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PSP manufacturing costs $350 higher then those ~$200???
- Thread starter McFly
- Start date
Well, that doesn't take into account manufacturing lines and design revisions (EE+GS on one chip) being in PStwo's favor though. I'm not really sure you can just look at a spec sheet and say "PSP & PS2 seems comparable, that means they probably cost about the same". You're also not taking into account that smaller/portable technologies are inherently more expensive either... I really don't think PStwo is a good base for anything concerning PSP's costs, except maybe to imagine how future PSP revisions might shave costs.Drek said:
They may not have that quality of screen, but they have a bunch of hardware that PSP doesn't have either, as well as more memory, higher clocked cpus, etc. The way I see it, for 500$ you could put together a PSP specced machine using nothing but off-the shelf components.jarrod said:
Fair enough, but you're not the only one with sources here, and in regards to this I much easier trust those I know - especially since they are as close to 1st hand info as I'm likely to get, as opposed to assorted rumours from Japanese game companies (though we do have contacts with some of them too)JackFrost2012 said:
JackFrost2012
Banned
drohne said:
Don't worry, I'm not very impressed with me, either.
Panajev2001a
GAF's Pleasant Genius
Fafalada said:
Well, the volume they are manufacturing things at is quit elow for now: I do not think Nagasaki #2 is completely at peak production (considering people are still finishing up things in that fab) and they arleady have to push out the EE+GS#90 nm from those lines.
There is a number of factors that is causing the manufacturing volume to be low hence the initial internal cost of the console to be higher: if I wanted a Ford Focus custom made for me in a way that causes Ford to have to stop the lines modify them for me, produce the care and set them back... well let's say that they would ask me more than $20,000 for the car
. I know I am stretching the example, I am trying to get my point across.I believe that Sony is pushing PSP out this December even though their production volume is not very high.
If that is true that would explain the cost per unit for Sony and would also mean that in a few months this cost should dramatically fall.
This won't mean that they will start to make profit on each unti sold, but the losses will go down a lot: say maybe $100 or less compared to over $300 now.
Then you can keep cutting costs by pushing manufacturing volume even higher and integrating more components: at 65 nm you mgiht be able to fit the 32 MB of external DRAM on the chip itself.
The last barrier to cost reduction will be the screen, but if the PSP sells in large qauntities it won't be difficult for Sony to re-negotiate a better deal with Sharp as those outsorcing deals are usually based on a certain number of units manufactured and shipped.
That was probably the original plan, hence Sony Germany accidentally revealing that 33,000 yen pricetag in early October. DS came in under what most expected (18,000-20,000 yen) and Sony reacted accordingly... too bad Nintendo didn't go all the way and announce 10,000 yen. Then things would be a real bloodbath.Insertia said:
Why bother renegotiating, just bring screen production inhouse once that Samsung partnership's under way (mid 2005). That'll shave immense costs.Panajev2001a said:
Panajev2001a
GAF's Pleasant Genius
Jarrod, but they would have to make sure the screen has the same quality or people will be very pissed.
Can they do that ? Maybe, their partnership with Samsung for 7th generation LCDs should produce some interesting results.
Can they do that ? Maybe, their partnership with Samsung for 7th generation LCDs should produce some interesting results.
PPCs are produced in 500k-1M per year, and that's for succesffull models only, and generally the silicon is outsourced as well. No - volume doesn't explain that number in the least.Panajev said:
Now perhaps they are unable to mass produce period - whether due to some design fault or just plain process lagging behind schedule - and that's why they would be paying some exclusive premiums just to get a few units in before end of 2004. But that would definately mean that eventual shortages wouldn't be artifically created as suggested by JackFrost, but rather just actual inability to produce the required quantity.
Panajev2001a
GAF's Pleasant Genius
The plot thickens.
I would say then shortage due to the 90 nm process lagging and EE+GS@90 nm getting a bit more precedence.
JackFrost2012
Banned
Fafalada said:
Er ... that was what I said, I thought. Of course it's not an artificial shortage; it's an actual inability to create more than X number of units. And I'm glad to see that even Mr. Sony Spin himself is more or less supporting my story, which is: it costs Sony 5 man each for those units they're rushing to store shelves Dec. 12, of course not that the PSP costs Sony 5 man to make them forever and ever.
I was talking with someone tonight and we agreed that the advantage of launching at such a low price isn't with consumers, but with developers: at $299, developers will take a "wait-and-see" attitude, but at $199, they'll start making games immediately. 12-18 months from now, you're gonna see a lot of great PSP games.
JoshuaJSlone
Member
Make it even smaller. Add speakers. Add a screen. Add a battery. Add WiFi.Lhadatt said:
I don't get it. You really think it might cost ~$500 to make now, but you also think it's possible that will drop by ~$300 in under 2 years?JackFrost2012 said:
Well it's not like the info you guys have is usually unreliable, and Pana wouldn't suddenly turn around on thatJackFrost said:Er ... that was what I said, I thought. Of course it's not an artificial shortage; it's an actual inability to create more than X number of units. And I'm glad to see that even Mr. Sony Spin himself is more or less supporting my story, which is: it costs Sony 5 man each for those units they're rushing to store shelves Dec. 12, of course not that the PSP costs Sony 5 man to make them forever and ever.
. If I didn't have contradicting info from another side I wouldn't be arguing much about it either, but really, right now I just don't buy this.But if you're right that just lends more credence to the "paper-launch" theory that has been mentioned before by aaaa0.
Definately agree there, especially in Japan I think initial shipments would go fast at a higher price regardless. But noone will be willing to throw full support unless we believe the machine is a real competitor in the handheld market, and the price tag pretty much seals it.
jarrod said:
It would have retained that $300 price if were actually a $500 piece of equipment. Losing $300 in this market, at this time isn't a logical decision. Maybe if it were a crystal clear path to success taking a $350 hit would make sense, but it isn't. Looking at PSP's specs and knowing 50% of the components are coming from Sony, I don't believe it even warrants a $550 price tag.
But if they're only losing $300 on probably 1-3 million units or so, why not do it? It puts their main competition on the defensive and warms the industry to their side early on, and supply restrictions guarantee they won't lose their shirt on it too. The more I think about it, the more this move makes sense.Insertia said:
Panajev2001a
GAF's Pleasant Genius
JackFrost2012 said:Er ... that was what I said, I thought. Of course it's not an artificial shortage; it's an actual inability to create more than X number of units. And I'm glad to see that even Mr. Sony Spin himself is more or less supporting my story, which is: it costs Sony 5 man each for those units they're rushing to store shelves Dec. 12, of course not that the PSP costs Sony 5 man to make them forever and ever.
I was talking with someone tonight and we agreed that the advantage of launching at such a low price isn't with consumers, but with developers: at $299, developers will take a "wait-and-see" attitude, but at $199, they'll start making games immediately. 12-18 months from now, you're gonna see a lot of great PSP games.
Mr. Sony spin ?
Well, I am agreeing with you because I can now see how the words of Kutaragi and your theory can make sense together.
I thought you meant that the PSP costed tons of money to manufacture regardless and that there was artificial shortage.
Mr_Furious
Member
The PSP does not cost $550 to manufacture. This thread is stupid :-\
I don't understand why people argue with jarrod. There is no evidence to what the psp costs.
Jarrod keeps saying that nintendo forced sony to lower the price to $185 even though SONY says they had not made up their mind till the last minute..... who to belive who to believe...
A high end PDA with everything cost around $500 and that is with companies making a lot of profit..... and with most of the parts being made outside... somehow sony's psp cost that much to make, has less memory, less connections, less of everything plus is at least half built inhouse...... HHHmmm does anyone use their brain here?
Jarrod keeps saying that nintendo forced sony to lower the price to $185 even though SONY says they had not made up their mind till the last minute..... who to belive who to believe...
A high end PDA with everything cost around $500 and that is with companies making a lot of profit..... and with most of the parts being made outside... somehow sony's psp cost that much to make, has less memory, less connections, less of everything plus is at least half built inhouse...... HHHmmm does anyone use their brain here?
CrimsonSkies
Member
I could personally give a damn. At that price I may buy one, and if it had been higher I wouldn't even be looking at it. That's all that matters to me.
Wasn't the ps2 losing $350 per unit for the japanese launch. I very distinctly remember reports from that time and how analysts were worried that Sony were effectively sacrificing the equivalent of one years software sales. If they sell 200k units, that is a loss of $70M. For 500k units by year end it is a loss of $175M. Certainly manageable.
Of course I doubt it will be the case for the entire first 3M units, that would be an instant loss of over a billion dollars. It is however very risky. The ps2 had basically a clear run, but the psp will have direct competition. If Nintendo start cutting the price down the line, that could put pressure on Sony. Losing hundreds of dollars per unit now isn't so bad. But losing $50-100 when you are talking about 10s of millions of sales is a whole different kettle of fish.
Of course I doubt it will be the case for the entire first 3M units, that would be an instant loss of over a billion dollars. It is however very risky. The ps2 had basically a clear run, but the psp will have direct competition. If Nintendo start cutting the price down the line, that could put pressure on Sony. Losing hundreds of dollars per unit now isn't so bad. But losing $50-100 when you are talking about 10s of millions of sales is a whole different kettle of fish.
I think they might actually be trying to flatten it as much as possible. The PSTwo just came out, and the PSP right on its tail. The PSTwo should be a caash cow if its sales come anywhere near the PSOne. That could help buffet the losses from the PSP, which if profitable by the end of the next fiscal year is gonna help buffet the losses from the PS3. I guess they have to hope most people don't just do like I'm gonna do and buy a PSP instead of a PSTwo. Or maybe they want that, I don't know. I think PSTwo sales have to stay up...or get up. PEACE.DarienA said:
Uh, in case you missed it... I don't think PSP costs $550 to manufacture. Not that I expect you of all people to actually pay attention.sohka88 said:
And who's arguing with me exactly?
Probably between $100-150. It's pretty cheap tech, though two screens and added interfaces keep it from being GB level cheap.sohka88 said:
NO. Sony lost $250M or so...$150M their first year. I mean the gaming business. It was a drag that year, but they also sold like 10M units that first fiscal year. So you have to figure they were losing alot, but more along the lines of $150 or so. I don't think Kutaragi's ever owned up to an actual number here. I doubt they'd gamble on losing so much on early run of a device that has historically low tie-ratios. They'll hope to change that, but losing $350 is too much money. That's suicide. PEACE.heidern said:
Chittagong
Gold Member
Fafalada said:
No extreme raping was 185$ for Magical Quest starring Mickey Mouse on Super NES in Finland in 1993. That was the MSRP.
I have it from a reasonably solid source that the cost to assemble a PSP unit is around 20,000 yen. The cost to have a finished retail box on the shelf (after store margin, packaging, etc) is around 24,000 yen.
So to price the PSP at 19,800, Sony is losing roughly 5,000 yen per PSP, or about 50 US$, nowhere near the $150-$200-$300 US$ people are speculating.
But this could all be bogus information, so take it with a grain of salt.
So to price the PSP at 19,800, Sony is losing roughly 5,000 yen per PSP, or about 50 US$, nowhere near the $150-$200-$300 US$ people are speculating.
But this could all be bogus information, so take it with a grain of salt.
Oh yeah... even the original GBA, which was estimated to cost around $30-35 for manufacturing near launch. I wouldn't be surprised if SP cost Nintendo less than that to make now. Game Boy has always been low tech for so Nintendo can maximize battery life, durabilty and profit.sohka88 said:
Sony Germany, the slide during their press conference evidently wasn't pulled in time.sohka88 said:
Doom_Bringer
Banned
xexex said:
I gotta agree.
radioheadrule83
Banned
Mrbob said:
Could be, but I doubt it. As I recall weren't there meant to be PSP announcements sooner, and then Nintendo jumped the gun?
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