PS3 Game cost what!?! Don't complain to Sony!

Fred Buchanan 27 Jun, 2008 at 3:09pm ET Article published in Tech

Comments

1. 
   27 Jun 2008 ~ 3:35pm Snarkasm And they're cackling gleefully the ENTIRE TIME, and you're not thinking it through hard enough if you don't think so. They will rack up the dough thanks to BR sales, their own movie sales, and game royalties, both disc- and PSN-based. Not to mention the impending chip-shrink will finally make the actual PS3 profitable as well. Sony's looking just fine.
2. 
   27 Jun 2008 ~ 6:17pm airbornflght Yeh, the chip shrink will be the turning point. From then on they won't be taking a loss on the consoles iirc.
3. 
   27 Jun 2008 ~ 6:28pm RADA I'm not sure I follow this logic for the above posts...
   
   
   ..We (Sony) spent a ton of $$ on a gaming console we're selling for a loss, and we're not selling enough of said consoles or games to offset our initial loss...
   
   ...in the mean time we're also spending a ton of money on R&D and manufacturing of a newer smaller chip for our next console we'll have to sell at a loss also.....
   
   I'm confused...
4. 
   27 Jun 2008 ~ 7:38pm Snarkasm They're not spending a ton of money on R&D. Miniaturization is a standard process, it just takes better manufacturing techniques. They're not redoing Cell and RSX chips, they're just building them better. And if you had read a little closer, the chips will end up costing LESS to make which means if they keep the price stable, they can raise the profit margin, and thus come out in the black. The newer smaller chip is for THIS console - they put it in, ship more systems, and become profitable again.
   
   Meanwhile, they've embedded a Blu-Ray player in every PS3-owner's home, whether they bought it as a game console or as the cheapest Blu-Ray player on the market (which it is, last I checked), and is CERTAINLY the best BR player out there (a simple firmware patch will make the player profile-compliant, whichever ****ing standard they settle on), and you know who sells BR items? Sony and their movie studio that they have there in their back pocket. They're also on the Blu-Ray pimping committee, which means they had a vested interest in taking a loss on their console just to sneak BR into every home they could.
   
   To summarize: they trojan-horsed BR into all the living rooms they could so they'd have a base to which to sell the standard overpriced fare (accessories, games, movies), while still positioning themselves as the cheapest and best BR player for those that are just trying to get into the market now that the "war" is over. Now that they've optimized their manufacturing processes and are stripping out hardware left and right (no more backwards-compatibility chips, some models don't have card readers, etc etc etc), the costs are going down and they'll be able to turn a profit on them.
   
   They're turning around the PS3-only losses, while still having that chip in their pocket of a way to sell you lots more crap down the road.
5. 
   27 Jun 2008 ~ 8:00pm NiGHTS Consoles find more profits in the licensing of their games for development and play than they do for the actual console.
6. 
   28 Jun 2008 ~ 11:57am Winfrey

   NiGHTS wrote:

   Consoles find more profits in the licensing of their games for development and play than they do for the actual console.

   
   absolutely true.
7. 
   28 Jun 2008 ~ 1:38pm Winga

   Snarkasm wrote:

   To summarize: they trojan-horsed BR into all the living rooms they could so they'd have a base to which to sell the standard overpriced fare (accessories, games, movies), while still positioning themselves as the cheapest and best BR player for those that are just trying to get into the market now that the "war" is over.

   
   That is a brilliant synopsis, and IMHO right on the money!
   Things would have turned ugly though if they hadn't won the BR war.
8. 
   28 Jun 2008 ~ 11:51pm airbornflght It had been over for quite a while. Toshiba was just dragging it out. As much as I liked HD DVD I guess free market capitalism worked as the public voted with their dollars.
9. 
   29 Jun 2008 ~ 12:11am Snarkasm

   airbornflght wrote:

   As much as I liked HD DVD I guess free market capitalism worked as the public voted with their dollars.

   
   That statement is SO ****ING WRONG I won't even begin to correct it.
10. 
    29 Jun 2008 ~ 2:09am tmh88 The inferior product won again...This time for the other side.
    
    Actually, snark, I kinda do have to agree with ABF on this one. From what I've heard/read, HD DVD had stricter picture/audio regulations than blu ray. I've seen movies on hd dvd that look amazing, and the same exact one on blu ray and it just looks alright. I've read numerous articles on both formats. I'm not saying blu ray is bad, which it isn't at all. Blu ray has amazing quality too, but not from the same movie to movie. I think blu ray won because non-tech people know "bigger is better" and see that blu ray stores much more. Blu ray also just sounds a lot nicer than hd dvd for another thing...and yea, that definitely adds to it when you get people involved who don't even know what the word resolution means. So yea, the general public who aren't extremely "tech informed" decided to go blu ray probably because of the "bigger is better" philosophy along with many other factors...that and ps3 helped a ton.
11. 
    29 Jun 2008 ~ 2:27am Snarkasm

    tmh88 wrote:

    The inferior product won again...This time for the other side.
    
    Actually, snark, I kinda do have to agree with ABF on this one. From what I've heard/read, HD DVD had stricter picture/audio regulations than blu ray. I've seen movies on hd dvd that look amazing, and the same exact one on blu ray and it just looks alright. I've read numerous articles on both formats. I'm not saying blu ray is bad, which it isn't at all. Blu ray has amazing quality too, but not from the same movie to movie. I think blu ray won because non-tech people know "bigger is better" and see that blu ray stores much more. Blu ray also just sounds a lot nicer than hd dvd for another thing...and yea, that definitely adds to it when you get people involved who don't even know what the word resolution means. So yea, the general public who aren't extremely "tech informed" decided to go blu ray probably because of the "bigger is better" philosophy along with many other factors...that and ps3 helped a ton.

    
    Either you didn't read what he said, or you're misunderstanding what I said. BR is the inferior format, and the public didn't vote with their dollars, Sony voted with their dollars and bought out fair competition.
12. 
    29 Jun 2008 ~ 2:45am tmh88 Blu ray was winning the whole time, even before the end was in sight.
    
    edit- what I mean by that "other side won" comment was that sony lost the last war(sony being the other side w/ beta), but won this time.
13. 
    30 Jun 2008 ~ 10:15am RADA

    Snarkasm wrote:

    They're not spending a ton of money on R&D. Miniaturization is a standard process, it just takes better manufacturing techniques. They're not redoing Cell and RSX chips, they're just building them better. And if you had read a little closer, the chips will end up costing LESS to make which means if they keep the price stable, they can raise the profit margin, and thus come out in the black.

    
    So you're saying there is no R&D $$ being spent to make the processor smaller, and faster, along with improving manufacturing techniques? I find that hard to believe. I worked at a Honeywell plant in Tucson as a Network Admin. I saw MILLIONS of dollars spent on the miniaturization of components for the aerospace industry. These components had to fit into aircraft already in service, just like a gaming console already on the market. Also Sony is losing well over $100 dollars per console. If they're only improving the processor, It would have to be a extremely good process change to recoup that kind of money.
    
    What I deduced from the article is that Sony is not selling enough PS3 consoles compared to the Wii and 360. Because their console numbers are lower, so are the sales of the games to go with said console. We all know the games are where the $$ really comes from. It really doesn't matter how much they improve their manufacturing process if the consoles sit on the shelf unsold. There also has to be a point where the loss taken on console sales + the lack of revenue generated from game sales reduces the profit potential to a point where it is no longer prudent to continue to produce the console.
    
    I agree 100%, the PS3's built in Blue-Ray player is a major cou de grase for Sony. It will definately help with console sale figures. As an Xbox 360 owner, this BR palyer is a major point as to why I might buy a PS3 (as soon as I get the OK from the boss, aka wife ). To have a BR player that can play games is a more cost effective option than a stand alone BR player for the same dollars (or more).
    
    We should aslo note that MS is developing a BR player AND a Wii type controller for the XBox 360, I'm not sure if Nintendo is also working on a BR player for their console though?? If both Nintendo and XBox develop like technologies, for a better price point, this could lead to the erosion of some of Sony's profit from the included BR player.
14. 
    30 Jun 2008 ~ 10:47am Snarkasm

    RADA wrote:

    We should aslo note that MS is developing a BR player AND a Wii type controller for the XBox 360, I'm not sure if Nintendo is also working on a BR player for their console though?? If both Nintendo and XBox develop like technologies, for a better price point, this could lead to the erosion of some of Sony's profit from the included BR player.

    
    Oh no, PLEASE don't reference totally bull**** rumorrific information about MS. There is ZERO evidence that they're doing either of those things, and while they might make sense, they've both been denied and debunked, and they have no place in any serious discussion about Sony's current market viability.
    
    You'll also note I didn't say they're not spending anything on R&D - I said they're not spending a ton. And they're not, especially compared to the R&D they had to do for the original console. Miniaturization in game console chips, while similar to your aerospace example, is, I'm sure, nowhere near as expensive or critical. Furthermore, you're still basing this off of old data. MGS4 octupled the weekly PS3 sales in Japan. It's not at all hard to see that better games coming out, between MGS, Little Big Planet, and GT5, and the fact that it is now the dominant HD player will drive sales upwards. The small amount of R&D and the fact that smaller, cheaper chips and less (and less expensive) hardware in the same-priced package means that profit margins go back up.
    
    Bottom line, with the crappy games they had out up until January, they STILL had a 5-game attach rate, and between being "the best value in town" as far as a BR-and-game player, the better games coming out, and the continued prospect of selling you movies, Sony's still looking just fine for the future.
15. 
    30 Jun 2008 ~ 11:09am RADA

    Snarkasm wrote:

    Oh no, PLEASE don't reference totally bull**** rumorrific information about MS.

    
    
    

    Tom's Hardware 3:40pm May 2, 2008 wrote:

    XBOX 360 Finally Getting Blu-ray
    After months of rumors and denials, the XBOX 360Xbox 360 with a Blu-ray disc drive is due to be manufactured soon and shipped in Q3 of 2008. Pegatron Technology, an OEM subsidiary of Asustek Computer, is reported to have received the winning order from Microsoft for a Blu-rayhttp://en.wikipedia.org/wiki/Blu-ray_Disc equipped XBOX 360.
    
    Earlier reports cited Lite-On as the company with the privilege of building the new console for Microsoft. Lite-On is also currently one of the suppliers of the internal DVD drive fro the XBOX 360.

    
    Full Article HERE
    
    
    Snarkasm,
    
    May I ask why you are so hostile in your responses?
    
    We are all posting opinions here, none more relevent than others, yet from your first response to this thread you've done nothing but attack....
    
    Did I personally offend you some how?
16. 
    30 Jun 2008 ~ 11:33am Snarkasm

    RADA wrote:

    Full Article HERE
    
    
    Snarkasm,
    
    May I ask why you are so hostile in your responses?
    
    We are all posting opinions here, none more relevent than others, yet from your first response to this thread you've done nothing but attack....
    
    Did I personally offend you some how?

    
    And on May 5th, not three days later, MS again debunked the BR drive rumor, as they've done again and again and again.
    
    I'm honestly not trying to be hostile, but these are not opinions, really. It's economics. You can't have an opinion that some company will be successful, you just have predictions, and mine are based on a LOT of reading. I do feel passionately on the HD-DVD vs Blu-Ray issue, and that may have come out a little strong, but I don't believe I was terribly hostile to you at any point, and I certainly didn't mean to seem so. It just seems like a lot of people don't actually know what they're talking about, so I'm trying to spread the information. If I'm doing it poorly, I apologize, and rest assured it's not intentional.
    
    When I talk about these things frequently, and especially when you hear the same "they're gonna have a BR drive!" rumors over and over again, it gets to grate on your nerves, and I apologize if that came through.
17. 
    30 Jun 2008 ~ 3:20pm Qeldroma Personally, the PS3 has worked out pretty good. It's a decent folder, the 65nm process version is a vast power improvement over the original, it's a versatile BR+upconverting payer and, of course, it can play games. While I would not pay $400 for a dedicated gaming console, I denfinitely feel like I got my money's worth when I factor in all the other features.
    
    While I likewise wanted the HD-DVD format to prevail- it didn't. And everyone is now adapting accordingly.
    
    While the 45nm process will help offset some costs, I suspect Sony will soon have to adjust to meet even more competitors as every manufacturer who is in the business converts.
    
    Winning the format war I also suspect will not translate into a Microsoft-style monopolistic hegemony for Sony- much like PCs didn't for IBM.
    
    You have to give Sony some Kudos for a cunning business strategy; however, such things only have a window of opportunity and this one may be closing soon. Sony's best option right now, I think, is to rope in as much market share as it can while it can.
    
    Good topic- one that is, if you will permit, understandably lively.