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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
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."
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!!!
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?