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PlayStation 3 Delayed, Over $800?
AWhiteFlame writes "Cnet is reporting that a research report issued by Merrill Lynch suggests that the Sony PlayStation 3's American release may be postponed until 2007. From the article: 'The analyst firm proposed the idea that high costs and Sony's decision to use an 'ambitious new processor architecture--the Cell' is making it look like the company might not be able to meet its goal of getting the PS3 out in the U.S. this year.' Sony did not immediately respond to a request for comment." The official report (pdf) would also seem to indicate that the console will be somewhere in the neighborhood of $900 when it launches.
I'm not an insider by any means, nor a PS "fan boy," but isn't it likely that this is just very intelligent marketing by Sony? It's generally accepted that a game console launching at $900 (hell, $600), isn't going to happen in this day and age of mass market acceptance being an essential requirement of the development of any piece of electronics. This falls right in line with the Blueray machine costs . . . make it seem like astronomically expensive hardware fit for a king, and then release them at a fraction of the price, and sooner. I don't care when they release it, but I'm betting it will be this year, and at a $500 price point or lower.
Apple just did it with the Intel switch. First they've started releasing the stuff 6 months earlier than they said they would, and now their upgrading the processor clock speeds for free. Who wants to bet that wasn't in the writing already for the entire gestation of their Intel plans. If there were two companies I would compare hype-capabilities apple-to-apple (sorry), it would be Apple and Sony.
A B A C A B B
Maybe by 2007 Xbox 360s will actually be in some stores around here, and then I can have my choice.
...the report says basically "we don't know anything, but we think it's hard, so they won't make it."
Right. Remind me to call them nextx time I need random guesswork done.
...more than anything like Merril Lynch is trying to get people to dump Sony stock so they can buy it up, then make a killing if the PS3 matches their REAL expectations. Or maybe I have my tinfoil hat wrapped a little tightly?
Going back to school for entry-level jobs?
Damn, my first car cost less than that. Granted, it was a piece of shit, and it didn't have the latest and greatest Cell HypeEngine® built in, but it did have a nice big back seat (wink, wink), which produced a lot more fun than any Sony equipment I've ever owned.
ABSURDITY, n.: A statement or belief manifestly inconsistent with one's own opinion.
Excellent post above about Apple to Sony.
Hype how expensive the machine is and how much good stuff is there, and then make it look like a bargain when they come out as 600 dollars! Look you saved 30%!
Shit, for that amount of money, I might as well just get a new PC.
Maybe call it the 'Neo Geo'. :P
...pointing out that this is clever marketing from Sony, or this is just some whacky stuff from Wall Street, remember that the analysts who wrote this report make their livings and substantial salaries from analysing their target companies. They know these companies inside out, because if they didn't they would be out of a job before they knew. When you consider their balls are really in a vice grip because if they get their predictions their wrong, their companies stand to lose a lot of money, then you give a bit more credence to reports of this nature.
Having read the pdf file, the analysis seems quite reasonable, and well considered, and utltimately quite persuasive. Whether it persuades you is a different matter, but before you dismiss the report out of hand, remember that the authors spend a lot of time trying to understand and predict what Sony is going to do, and therefore are better qualified than most third parties to reach conlcusions about slippages and prices.
Those are just speculation. Facts are, there isn't a release date nor a price set. That's all.
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the console will be somewhere in the neighborhood of $900 when it launches.
Somewhere in the neighborhood of $900 to build when it launches.
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IBM must be having fab problems with Cell at 90nm. Perhaps they want to wait for the transition to 65nm for better quality control. I bet if IBM and Sony had decided to go with six SPEs per Cell rather than eight, and cut the die down in size, they wouldn't be having these problems.
If this is true it will give MS and the 360 a huge advantage in the marketplace. Further, I don't think Cell is going to be significantly more powerful than the Xenon, even with single precision floating point (the vast majority of Cell die space). I think IBM and Sony really stumbled here, both from a technology perspective - and now from a manufacturing and quality control perspective.
Wow. Maybe Microsoft really has kicked both their asses. In everything, from new technology, manufacturing, and time to market. Sheesh!
Yup. Considering that Sony also owns the rights to all BluRay technology, they will make money in the form of royalty off of every single BluRay disc that is sold in WalMart, Best Buy, Target, etc. BluRay is really what Sony seems to be hedging its bets on, not necessarily the PS3.
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The Revolution is definitely coming out before at least thanksgiving, and definitely under $300. Why get somthing with fewer but more expensive games that, all on top of that, costs 2-4 times more?
Wonder what the public key field is for?
Of course, to stay competetive, Sony will never sell the PS3 for what it cost to build it, but this really does put a question mark on how low they can afford to go.
The report also speculates on the ramifications for other companies, such as Nvidia, ATI, EA and others. It's a good read.
The article states that $900 is the cost to Sony. It won't cost that retail, they always take a hit. The original Xbox cost more to make, than it sold for. It's called a loss leader, look it up.
It 'aint $900 worth of special, though.
"A language that doesn't affect the way you think about programming, is not worth knowing" - Alan Perlis
Anything above 600$ will hurt, as my wife would try to kill me...
The report comes up with the $900 estimate by summing up cost estimates for each of the components, but its estimates for the prices of those components is overly pessimistic. In particular, it predicts that the Blu-Ray drive will cost $350 initially (!?), that the CPU will cost $230 initially, and that the unit will not be sold at a loss. They don't say how they arrived at those, but $350 for an optical drive in bulk is not believable at all. If Blu-Ray drives cost anywhere near that much, then the PS3 will ship without them. A more reasonable estimate is that the PS3 will cost $500 at launch, and come down to $300 quickly.
The playstation is primarily a games machine. As such, it's parents buying them for their kids. Once you include a couple of initial release games, dropping $1000+ on the new console is not gonna happen. No matter how much little Johnny screams. $400-500, maybe. A grand? Not a chance.
My son is firmly entrenched in the playstation camp. PS1, PS2, PSP. Given the choice between a 360 now, or a PS3 later, he'd rather wait for the PS3. But for $1000? Tough luck, dude. Not happenin'.
(Yes, there are the fools who bought PS2 and 360 consoles for $1000+ on release day from some guy on eBay, but those are abberations.)
You're guilty of the same thing. You don't state why their numbers are not believable, nor how you arrive at your $500 estimate, nor the reasoning for how it would be easy for them to cut the price by 40% quickly.
While xbox 360 is positioned decently well, it hasn't had the landslide success people were expecting. At the price point sony may come in at, and the lateness... nintendo may well regain the home-console throne, at least in numbers. Mass appeal to non-hardcore gamers, low entry cost, *REAL* backwards compatibility are going to make the revolution an easy sell.
Be reasonable. You're posting on slashdot.
The more I read about Cell the less enthusiastic I am about the design. It's just eight SIMD vector units tuned best for calculating single precision floats. The local memory store seems more a hindrance than an advantage, especially at only 256KB a pop. The EIB interconnect bus is quite fast, but moving data in and out of each SPE from main RAM requires a DMA transfer for each operation. s-l-o-w. And finally you have the PPE, a basic PPC with the out of order execution unit hacked away yet keeping the traditional VMX (Altivec) unit. Why didn't they toss the VMX unit and try to keep OOE? For that matter, why did they need eight SPEs? Die space is already way too big at 90nm!
Gotta say: Microsoft is already in the game and taking marketshare. Sony better act quickly, or they're gonna lose this round.
I wish people would quit repeating this myth. Only 3 consoles have ever been sold at a loss: the Sega Saturn, the Dreamcast, and the Xbox (well, probably 4 now, I assume they're taking a loss on the 360 also). Losing money on console hardware is NOT the norm, and it's something only Sega and Microsoft have done. And look at what happened to Sega when they did that. Here's an article that has a decent rundown on the subject. It was last updated in 2003, but nothing has really changed since then. http://www.actsofgord.com/Proclamations/chapter02. html
The thing that is interesting to me here is this: For the last year, people have been repeating the factoid that the PS3 will apparently cost $500 to produce. If you spend a little bit of time digging, though, you'll find that all such claims ultimately stem from a single oft paraphrased-and-then-meta-paraphrased report by Merrill Lynch about halfway through last year.
Now Merrill Lynch says the PS3 will cost $900 to produce.
I can only conclude that the amount Merrill Lynch believes the PS3 will cost to produce approximately doubles every nine months. At this rate, by the end of 2006 Merrill Lynch will believe the PS3 costs $2000 to produce, and by the end of the PS3's lifespan Sony will be paying a full $4,551,111 per unit to manufacture the PS3.
Clearly, Sony has a serious problem here.
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Add up the numbers in the column. It only adds to $800.
This report is way way off.
Additionally:
The only thing worse here than M-L's estimate of the price of the PS3 this year is their estimate of it in 3 years.
Let's start from this year.
$230 seems high for just the CPU. I couldn't say how much, but I can say that Sony wouldn't even bother to make their console if the CPU cost half over half of the expected selling price.
The Blu-Ray drive price is WAY too high. Philips is going to ship a Blu-Ray writer drive for $500 in May. That's $500, retail. That includes retail markup, and cost of shipping to retailer. Also, Philips pays Blu-Ray license fees to produce units and Sony doesn't. And did I mention the Philips writes and the PS3 only has to read? And I can buy a quality DVD-Writer for under $40 retail right now. A Blu-Ray reader drive is a little different, but not a lot. It cannot cost much over $100, and it'll be well below that by fall, when the PS3 production ramps up (or perhaps just begins in earnest, I dunno).
6 USB ports? It will not have that many. 4 tops (2 front, 2 back). And the connector cost seems high, I'd say $3 today for USB ports, maybe $2.
For 802.11g and ethernet, Sony is using IP from Marvell that is normally used as an 802.11 access point. So it has all 3 ethernet ports and the 802.11g (and an ethernet hub) in a single chip (or less, see below). I'd say $5 for the ethernet and 802.11g together, maybe a bit more if they really leave 3 connectors on the back.
If the $100 was for a hard drive, they're the dumbest people alive. I can get a 40GB 2.5" drive for well under $100 retail. The OEM price cannot be over $50, and they could always go to under 40GB if it saves money. I'll just assume they added wrong.
I think also M-L doesn't understand that when you make a custom chip you can put a lot of stuff on it. The link (brains) for the USB, 802.11 and ethernet are probably on the main chip in the unit, bringing the cost of them down to nearly free. The 802.11 PHY/radio will probably be a separate chip, but the USB PHY is certainly on board, maybe the gigE one too.
So M-L is well over the initial price here.
Now, let's look at the future prices.
$100 for an OEM Blu-Ray reader in 3 years? Unpossible. Blu-Ray would have to be the biggest flop in the world for this to happen. My guess is you'll be able to buy a Blu-Ray writer drive for less than $60 in 3 years at retail. Look at how DVD writer prices collapsed. Readers will probably be under $40 retail. OEM prices for either will be even lower. And again, Sony doesn't have to pay license fees, so that lowers their prices even further.
$60 for the main chip in 3 years seem high too. It'll be on 65nm or lower then, yields will be way up, chip size down, and they might even combine chips (like the GS and EE were combined into a single chip on PS2 in under 3 years). I couldn't say how high though. Maybe it'll be $50, but include the functions of some of the other chips in it.
$30 for 512MB of RAM 3 years from now. Seriously? That's way off. GDDR3 will not be special anymore, and Sony won't be paying much premium for XDR, since they'll have enough volume to make a market in it. Right now you can get 32M of mobile SDRAM for $4 in big quantities, 64M of mobile SDRAM for $5. And I'm to think 512MB of commodity RAM will be $30 in 3 years? Nope.
Again, they don't know the PS3 uses a single set of IP for Ethernet and WiFi, $7 between the two 3 years from now is way too high. I'd say $2 for the PHYs, links will certainly be on with another chip.
$5 for Bluetooth in 3 years? It won't drop at all? Smooth move.
These companies stink at estimating parts costs. Just remember, these are stock brokers, not engineers, not parts buyers. They just don't have any clue at all.
http://lkml.org/lkml/2005/8/20/95
Additionally the cell will be used by IBM for things like blade servers and medical devices. So while the initial launch may be rather painful for Sony and cost Sony a lot of money, economies of scale do apply, and the cost will fall. With the use in medical devices for example, I would suspect that Sony and IBM will use that as a major source of revienue to help pay back development costs.
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a research report issued by Merrill Lynch suggests that the Sony PlayStation 3's American release may be postponed until 2007 [...] The official report (pdf) would also seem to indicate that the console will be somewhere in the neighborhood of $900
Is this the same Merrill Lynch that was accused of lying about the health of corporations such as Worldcom and Enron? The same Merrill Lynch that agreed to pay $100 million in fines? The same Merrill Lynch that may owe several billions of dollars to institutional shareholders and others for gross deception?
Remind me why I, you, or any news outlet for that matter, should have any faith in their statements?
That's 'cause it'll be 35 times bigger.
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If this really retails for more than $500, Sony stands to lose more than the game market. HD-DVD is getting ready to debut, with a Toshiba player having an opening street price of around $400 (or less). Blu-ray is opening with a price target of $1000, probably a little less. If the PS3 does not succeed, Blu-ray is, in my opinion, likely lost. An expensive PS3, will limit adoption of Blu-ray and of the PS3. Sony will be ready to take a huge loss on its initial release, and take a huge gamble. But with a cost of $900, there may be no hope.
Laboratree - Scientific collaboration based on OpenSocial.
MRI and CT scanners, next generation ECG and EEG monitors, radiology workstations for the first two.
There are all kinds of things Cell could be used in. Note that a radiology workstation currently is usually a PC, often running Linux with some badly designed software on it that usually costs upwards of $100,000. LOTS of margin.
No. It is not a claim -- per se -- but speculation based on the incredibly large die size. The fact that IBM is ready to ship blade systems in 3q only says that they can get a sufficient supply to meet their expected (very small) market. Sony with the PS3 is quite a different animal. They'll need to manufacture several million units in the first year, which means that any yield problems (even small ones) with the Cell will impact them significantly more than IBM (or other third party Cell blade manufacturers).
And finally you have the PPE, a basic PPC with the out of order execution unit hacked away yet keeping the traditional VMX (Altivec) unit. Why didn't they toss the VMX unit and try to keep OOE?
Because out-of-order execution will ultimately result in instructions being reordered the same way each time. If an optimizer can predict this reordering, such as through a hardware simulation, then it can save this order and generate object files that are already in an optimal order. As I understand it, out-of-order is primarily intended to squeeze out a bit more performance when running programs that were compiled for a different microarchitecture (e.g. 486 1-pipe vs. Pentium 1 UV vs. Pentium 2/3/M 4-1-1 rule vs. the mess that is Pentium 4).
You might be right if these boys were specialist IT analysts, but they aren't they are financial analysts making a series of pretty big assumptions that don't match reality. These are also the folks that hyped the .com as the future and didn't spot the gaming market or mobile markets (don't believe me go and look at the reports from 1999).
So we have the Cell... currently for sale on development boxes... so not quite experimental
We have blue-ray price of $350 a unit, some what odd given that you can already get BURNERS for under $1000. And these are at the low volume end while the PS3 will be high volume.
Then we get the slip until 2007. This is based on the Cell being too new (its in production) and some assumptions.
So in terms of who I'd trust around it? Me I'd go for the IEEE who reckoned that the Cell would be one of the hits of 2006, but hell they are only the most established electronics and computer organisation on the planet.
Don't trust analysts, remember most of them don't beat the market.
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PS3 is looking more and more like the Sega Saturn.
Instead of $900, result is $800
And before posting about other expenses like storage, packaging... Second result $320 is correct. Meaning in 3 years costs would be the same.
It is a sad world when 7 analysts is not enough for simple addition.
If producers of Numb3rs will be looking for new cast, well Merril Linch are the perfect match for braindead victims.
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Actually, previous articles have said that Sony has proclaimed that the lifecycle for the PS3 will be 10 years, not 5. Think about it, if ML is right and it doesn't come out till 2007 in the US, we're looking at between 6-7 years for the PS2, so why not 9-10 for the PS3. Granted, with how fast Microsoft is moving, Xbox 4 should beat PS4 to the market.
Merrill Lynch is about as trustworthy as Shadow from FF3: They'd slight their own mama's throat for a dime!
Ex nihilo nihil fit.
The first game title to be released for the Sony PS3 will be titled "Wall Street Fighter". In this multiplayer game, players use a virtual "Internet" to discuss, predict and ultimately manipulate the retail price of unreleased video game consoles, amassing vast fortunes by buying and selling futures.
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Wow. Who wrote this thing? Ballmer? Anyway, two points:
How does Merryl Lynch know how much components cost Sony? They can know how much a Cell processor would cost you and me, but don't you think IBM would be cutting them some sort of deal? Has this deal been announced to the public so as to allow a specific cost per unit? Maybe. Sounds odd to me, though.
And secondly, I refuse to take seriously any video game article that call this next round the fifth generation of consoles. I guess Meryll Lynch thinks video games started when the NES did.
The part after "aditionally" is blatantly cut/pasted from the Engadget discussion on the same topic found at http://www.engadget.com/2006/02/18/playstation-3-c osts-900-sez-merrill-lynch-mob/#c1063780. Unless this person happens to be the poster of the comment on Engadget (and he didn't bother to direct people to it), it should be modded down even though he makes a great point.
And I didn't direct people to engadget because it's not courteous to slashdot to say "the discussion is better elsewhere" and send people away...
http://lkml.org/lkml/2005/8/20/95
I don't really like either console. The 360 seems to rely heavily on you having a passport account and paying Microsoft a monthly fee for the privilige of owning the box.
I'd be willing to bet that most 360s aren't even connected to a network. The 360 works fine without Live - stop spreading FUD.