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View Full Version : Xbox 360 HD-DVD Drive if it becomes built in.. isn't there an inherent problem?


Archmagination
May 16, 2006, 09:04 PM
Wouldn't Microsoft lose even more money per a console if they put in a HD-DVD drive instead of a DVD drive. Now I am not an expert on this and I could be wrong, but here goes:

Lets say Microsoft plays this much for each item:

Xbox360 Standard DVD drive=$30

Xbox360 HD-DVD Drive=$130(Very low price.. I actually am expecting around $175-200 price point for it)

Now the difference is $100.. Microsoft wouldn't be able to increase the price of Xbox360 console(Unless they wanted to recieve a HUGE public backlash against them) So that would mean Microsoft at MINIMUM would be losing a extra $100 more per a console.. (a console by the way in which Microsoft is still losing money on) it would likely bankrupt Microsoft if they attempted that.

Its going to take years for the price of the HD-DVD drive becomes viable enough that Microsoft will be able to afford to fit them into the Xbox360..

Abulia
May 16, 2006, 09:08 PM
This has already been talked about at length in this thread (http://forums.macrumors.com/showthread.php?t=201217) -- you should check it out.

greatdevourer
May 17, 2006, 12:44 AM
I guess you're right, but that's not what they're doing, so we don't have to worry about that :)

mrgreen4242
May 17, 2006, 12:04 PM
Wouldn't Microsoft lose even more money per a console if they put in a HD-DVD drive instead of a DVD drive. Now I am not an expert on this and I could be wrong, but here goes:

Lets say Microsoft plays this much for each item:

Xbox360 Standard DVD drive=$30

Xbox360 HD-DVD Drive=$130(Very low price.. I actually am expecting around $175-200 price point for it)

Now the difference is $100.. Microsoft wouldn't be able to increase the price of Xbox360 console(Unless they wanted to recieve a HUGE public backlash against them) So that would mean Microsoft at MINIMUM would be losing a extra $100 more per a console.. (a console by the way in which Microsoft is still losing money on) it would likely bankrupt Microsoft if they attempted that.

Its going to take years for the price of the HD-DVD drive becomes viable enough that Microsoft will be able to afford to fit them into the Xbox360..
While this has been discussed to death in the thread mentioned above, I want to point out that the cost of the actual drives are much lower. If MS sells an external HD DVD attachment, not only would it have a drive in it, but also the USB circuitry, power supply, IDE connectors/adaptors, and the casing itself. Then there is the additional cost of separate packaging, etc.

The actual HDDVD IDE drive itself, while more expensive than a DVD drive, does not actually cost $130, or even $100. Just like MS isn't paying $30 (what you or I might pay) for a DVD drive, they are buying them by the millions, so paying much less.

That's also not to mention the fact that every month decreases the cost of making each XBox 360, so it is very possible that by the time they did put HDDVD drives into the system it may very well be a "break even" decision, that is the cost of the 360 w/ DVD in 2005 would be the same as a 360 w/HDDVD in 2006.

Also, even if MS did decide to take an additional $100 loss it would hardly bankrupt MS. Say they move 15 million units, at $100, is $1,500,000,000. A lot of money, but less than 5% of MS's cash holdings.

Consider that the wholesale price of the Toshiba HDDVD player is somewhere between $320 and $430 depending on who you listen to, so using an average to get a good guess $375 is what the drive costs. Inside is a P4 2.5ghz, a gig of PC2700 RAM, a fairly standard PC motherboard, a 256mg USB flash drive, and an HDDVD IDE drive. Start subtracting parts costs from that $375 and you're not left with a ton of money for the drive itself. I'm guessing a wholesale price somewhere between $40 and 60, compared to ~$15-18 for regular DVD.

In short, the reason that player is so expensive is NOT the HDDVD drive, but the extremely high amount of power required to decode the high resolution, high bitrate video on the discs. You (and MS) have already paid for that in the 360.

I'd guess the increase in the cost of parts for adding an HDDVD drive to the 360 (I'm not going to argue or even discuss the difference in the cost to manufacture - see the other thread for my opinions on that - just the sum of the cost of parts being considered here, no assembly or labor) would be $45 TOPS, more like sub $40, close to $35.

XNine
May 17, 2006, 12:07 PM
While this has been discussed to death in the thread mentioned above, I want to point out that the cost of the actual drives are much lower. If MS sells an external HD DVD attachment, not only would it have a drive in it, but also the USB circuitry, power supply, IDE connectors/adaptors, and the casing itself. Then there is the additional cost of separate packaging, etc.

The actual HDDVD IDE drive itself, while more expensive than a DVD drive, does not actually cost $130, or even $100. Just like MS isn't paying $30 (what you or I might pay) for a DVD drive, they are buying them by the millions, so paying much less.

That's also not to mention the fact that every month decreases the cost of making each XBox 360, so it is very possible that by the time they did put HDDVD drives into the system it may very well be a "break even" decision, that is the cost of the 360 w/ DVD in 2005 would be the same as a 360 w/HDDVD in 2006.

Also, even if MS did decide to take an additional $100 loss it would hardly bankrupt MS. Say they move 15 million units, at $100, is $1,500,000,000. A lot of money, but less than 5% of MS's cash holdings.

Consider that the wholesale price of the Toshiba HDDVD player is somewhere between $320 and $430 depending on who you listen to, so using an average to get a good guess $375 is what the drive costs. Inside is a P4 2.5ghz, a gig of PC2700 RAM, a fairly standard PC motherboard, a 256mg USB flash drive, and an HDDVD IDE drive. Start subtracting parts costs from that $375 and you're not left with a ton of money for the drive itself. I'm guessing a wholesale price somewhere between $40 and 60, compared to ~$15-18 for regular DVD.

In short, the reason that player is so expensive is NOT the HDDVD drive, but the extremely high amount of power required to decode the high resolution, high bitrate video on the discs. You (and MS) have already paid for that in the 360.

I'd guess the increase in the cost of parts for adding an HDDVD drive to the 360 (I'm not going to argue or even discuss the difference in the cost to manufacture - see the other thread for my opinions on that - just the sum of the cost of parts being considered here, no assembly or labor) would be $45 TOPS, more like sub $40, close to $35.

Pay less than 100 bucks at COST for an HD DVD drive? I think not:

http://digg.com/technology/HD_DVD_and_Blu-ray_drives_cost_over_$400_to_build_

Haoshiro
May 17, 2006, 12:17 PM
Right, I don't think anyone here is in the position to make claims on what HD-DVD drives do or do not cost to manufacture.

mrgreen4242
May 17, 2006, 12:38 PM
Right, I don't think anyone here is in the position to make claims on what HD-DVD drives do or do not cost to manufacture.

We can deductively say they are definately less than $100. If it costs Toshiba $400 (a figure close to the estimate I offered up, and given by Onizuka) to make a player which retails for $500, including licensing fees which I recall seeing that they were $30 for BR and bit less for HDDVD, that has a P4 2.5ghz CPU mounted to a fairly standard motherboard, with a gig of fairly fast RAM, a 256mb flash drive, digital and anolog video outputs, stereo sound decoding and output, digital and optical Dolby sound passthroughs, a powersupply of some sort, along with the IDE drive, all inside a chassis and casing, with a remote (oh, can't forget the remote sensors and IO), manuals, and packaging, there's no way that the actual IDE drive itself is costing more than $100.

Just step back and think about it for a minute. $400 is not a lot of money to work with. P4 2.5ghz chips are not cheap. Neither are modern Intel chipset MoBos. Or gigs of PC2700 RAM. You could pretty easily look up the wholesale costs of these parts, if you wanted. And the wholesale cost of 256mb of flash RAM. Throw in some educated guessed for the casing/chassis, powersupply, and some less educated guesses for the digital and analog video output equipment. Toss a few bucks in for assembly/labor and packaging/manuals. And some number less than $30 for licensing. Subtract all that from $400, and what you're left with is roughly the price of an HDDVD IDE drive unit.

Mernak
May 17, 2006, 12:44 PM
just in general a company must charge much more than a product actually cost so that they can cover employee costs, shipping costs, and still make a profit. my mom used to order stuff for a gift shop and the lowest increase of price was between 2x and 3x their cost even though they might be desperate and sell for 1.5x

Haoshiro
May 17, 2006, 01:03 PM
Just step back and think about it for a minute. $400 is not a lot of money to work with. P4 2.5ghz chips are not cheap. Neither are modern Intel chipset MoBos. Or gigs of PC2700 RAM. You could pretty easily look up the wholesale costs of these parts, if you wanted. And the wholesale cost of 256mb of flash RAM. Throw in some educated guessed for the casing/chassis, powersupply, and some less educated guesses for the digital and analog video output equipment. Toss a few bucks in for assembly/labor and packaging/manuals. And some number less than $30 for licensing. Subtract all that from $400, and what you're left with is roughly the price of an HDDVD IDE drive unit.

When you factor in manufacturer bulk contracts that could easily go below "wholesale" pricing, it does not at all seem unreasonable that all of the could total around $200. That would leave $200 just for the drive. Standard "wholesale" pricing is not without markup, and it's a bit different of an arena then actual manufacturer deals.

I buy wholesale items for my business all the time, that means I'm getting stuff from a supplier that is working directly with the manufacturer. Sure I get it cheaper then consumers in retail, but my supplier is making a profit as well. Now if I could buy in bulk directly from manufacture, cutting out the wholesale supplier I'd be getting things even cheaper.

greatdevourer
May 17, 2006, 01:27 PM
When you factor in manufacturer bulk contracts that could easily go below "wholesale" pricing, it does not at all seem unreasonable that all of the could total around $200. That would leave $200 just for the drive. Standard "wholesale" pricing is not without markup, and it's a bit different of an arena then actual manufacturer deals. You've both left out software - quite possibly the most expensive part of the whole thing

mrgreen4242
May 17, 2006, 01:33 PM
When you factor in manufacturer bulk contracts that could easily go below "wholesale" pricing, it does not at all seem unreasonable that all of the could total around $200. That would leave $200 just for the drive. Standard "wholesale" pricing is not without markup, and it's a bit different of an arena then actual manufacturer deals.

I buy wholesale items for my business all the time, that means I'm getting stuff from a supplier that is working directly with the manufacturer. Sure I get it cheaper then consumers in retail, but my supplier is making a profit as well. Now if I could buy in bulk directly from manufacture, cutting out the wholesale supplier I'd be getting things even cheaper.

Sigh. This isn't going anywhere, and we both know it judging from our previous thread. Maybe you're right. Maybe they got the CPU, RAM, motherboard with digital and analog video circuitry and sound, casing, PSU, remote with sensors, and all the labor, packaging, and also licensing for $200, leaving the drive itself to be $200.

Let's just agree that you think the IDE HDDVD drive is a costly piece of hardware, in the almost $200 range, and I think that it's not. And then we can not talk about it anymore, until official wholesale or at least retail pricing for drives become available, which will likey be before the Xbox even gets an HDDVD drive add-on.

GFLPraxis
May 17, 2006, 01:39 PM
Pay less than 100 bucks at COST for an HD DVD drive? I think not:

http://digg.com/technology/HD_DVD_and_Blu-ray_drives_cost_over_$400_to_build_

The DRIVE, not the player. The players need tons of expensive hardware similar to a mid-level PC in order to actually decode and play HD video, plus a bunch of other hardware and outputs. The XBox 360 and PS3 already have all this hardware for playing games, so all they need is the disk drive, much cheaper.

Haoshiro
May 17, 2006, 02:27 PM
Sigh. This isn't going anywhere, and we both know it judging from our previous thread. Maybe you're right. Maybe they got the CPU, RAM, motherboard with digital and analog video circuitry and sound, casing, PSU, remote with sensors, and all the labor, packaging, and also licensing for $200, leaving the drive itself to be $200.

Let's just agree that you think the IDE HDDVD drive is a costly piece of hardware, in the almost $200 range, and I think that it's not. And then we can not talk about it anymore, until official wholesale or at least retail pricing for drives become available, which will likey be before the Xbox even gets an HDDVD drive add-on.

Agreeing to disagree works for me. Keep in mind that I wasn't really on one "side" or the other, just pointing out that we don't know, nor do we have enough information to properly deduce. It certaintly could be <$100, it could also be >$100 ... the information we have now is so theoretical we'd be relying on luck to even guess an amount close to actuality.

I try to see every angle on a subject, every possibility. I tend to defend possibilities more often then just my own "opinion". Perhaps it's the programmer in me, being that is what I do every day...

bokdol
May 17, 2006, 04:54 PM
http://www.isuppli.com/news/xbox/

take a look at cost.. i dont know wherre they got then info but here it seems to be

Haoshiro
May 17, 2006, 05:43 PM
Yeah, I had seen that sometime ago and forgot.

Here's another good link: History of Console Prices (http://curmudgeongamer.com/2006/05/history-of-console-prices-or-500-aint.html)