The relevant portion of Cringely's comments:

Adam Osborne was accused of pre-announcing the DOS version of his CP/M line -- in fact, he told reporters there wouldn't be a DOS version for at least a year because it was too expensive for his price-sensitive line. He announced the Executive -- the follow-on model to his successful first Osborne -- one month before delivery, and sales dropped in half for a couple of weeks while inventory cleared out. Then the Executive actually went on sale -- and sales dropped, from about 10,000 a month for the original model, to essentially zero for the new model.

The reason for the drop was that the Osborne Executive was not competitive with the Kaypro, a slapped-together rival priced at a couple hundred less ($1,795 instead of $1,995 for the Osborne 1), but it had a much larger screen -- 9 inches compared to O1's five inches.

The Executive came out, much better built, more manufacturable, but with a mere 7-inch screen. There was deep disappointment among Osborne fans. Worse, it was priced at $2,195 -- a two hundred dollar increase in a very price-sensitive end of the market! Four hundred dollars more than Kaypro for a brand name but a smaller screen? No thank you! Buyers walked away. Osborne sales dropped to fewer than a thousand a month for the next three months--which was enough to choke the high-flying company, which was forced to declare bankruptcy after a mere five months of this.

But the buyers just walked across the street to the Kaypro. Kaypro sales jumped to nearly 10,000 a month -- in other words, they captured all the disgusted Osborne buyers. Which proves the Osborne's disaster had nothing to do with, as legend has it, the "pre-announced DOS machine." The Kaypro was and remained for the next 18 months a CP/M machine.

So poor Adam Osborne is off the hook. Spread the word.

Re:The Osborne Effect

[mink]

Find out the true story and spread that word instead.

The Register has an article talking about the myth of the Osborne Effect.

Too bad Cringly could open up a couple old books and, I dunno, research his article before publishing it. While the register does not provide a link to the book quoted, it does at least tell you the name of the book, who wrote it, as well as actually ask the people if the statements they were about to publish were accurate.

Re:Microsoft would be foolish to release H3 that d

[Anonymous Coward]

Perfect Dark 0?

Also M$ has Gears Of War for later down the road.

PS3 as Computer

[Zobeid]

There's been a lot of talk making the rounds about how both Microsoft and Sony want their consoles to morph into home computers (or media centers, if you prefer). Once you've tacked on a hard drive, internet connectivity, and some kind of OS. . . It's practically like a computer, isn't it? Sony seem to favor Linux, while Microsoft are reputed to have some kind of OS they could get to run on theirs. And since the conventional computer market is now regarded as saturated or stagnant, this looks like an avenue for further growth.

Now, I could dredge up the ghosts of all those consoles in decades past that tried to become computers (Intellivision, ColecoVision/Adam), and computers that tried to become consoles (Atari 5200, Amiga CD^32, Apple Pippin), and I could point out the one thing they all have in common: They all flopped. (Incidentally, rumors said that the CD^32 was selling pretty well, right up until Commodore imploded underneath it.)

But here's the real issue. . .

It's about controlling the platform. It's about the natural conflict between the console business model and the computer business model. If Sony offer up a PS3 console with Linux, how are they going to prevent any random non-license-paying bozo from making games and selling them?

This is life-or-death for Sony. Their profits come from making sure nobody makes and sells the games without Sony getting a cut. They could put Linux on the system, but they'd have to somehow lock out parts of the hardware -- parts that are needed to get any kind of competitive game to work -- unless there's a license code to enable them.

The only other alternative would be to change their whole business model so they can make money selling consoles instead of game licenses. I don't see that happening, considering how profitable their current business is. (This should really be called the Nintendo business model, since they were first to make it work and everybody else followed.)

By way of comparison. . . A Mac Mini from Apple comes with a complete -- and excellent -- development system. You can program whatever you want, and not have to pay license fees or ask Apple (or anybody else) for permission. From that standpoint, the Mac is a far more interesting system, and qualifies as a "real computer" in a sense that the PS3 can't.

Re:PS3 as Computer

[Jarlsberg]

Now, I could dredge up the ghosts of all those consoles in decades past that tried to become computers (Intellivision, ColecoVision/Adam), and computers that tried to become consoles (Atari 5200, Amiga CD^32, Apple Pippin), and I could point out the one thing they all have in common: They all flopped. (Incidentally, rumors said that the CD^32 was selling pretty well, right up until Commodore imploded underneath it.)

The CD32 sold well in Europe, actually, as did the Amigas too. It was a lot of other factors that brought Commodore down, most notably the huge losses incurred trying to enter the PC market in the early nineties, and an incredibly corrupt and greedy board of directors who did not care either for their company, their shareholders or their customers. If Commdore UK had been able to break away from its parent company, there's a good chance they might still have been with us...

SCEE?

[Anonymous Coward]

I'm not sure that Sony Computer Entertainment Europe should be considered a reliable source when it comes to the activities of Sony as a whole..

After all, if they were in the loop in any way, would the PSP have been a year late in reaching European shops?

In short, SCEE=poor cousin, and anything that David Reeves utters in this regard can be treated as 3rd-hand PR crap. Wait for proper Sony to make a statement.

Waste

[Anonymous Coward]

Waste of time
Waste of money
Waste of energy
Waste of life
Corrupt leaders love your waste

Sony HD might be useless...

[Anonymous Coward]

It sure was for the PS2. Game developers know, you build games for the default configuration.

The Genesis add on (what was it, 32x?) bombed. So did the Sega CD.

Playstation 2's HD was completely worthless, except for FFXI (1 game?)

Now Playstation is doing the same mistake again. The only successful add-on in console history was the ethernet adapter for PS2. Sony, if you don't ship the HD with the PS3's, it will bomb just like the HD for the PS2 did. And while I loved Sony's games, I won't go another generation of crappy memory cards without proper HD support.

Going underground?

[Anonymous Coward]

Anyone have a torrent?

Mod parent down

[ad0gg]

Sony didn't have PSX3 hardware at E3, the graphic chip hasn't even been tapped out yet. Killzone was a cinematic rendering. Here's the general opinion from IGN's PSX2 site. There's also few articles even one which actually named the studio that did the rendering. I'm too lazy to google for it.

Jeremy Dunham - IGNPS2
"I don't think so. I think the only way the game will look like that is if they spent several more years in development and knew how to exploit the PlayStation 3 to its fullest. I have no doubt that they can produce cutscenes that good, but then again, the cutscene gave that away!"

Ed Lewis - IGNPS2
"We're probably going to see similar type graphics...hopefully. Because that's what they're aiming for, but...oh man. Hopefully. I mean, right now it's just a concept video. What will it be? I don't know. It's way too early to tell."

Well, that's a shame

[SuperKendall]

It was such a good term too. It sounds so much more poetic than "savaging your own market" or the like. Oh well! Thanks for the info.

In the next generation console war...

[Anonymous Coward]

the pre-rendered video plays you!

Re:Say WHAAAT ?

[DeadScreenSky]

Other Sony PR people have said it is a "concept video". When G4 interviewed one of the bigger Sony executives (I want to say head of Playstation Europe) he actually gave both contradictory answers in the same interview. Sony wants the public confused about the Killzone video, which is why they are doing this. The fact that the PS3 hardware's videochip wasn't even taped out yet at the time of E3 (and still isn't, AFAIK) is proof enough that this wasn't actual PS3 footage. But just a careful visual inspection of it shows that it was clearly prerendered.

But anyway, here's one of the devs of Killzone 2:

Jan-Bart: Yeah, it's basically a representation of the look and feel of the game we're trying to make.

That sounds like prerendered to me. That interview is enlightening.

Sony = Innovator, Microsoft = Profiteer

[Anonymous Coward]

Nintendo = Innovator also.

Re:Microsoft would be foolish to release H3 that d

[AvantLegion]

It's possible MS will release a sort of "Halo 2 Reloaded" near the X360 launch, to give people online Halo play on the X360... and then wrap up Halo 3 and launch it when the PS3 hits.

Rehash?

[Anonymous Coward]

Why, then, are [Free] games just rehashes of commercially-successful games like Tetris and Puzzle Bobble?

Why is the commercial game Snood a rehash of Puzzle Bobble? Why does THQ keep making rehashes of Tetris? And isn't EA's own Madden NFL series a rehash of Tecmo Bowl and Sega's Joe Montana Football?

"It's been 1 hour, 1 minute since you last successfully posted a comment"

Re:Rehash?

[Anonymous Coward]

Dear homebrew community,

I've heard great things about Katamari Damacy but I don't want to support closed-source software. Could you please make a ripoff of this game over the next eight years so I can run it on my Game Park GP32?

Thanks.

Sincerely,
Open source gamers.

Whoa, Sherman Antitrust Act?

[Aeron65432]

IANAE (economist), but I do know that selling products below manufacturing cost to gain market share is illegal in the US per Sherman AntiTrust act.

I doubt anyone will sue them for trying to sell the PS3 for cheap, but I'm surprised this hasn't raised a few eyebrows among economists/the DOJ.

Better hope states don't compare to cell phones

[Flexagon]

... will retail for $399. ... will cost $494 to manufacture.

So, following the double taxation philosophy of cell phones (at least in California), buyers should be taxed on something closer to $494, not $399, even though we're ultimately taxed on the futures (games or minimum service contracts) that more than pay for the hardware.

Re: "But you don't have any CDs"

[Sinner]

Actually, I bought The Matrix on DVD a year before I had anything to play it on :-)

But now that I look back on it, that was kinda stupid.

Re:+1 Offtopic

[Anonymous Coward]

You're a crappy writer and your Japanese is pathetic. Feel good?

Re:Microsoft would be foolish to release H3 that d

[DeadScreenSky]

It doesn't matter. Halo 3 isn't ready. Giving Bungie another 1.5 years to finish it is a pretty reasonable time frame. It's more coincidence and lucky timing on MS' part than them actually holding a Halo 3 back for the PS3 launch. It's kind of smart, too - MS has a lot more than the Halo series as an Xbox exclusive, but getting more series (like PD0 and Gears of War sometime early next year) will really help them out.

And everybody will be able to play Halo 2 on the Xbox360 anyway at launch. If MS is smart they'll just make the emulator give a better framerate, maybe higher resolution. Not quite a new Halo, but still a nice enticement for all of the many Halo freaks out there...

Gears of War and PD0?

[YesIAmAScript]

Launching Xbox 360 without a Halo title is stupid. And Gears of War and Perfect Dark Zero are not Halo. Good games? Perhaps.

But they're not founding inductees into the Video Game Hall of Fame.

If MS wants people to buy Xbox 360s, they need a Halo title (not just a halo title). It needn't be out on the first day, especially if Xbox 360 supplies are limited. But they need it as soon as they have sufficient quantites that they want to start selling boxes. And that means BEFORE PS3 somes out.

Saw Gears of War at E3. It's a total Halo knockoff. Plus the producer of the game was a total douche in the video. I couldn't figure out why they bothered with the game, other than perhaps because they're afraid Jones & Co. cannot get a Halo title out on time. But honestly is a pretty safe bet.

As to Perfect Dark Zero, Rare has done nothing but crap since MS bought them, and often very late too. No reason to think that's gonna change. Nintendo sure got the better of that deal (selling Rare to MS).

Anyway, back to the topic, good titles are nice, but honestly, they need big name titles at launch at least as much as they need good titles. Again, look at the examples of the Gamecube and the Saturn. When you launch a platform, bring your "A" properties or risk peril.