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Dee Yun Dee Yun: (contact-deleteme[at]-deleteme-direman [dot] com) 2006-01-25 07:50:01

That's An Actual Quote By Sony Computer Entertainment President Ken Kutaragi

There's been a torrent of speculation about what the Playstation 3 will cost. Industry analysts (people who trick other people into paying for their opinions) have set a range between $399 and $699. That higher mark is right in line with my own off-the-cuff calculations. By no means is this an expert breakdown, but simple observations I've gathered.

The PS3 has 3 major components. The first would be the multi-core Cell processor, which hopes to be a major player in the computer industry. The chip is roughly double the size of a 3.6GHz Pentium 4. Bigger chips simply cost more, and run much hotter requiring additional cooling hardware. The Cell also exclusively uses pricey XDR Rambus memory. Now over time, they'll be able to shrink down the chip and improve manufacturing techniques, driving down the cost. Consumers who are patient enough to wait a couple years into the lifespan of the PS3 will probably be the recipients of a more stable and cooler (literally, I mean) product with lesser incidents of hardware failure. However, as of the PS3 launch, due to its complexity, it'll most likely have at least as many problems with defects as the initial 360 batch.

The 360's chipset is reported to cost Microsoft a little over $100 to manufacture. I haven't found any pricing details on first-gen Cell processors, but one pundit has estimated that it'll cost about 50%-100% more than that of the 360, so let's say $150. So what are you getting for the difference? Theoretically, a mini-supercomputer. It's supposed to be like having nine computers working in tandem. However, it's feared that it'll be horrendously difficult to program for, like training nine crazed ostriches to pull a sled. One developer buddy of mine is also lamenting the utter lack of middleware for the Cell, meaning that they'll have to figure out everything from scratch. With the 360, the only game I've seen that takes advantage of multi-threading is Call of Duty 2 (and it shows), but at least someone's already started to take advantage of the hardware. The Xbox's PC roots may be an asset here, despite the fact that the actual hardware's ceiling is much lower than Sony's.

The second major component is the RSX Graphics Processing Unit. Sony's been flinging around all sorts of benchmarks claims about its capabilities, but it looks like it's roughly an equivalent to the GeForce 7800 (nVidia manufactures both GPUs), which alone retails for about $600. The manufacturing cost is probably $150 or so. As a point of comparison, the 360's GPU costs $141 to manufacture. ATI claims that their equivalent products (for desktops and the GPU in the 360) is more powerful than the 7800 series. Pfft, I'll let their respective marketing departments bicker and call this a push.

The third, and most serious piece of the PS3 is the Blu-ray DVD drive. That $1800 price tag in today's strip is all kinds of deadly Panasonic seriousness. Samsung's chimed in with a $1200 unit. This is Sony's market strategy to defeat the HD-DVD consortium, in a sort of VHS vs. Betamax, round 2. The parallels are too obvious. HD-DVD (VHS) is much cheaper, while Blu-ray (Betamax) is technically superior. Sony's banking that they won't lose this time, by forcibly using the PS3 to push the format. Kudos to them; that's a bold gambit that could pay off in the bajillions. But what does this mean for gamers? Watching movies in hi-def will be awesome, but I'd rather wait to see which consortium wins before buying next-gen DVDs. For gaming this is sheer extravagance. Games don't take up nearly as much space; I can't think of a single game that requires a second DVD. There simply isn't a use for the extra storage capacity of the Blu-ray disc. Well, Final Fantasy XIV may have hours of hi-def FMV requiring more space than a standard DVD, but I'd still rather swap in a second disc than pay the exorbitant cost of Blu-ray.

Let's just tentatively put a $300 manufacturing cost on the Blu-ray drive. This bleeding edge piece of technology requires all sorts of futuristic lasers and difficult-to-manufacture electronic components, so I think that's actually a conservative guess based on the MSRP of standalone players. In contrast, the standard DVD player in the 360 costs a whopping $21.

Manufacturing Costs:

Xbox 360 - Processor ($106), GPU ($141), DVD drive ($21), power supply, controllers, cables ($55), miscellaneous parts ($150):

For a total of about $470 before assembly, meaning Microsoft loses $70 on each unit sold (not even counting marketing and distribution costs).

Playstation 3 (Dire Estimate) - Processor ($150), GPU ($150), Blu-ray drive ($300), misc. parts ($200, no reason the cost of the hard drive, case, fans, controller, etc. should vary too much from the 360):

For a total of $800 before assembly. Assuming that these estimates are reasonably close, and that Sony meets their plan of moving 1 million units this upcoming holiday season, how much of this cost can they actually eat? Let's say they set the price point at $499; that's a whopping net loss of $3 hundred million. That's $300,000,000.00. Yes, Sony's a big fat corp, but that amount would make most first-world national governments blink. I realize that if any of my estimates are off to a significant degree, these numbers change radically, but based on the information available to us, is it that unreasonable to think that the Playstation 3 will cost $599 or even $699?

What Sony's done is assembled the Playstation 4. We've actually hit the point where game consoles are more powerful than top-of-the-line personal computers. If Microsoft hadn't forced Sony's hand, we probably wouldn't have seen the PS3 until winter of 2007. If the PS3 is, in fact, much more expensive than the 360, it will have been the result of the earlier launch window.

Don't get me wrong, I want one, but I may be forced to wait until a significant price drop. The 360 will also have a continued advantage in this department; 360 components will drop in cost far quicker than their more complex PS3 counterparts. This is going to be a very interesting generation of console wars. Can Microsoft do to Sony what Sony did to Nintendo or is the 360 the next Dreamcast? We should get some kickass games no matter what the case.

All of this may be just me talking out of my ass, which is very possible when it comes to speculation of this fashion. If anyone has clearer information, post it in the forums. And if Sony somehow manages to debut the PS3 with an MSRP anywhere near that of the 360's, you'll be able to find me camped outside Best Buy on launch day.

David Vargas David Vargas: (dave-deleteme[at]-deleteme-squishycomics [dot] com) 2006-01-26 00:29:01

Hiya, Dee! Hi, Everybody!

Dave was not meant to own these new toys. I'm not about to shell out what's practically one month's income for a toy that I can only use about an hour or so a day... unless I quit doing these strips which is something I refuse to do.

I suppose that just means I get to keep both my kidneys and simply have fun with the toys when I go visit Dee on the weekends.

Anyway, it's such a nice day, I think I go out the window!

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