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[anexanhume]

I think it's safe to say that all current gen consoles are profitable at their current price points. This generation also has a clearer path to cost reduction with the APUs as well. Eventually the APUs go 20nm -> 14nm -> 10nm and with higher density RAM modules they can stop running in clamshell mode as well. The other general cost reductions come into play like smaller enclosures and simpler cooling as your power consumption goes down.

 

[FlashFlooder]

I think it's safe to say that all current gen consoles are profitable at their current price points. This generation also has a clearer path to cost reduction with the APUs as well. Eventually the APUs go 20nm -> 14nm -> 10nm and with higher density RAM modules they can stop running in clamshell mode as well. The other general cost reductions come into play like smaller enclosures and simpler cooling as your power consumption goes down.

I thought MS was taking a small loss on the
Xbone.

 

[BLACK AMERICAN PSYCHO]

Is this better for you ?

because they think they might be able to take on PS4 at a equal price?

 

[Lynn616]

Yeah, but not for the reasons you think.
SOE was one of the main reasons.

They are projecting a $200 Million profit in the game division for their next full fiscal year. Cutting the price by $50 would cost them at least $500 Million for the year. They are not going to take another year of loses if they dont have to.

 

[Bundy]

Good. Now do a Vita bundle~

Here it is: *CLICK*

 

[Bundy]

They are projecting a $200 Million profit in the game division for their next full fiscal year. Cutting the price by $50 would cost them at least $500 Million for the year. They are not going to take another year of loses if they dont have to.

I'm not talking about the price drop. I'm talking about the reasons for the "loss" of their game division.

 

[StoopKid]

They are projecting a $200 Million profit in the game division for their next full fiscal year. Cutting the price by $50 would cost them at least $500 Million for the year. They are not going to take another year of loses if they dont have to.

How did you get to that number ?

 

[Binabik15]

So you are saying Sony is price-gouging at the moment.

Sales show that they're not "over-delivering on value", at least.

 

[B.O.O.M]

As a gamer you make an enormous sacrifice buying a console. You're essentially buying a PC with extremely heavy restrictions on what software and hardware you can use. In the past this was a reasonable deal since the priceerformance made it a reasonably fair trade. You agree to be locked into their exclusive economy and in exchange they give you hardware that you couldn't get for that price anywhere else - except perhaps from a competing console.

This gen you're getting a console that under performs relative to PCs that can be built for comparable prices. You're agreeing to lock yourself into their exclusive economy and getting what in return exactly?

To play the games.....

holy cow how dramatic can you guys get lol There is no 'sacrifice'....console gaming has it's own appeal and it has it's own market segment to cater to. Depending on the PC you buy you will also have heavy restrictions on the software you play.

I mean no one is asking a consumer to be 'locked in' with a console purchase. Not happy with it? Sell it. Move on. I personally want the companies making games/hardware to do well and spend the money that they make into gaming. Taking huge losses on the products they sell isn't good to anyone in the long term.

I can't believe I'm seeing people actually angry/disappointed about this news in this thread...smh

 

[shinra-bansho]

Priceerformance ratios aren't why the console market has evolved into a multibillion dollar industry.

Mainstream consumers buy consoles now for the same reason they bought consoles then. Ease and accessibility.

 

[Suzushiiro]

I think it's safe to say that all current gen consoles are profitable at their current price points. This generation also has a clearer path to cost reduction with the APUs as well. Eventually the APUs go 20nm -> 14nm -> 10nm and with higher density RAM modules they can stop running in clamshell mode as well. The other general cost reductions come into play like smaller enclosures and simpler cooling as your power consumption goes down.

"and with higher density RAM modules they can stop running in clamshell mode as well."

What do you mean by that?

 

[B.O.O.M]

Cut off one head, two more shall take its place, the only outcome.

hail Hydra!

 

[Lynn616]

How did you get to that number ?

$50 times 10 Million units sold for the coming year. Could be more.

 

[quetz67]

i dont get it either. What this means going forward is subsequent generations will probably follow the same path and cutting edge technology will fall by the wayside and go toward more a more safe solution. But hey, if that's what gamers want

No, rather a $900 machine for $599 where most of the money goes into an overpriced blue laser (which was nice but not really that much) and overpriced Cell processors that in the end took the whole generation to be put to use better than the competition.

I applaud Sony that they tried, but the PS4 'standard components' solution is obviously superior. And 8GB of unified GDDR5 memory is obviously a damn fine solution for the price.

So we are back at the competition argument that they don't need to try anymore next time. That is nonsense as they want to sell thir next hardware and want the games to look significantly better without losing more ground to PC hardware.

 

[StoopKid]

because they think they might be able to take on PS4 at a equal price?

Lol you really think ms would have two price drops ?

 

[swazzyswess]

Cool, maybe pump another buck or two per unit into better rubber for the controllers.

 

[gatti-man]

All this means to me is sony should have packed in a better gpu/cpu. If you want long generations you need better hardware. I predict this generation lasts 5 years or less due to the less than powerful hardware. It's too tempting for a loser console like the wiiu or x1 to hit the reboot button then shoot for the stars hardware wise like the 360 did.

 

[Shmuely Bully]

There's a very good reason for them to. Cutting the price by $50 will pretty much kill the Xbox One in the States, the only territory that the Xbox One is doing okay in. A small price cut like that will easily be covered by software bought for the system and PlayStation Plus subscriptions...and will also return the status quo of the PS4 being the most powerful machine for less money.

It would be an astute business decision to cut the price.

You need data to support that conclusion, especially with the kind of money we're talking here. If Sony is already leading with the PS4 at its current price stateside (it is), the lead is growing (it is), and sales aren't slowing more than they're expecting (unknown), then they would have to determine that it would actually hobble the Xbox One well enough to make up for any lost profits from the $50 lower price. What if they cut the price and it barely changes things?

It's not quite as simple as this, but imagine if they drop the price now and lose $30 in revenue per unit, lets say they sell 10 million units this year and you're talking a reduction in revenue of $300M USD which isn't chump change.

Add onto that any increase in sales would come with an increase in costs and that it may put their hardware back into the red and you'd really have to be confident that it would benefit the platform enormously in the future compared to the current status quo. I'm pretty sure I wouldn't make that choice until the sales data forces your hand.

 

[Shengar]

Most companies aren't forecasting billion dollar losses and selling off HQ buildings. Sony's financial situation is entirely relevant to this discussion.

Sony clearly not in the position to sell millions of consoles in loss. Their past srategy of delivering value over price with the PS3 completely due to how it's insanely more expensive than it's competitor. Sony could repeat the same strategy, making PS4 as powerful as a $600-$800 PC and sold it at $400, but it means they'll just kill themselves. This isn't the PS2 where people adopting DVD format like crazy. Sony could only repeat the same strategy if they have VR so mass audience will adopted it regardless of price.

All this means to me is sony should have packed in a better gpu/cpu. If you want long generations you need better hardware. I predict this generation lasts 5 years or less due to the less than powerful hardware. It's too tempting for a loser console like the wiiu or x1 to hit the reboot button then shoot for the stars hardware wise like the 360 did.

This'll be a short generation. PS4 is pretty much the prototype of PS5 for delivering the VR experience, the next entertainment that Sony hoped could be adopted by the masses.

 

[StoopKid]

$50 times 10 Million units sold for the coming year. Could be more.

I'm gonna go out a limb and say there's more to it than that.

 

[HI. BILLY MAYS HERE]

Most companies aren't forecasting billion dollar losses and selling off HQ buildings. Sony's financial situation is entirely relevant to this discussion.

Hasn't MS lost billions hand over fist on the xbox division ? It's irrelevant to the separate other divisons of the both companies.

But my all means let's keep beating this dead horse.

 

[heidern]

There will never be a spring price cut. Price elasticity from February to October is historically very poor for gaming products. Any price cut will be timed for September/October.

There's historical precedent from Sony themselves:

PlayStation 2 price cuts Country
United States October 2000 $299 (launch price)
United States May 2002 $199 (-$100)
United States May 2003 $179 (-$20)
United States May 2004 $149 (-$30)
United States April 2006 $129 (-$20)
United States April 2009 $99 (-$30)

PS4 sales figures are dropping substantially, the hardware is profitable, E3 and its associated free press/marketing is imminent.

Sony will have a better idea of the trajectory of sales than us so an E3 price cut is possible if they think it'll drop further. But they have got games releasing over the next few months to try and boost sales(The Show/Watchdogs this month, Destiny in September). They'd probably prefer to rely on those. Last quarter they might be able to sell 5-6M? That might be enough to get them through their stock.

Also, any losses incurred with a price cut will be partially mitigated by higher profits due the increased sales of software/accessories.

 

[SolidSnakex]

As a gamer you make an enormous sacrifice buying a console. You're essentially buying a PC with extremely heavy restrictions on what software and hardware you can use. In the past this was a reasonable deal since the priceerformance made it a reasonably fair trade. You agree to be locked into their exclusive economy and in exchange they give you hardware that you couldn't get for that price anywhere else - except perhaps from a competing console.

This gen you're getting a console that under performs relative to PCs that can be built for comparable prices. You're agreeing to lock yourself into their exclusive economy and getting what in return exactly?

But is that really anything new? In past generations if you had the money then you could have a PC that could outperform what was available on consoles. The arcades during Sega's Model and NAOMI days were the only place that could really outpace PC's. You were always agreeing to less performance than the PC if you went with consoles. And people were and still are okay with that. Because many simply prefer consoles over PC's. They like the idea of buying a box, putting it in their entertainment center and knowing that whenever they buy a game they can just put it in and start playing. They don't have to worry about anything else. No worries about drivers, cards not playing well with certain games etc.

 

[Nibel]

Greatcash awaits

 

[Justified]

"and with higher density RAM modules they can stop running in clamshell mode as well."

What do you mean by that?

Simple version: GDDR5 is "installed" in the PS4 in clamshell mode. What this means is you have chips on both side of the "motherboard." So for each one chip you really have two.

advance:
Clamshell Mode
The GDDR5 SGRAM can operate in a x32 mode or a x16 (clamshell) mode to allow a clamshell configuration
.
The mode is set at power-up.

The benefit of clamshell mode is that users are able to quickly react on changing market conditions by easily creating new product variations. E.g., by taking the same component from the inventory, utilizing the same controller, PCB layout and memory channel width, the user can decide on the actual framebuffer size at a very late stage of the manufacturing process by

• either populating only one side of the PCB and configuring the GDDR5 to x32 mode, which results e.g. in a 1GB framebuffer by using 8 pieces of 1Gbit with a 256-bit wide memory interface at the controller;
• or populating both sides of the PCB and configuring the GDDR5 to x16 mode, which results e.g. in a 2GB framebuffer by using 16 pieces of 1Gbit with a 256-bit wide memoryinterface at the controller.

Clamshell mode has no performance penalty because it preserves the point-to-point connection on the high-speed data bus. The shared address and command interface can easily be connected by vias in the PCB andthe use of mirror function mode which lets these pins appear at the exact opposite locations.


H/T: USC-fan



Sony is using 4Gb density chips clamshell mode. 8 chips on top, 8 on the underside to achieve 8GB with 256bit bus

 

[Liha]

The next annual report will be very interesting. I hope that Nintendo reads that a few times.

 

[Shin-Ra]

I thought the wobble only happen if you push down that one side since all the weight is on the right?

Cats like to sit on shiny, warm games consoles and the wobbly might scare the shit out of them.

 

[Nymphae]

You're agreeing to lock yourself into their exclusive economy and getting what in return exactly?

Essentially, convenience. And exclusive games. I have a PC now, but I certainly remember a time when it was simply easier and preferrable to not have to worry about anything tech related. Buy console, buy games, play them. I know the PC elitists scoff when anyone claims a certain degree of work needs to go into building a decent rig, but it's reality, and a lot of people don't want to deal with that shit.

 

[CCIE]

If Sony wanted to step on MS throat and put them away while they are reeling on the ropes, they would announce a $349 price point at E3, and destroy any momentum MS might gain.

It would be a bloodbath...

 

[Dire]

Those PCs that can match and exceed the PS4's power also far exceed its price.

You have to strike a balance and Sony did just that.

Not true, which is the big issue this gen.

Even sites like Gamespot are running articles on this: http://www.gamespot.com/articles/can-we-build-a-gaming-pc-on-a-console-budget/1100-6418829/

They build a couple of systems that substantially outperform the PS4 for substantially inflated prices of around $550 each. I say inflated since they randomly decided to include tax, which most people will not pay when ordering online and $70 for a windows license which is silly if you do 10 minutes of shopping around, let alone if you already have an existing license you can transfer. They also randomly added in higher performance (and cost) things like a 7200 RPM HDD when the consoles use cheaper 5400 RPM drives.

The actual price is shockingly close to a retail PS4 price. It doesn't actually make any sense. First off those systems are not just pushing for parity, they're outperforming the PS4 and when Sony orders 5million units straight from the manufacturing line they are certainly getting a heck of a lot better deal than you or I do ordering items piecemeal from third party retailers. I shouldn't be able to get a PS4 comparable PC for a comparable price, but I can.

 

[jcm]

http://www.neogaf.com/forum/showthread.php?t=819775

Sony chose to not publicly announce the sales figures. They were leaked in that thread. I thought I was being cynically bearish on my prediction for April. They shocked me with how bad they ended up. That is of course "just" the US. I'm assuming it will be a metronome for the rest of the world as we segue from the initial hype sales to the next phase.

Sony hasn't announced their NPD numbers in years. The fact that they continued to do so is indicative of nothing. Their sales are good, and they're going to hit their forecast without a price cut.

It's funny that we enjoy seeing sustainable business practices?
If we want to continue to enjoy more products by Sony in the future, we don't want them to tank, lose a ton of money, and then potentially cease to make products in the future. Or in a better case scenario, they will be looking for that revenue elsewhere.

Yes, I think it is funny. I think of it as somewhat akin to the airline business. A few years ago, there were a ton of US airlines engaged in a cutthroat competition. None of them were making any money, but I could fly to Europe for about $500, and the FF miles they gave away like candy meant I could frequently get an upgrade. It was glorious.

Now they've bankrupted or merged into a few survivors. They all make money, but it costs me $1200 to fly to Europe, and my FF flyer miles aren't worth the paper they're (not) printed on. It's worked out OK for the surviving airlines and their shareholders, but it's nothing I'm happy about.

 

[Clockwork5]

I thought the wobble only happen if you push down that one side since all the weight is on the right?

Yup sounds like a solid, quality design choice to me.

I have no problems with the PS4. I am merely observing that the build quality is cheap.

And cheap exterior parts and shortcuts that leave the optical drive spinning at a slight angle suggests that there are other "cost saving features" internally. This part is only speculation though.

 

[Jimmyfenix]

As Kaz would say "Wow"

 

[George Claw M.D.]

I did not expect the driving gloves

Those gloves aren't for driving.

 

[Slayven]

Someone should do a "On your left" gif with Kaz.

 

[Pain]

Awesome. Dat first prices drop will probably come sooner than many think.

 

[Rogue_Ledr]

They need the money, so I'm glad the hardware is paying dividends.

 

[theWB27]

As a gamer you make an enormous sacrifice buying a console. You're essentially buying a PC with extremely heavy restrictions on what software and hardware you can use. In the past this was a reasonable deal since the priceerformance made it a reasonably fair trade. You agree to be locked into their exclusive economy and in exchange they give you hardware that you couldn't get for that price anywhere else - except perhaps from a competing console.

This gen you're getting a console that under performs relative to PCs that can be built for comparable prices. You're agreeing to lock yourself into their exclusive economy and getting what in return exactly?

Exclusive games we can't play on PC. Which...is what gaming boils down to. You can spit all the power to cost ratio BS you want....tell me if i can play the games I want to play on PC. Until that happens....that's the biggest return you need.

 

[d0nnie]

This is great news for Sony. They've done an outstanding job with the PS4, so this is no surprise.

PS4 does not need a price cut, I don't know why people are suggesting it. The XBO only had a temporary price-cut (to drive the Titanfall bus), and the new Kinect-less SKU is not a price drop.

So why should the PS4, being the most successful console offer a price drop?

 

[Hydrargyrus]

Nice Job Kaz, you are the man!!

 

[Clockwork5]

I don't know why people want future proof consoles. Give me 4 year console generations with BC any day.

 

[xxracerxx]

Yup sounds like a solid, quality design choice to me.

I have no problems with the PS4. I am merely observing that the build quality is cheap.

I have actually never seen a PS4 in real life so I am just curious really, not arguing that it isn't cheap.

 

[Steroyd]

That means it's feasable to price drop by this holiday, although highly doubtful they would given that sales aren't crawling, bundles would come first but a $100 first price drop might not be insane.

 

[Shin-Ra]

And cheap exterior parts and shortcuts that leave the optical drive spinning at a slight angle...

Why would it be at an angle unless you've placed a heavy object on the shiny end of the console?

...suggests that there are other "cost saving features" internally. This part is only speculation though.

If the internal shortcuts are as fatal as using three feet instead of four for vertical placement aesthetic improvement, there's SERIOUS problems ahead.

 

[MaximumSpider]

Illinois and Wisconsin: The New Zealand of the USA.

I live in Wisconsin and I can confirm this.

Spoiler

Not really.

 

[Corto]

They learnt a lot from the PS3.

Strange how Sony learnt from failure, but Microsoft didn't learn from success.

That's normal though. Success leads to complacency, and failure, if not critical, leads to analysis of what went wrong and course correction. One could argue that Microsoft learnt very well from their failures and corrected the course very swiftly considering it's a mammoth of a company where inertia can be a problem.

 

[Clockwork5]

Why would it be at an angle unless you've placed a heavy object on the shiny end of the console?

Because in order to be able to wobble the console must first be resting at an angle.

I have checked with a carpenters level.

I have actually never seen a PS4 in real life so I am just curious really, not arguing that it isn't cheap.

I think it feels cheap, the wobble and creaky plastic case... It could just be mine but I have heard it on these forms from others.

 

[PhantomFear]

I'm wondering if the new model that is rumored will come with an early price drop. Well, not as early as the XBO price drop, but still early.

 

[WooHooAlex]

No way they cut the price this year. Rather than slashing the price by $50, I think Sony will start adding value to the box in the form of bundles. I bet we'll see Last of Us and Destiny bundles this year. And then one of their holiday bundles that includes two games.

 

[anexanhume]

I thought MS was taking a small loss on the
Xbone.

Not from the estimated BOM. Have a link?

"and with higher density RAM modules they can stop running in clamshell mode as well."

What do you mean by that?

Right now, for each data trace going to the RAM, there are 2 RAM modules connected to it, one on the top of the PCB, and one on the bottom (a clamshell). When RAM module densities improve, they can condense these RAM modules into one since all of the pins are essentially redundant.