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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."
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.
do.what.promptcmds
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.
My 3D Texturing Skinning work (under construction)
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.
----- You know you have ego issues when you register a domain in your name.
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
"You're never ready, just less unprepared."
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 ~$75 loss per system for Microsoft.
do.what.promptcmds
(from the linked page)
and:
Sony hasn't yet sold a console at a loss. Nintendo did not sell the N64 at a loss (although it appears that the Gamecube was sold at a loss for a while). Sega was the first major videogame system manufacturer to do it and they went out of business. Microsoft also did it but they have too much money for such a small loss as a billion dollars to bankrupt them.
If HDTV meant anything to the Nintendo consumer base, they'd have shunned the GC for Xbox.
.. thats where its at. The vast majority of users I've met couldn't even tell you the PS2 was less powerful than the Game Cube, so how is anybody but the home theatre crowd going to care whether the console sports HDTV. I simply don't think they will. I think ign.com vastly overestimates their consumer base's desire for cutting edge home theatre gear.
Really, I think IGN whining for HDTV is a product of Matt and the other cube.ign.com guys being sick and tired of not being able to compare dick sizes with the xbox and ps2 staff.
Nintendo never was about the hardware; and the fact that PS2 fucking blows chunks from a technological standpoint vs the Xbox and the GC provides a good example of how much of a red herring HDTV is.
Games, market perception, and release timing
"Old man yells at systemd"
Most consoles have NEVER been sold at a loss, and the PS2 made OODLES of profit from day one (enough to recoup the R&D costs within a year).
... http://www.actsofgord.com/Proclamations/chapter02. html
The Sega Saturn was sold at a loss and failed. The Xbox was sold at a loss but M$ 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
-- More Smoke! The mirrors aren't working!!!
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 $72 game was Final Fantasy III (US), bought new, after finals one semester, at Biggs (are they even around anymore).
Well, if you notice that they quote the price in Yen, not US$. 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.
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.
"Old man yells at systemd"
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.
http://lkml.org/lkml/2005/8/20/95
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?
"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.
"Derp de derp."
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.
But anyway, here's one of the devs of Killzone 2:
That sounds like prerendered to me. That interview is enlightening.
There is no excellent beauty that hath not some strangeness in the proportion. -- Francis Bacon