Reply With Quotei think this gen will break at least 1 of the hardware companies.
Berserk
Sony is taking huge hits just to beat the DS. To believe Sony won't do the same to maintain it's number 1 dominance in the console sector is ignorant.
So much ****ing semen.
i think this gen will break at least 1 of the hardware companies.
is cuter than you
The big question is, who is saying this? Sony? If it is Sony, then how do we know that they aren't just giving us a line of BS? If it is somebody else, how do we know that they don't have a clue what the actual manufacturing cost is?Originally Posted by StriderKyo
I'm not saying this article is true, I'm just saying that you can't used a supposed manufacturing cost number as proof that it isn't unless we are certain of where that number is coming from.
WARNING: This post may contain violent and disturbing images.
can't wake up
I believe it was Morgan Stanley analysts and investors. It's literally their job to analyze crucial components of company's businesses and act on them. They put their money where their mouth is, too - these people buy up Sony bonds and stocks and invest in the company, which provides the capital Sony needs to launch these systems (and other things). They have nearly as much interest in Sony's success or failure as Sony themselves, albeit without that crusty layer of bias you'd expect from the horse's mouth.
Last edited by diffusionx; 27 Aug 2005 at 04:16 PM.
or bust.
It's not Sony, it's Merill Lynch Japan:
Report: PS3 to sell for $399, cost $494 to make
Merrill Lynch Japan predicts Sony will lose more than $1 billion on hardware during its next-gen console's first year on the market--a sum it may not be able to recoup.
According to the latest issue of Japanese magazine Toyo Keizai, 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.
Merrill Lynch Japan estimates that the machine's main components--namely its Cell chip, RSX, and BD-ROM drive--will cost about 11,000 yen ($101) each. After adding the other electronics that will be used in the PS3, the machine's production cost goes up to 54,000 yen.
Given that Sony's PS3 will face stiff competition from Microsoft's Xbox 360, the chances that Sony will release its console at its production cost is slim. Under the assumption that the Xbox 360 is expected to sell at around $299, Merrill Lynch Japan predicts that Sony will sell each PS3 at the price of 44,800 yen ($410) in Japan and $399 in America. That would mean Sony would suffer a loss of more than 130 billion yen ($1.18 billion) during the first year of the PS3's release.
By comparison, the PlayStation 2 cost 39,800 yen ($364) in Japan and $299 in America when it launched in 2000. 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.
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.
However, Merrill Lynch Japan warns that the normal console business cycle may be disrupted if Microsoft cuts the Xbox 360's price when the PlayStation 3 launches. The report goes on to say that such a move could hurt Sony's plans, bringing an additional loss of 80 billion yen ($730 million) in its second year and 50 billion yen ($457 million) in its third year. Thus far, Sony has already invested 200 billion yen ($1.83 billion) into development and production for the Cell chip alone.
Toyo Keizai goes on to interview Sony Computer Entertainment president Ken Kutaragi, who avoided revealing the PS3's price but hinted that it would not be marked down excessively. "Whether consumers think a product is expensive or cheap all depends on the balance between its appeal and price," he said. "Our ideal [for the PS3] is for consumers to think to themselves, 'OK, I'll work more hours and buy it.' We want people to feel that they want it, no matter what."
"When Nintendo was selling its 16-bit machine at around 12,500 yen ($114), we sold the first PlayStation at 39,800 yen ($364)," continued Kutaragi. "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."
-Kyo
Load"*",8,1
Wouldn't it be funny, if Nintendo came in with the Revolution and stole the show. The only thing that has me concerned about Nintendo's console, is getting 3rd party support to showcase the hardware.
I agree, and only one is vulnerable in this industry, and it's not one of the Japanese ones...
So much ****ing semen.
oh theyre all vulnerable. some more than others. if nintendo fails its 3rd party and handheld for them. if sony fails......well who knows, but they more than likely, have the least chance to do so.
If Nintendo's handheld market fails on them, we're all fucked, because that's a sign of the apocalypse. Give me a break. No one is in danger here but Microsoft. Sony and Nintendo made tons of money this generation. Microsoft didn't. Don't forget that.
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