PS3 Launch May Be Delayed, Cost May Skyrocket

Discussion in 'Games' started by clayj, Feb 20, 2006.

  1. clayj macrumors 604

    clayj

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    #1
    From MSNBC:

    Sony’s shares fell as much as 4.4 percent on Monday after Merrill Lynch said in a research note last week that the PS3’s launch might be delayed by six to 12 months and the cost of production could initially approach $900 per unit.

    “No one is seriously thinking a spring release is realistic any more,” said Hiroshi Kamide, an analyst at KBC Securities. “If I were Sony, I wouldn’t be that worried about releasing as soon as I possibly could.”

    Clayj notes: $900 per unit to produce? Not good news for Sony if it's true... either they'll take a HUGE hit on each console they sell, or the PS3 will be priced so high that it'll scare off a BUNCH of potential buyers. Either way, this is good news for Microsoft.
     
  2. yellow Moderator emeritus

    yellow

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    #2
    I believe that most of these things are sold at a loss initially until the demand becomes high enough so component prices come down and the profits rise. I'm guessing that no small part of this price tag is the Blu-ray drive. It's too bad that it may be delayed. I'll still wait and buy a PS3 over an xPox360.
     
  3. XNine macrumors 68040

    XNine

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    #3
    Meh. I'm sure the PS 3 will be fine. Hell, most of the Xbox 360 games won't be out for almost 11 months. We'll ahve what? maybe 12 more titles by then?

    Also, let's not forget the price of the technology going into the units will drastically reduce over the next 6 months, let alone year.
     
  4. GoCubsGo macrumors Nehalem

    GoCubsGo

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    #4
    I completely agree. This spring a friend was due to go to Japan and buy one for me. Of course I'd have to unlock it somehow, but they are backwards compatable and such. Anyway to the point, $900 per unit is sad. If this thing retails over $400 I'll wait a year or two before I buy. I paid $300 pre order for my PS2 and I even thought that was too much. Considering how well I take care of it and the fact that it's perfect right now makes that $300 worth it though. I wish the MSRP would be $350 or less...and not for the "core" model either.
     
  5. Lord Blackadder macrumors G5

    Lord Blackadder

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    #5
    I don't believe it. Investment research groups are often wrong about products like this...at any rate the "delay" might be the result of the Xbox 360 launch - Sony saw what the final product looked like from MS and decided to either add or remove features as necessary.
     
  6. GFLPraxis macrumors 604

    GFLPraxis

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    #6
    I don't believe it. There was a comment on Slashdot that is relevent...
    I found it an interesting possibility. Maybe Sony is just exaggurating the price to make it sound more valuable?

    I find it strange that the SAME analyists said a few months back that the PS3 would cost $500 to manufacture.
     
  7. Sdashiki macrumors 68040

    Sdashiki

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    #7
    A machine that costs as much as a crappy PC and yet can only do 1 thing, play games.

    now thats sad.

    people need to realize you are paying pretty much for a Brand Name and for the rights to play proprietary games not available for the PC.

    the high costs of the video game market, and that people pay them without question, astounds me,
     
  8. clayj thread starter macrumors 604

    clayj

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    #8
    True, except for Nintendo, which has apparently NEVER sold a console for a loss, even at launch.

    Here's the problem for Sony, though: For the Xbox 360, the difference between console cost and console retail is currently about 4 games' worth of profit. In other words, Microsoft has to sell 4 games to make enough profit to cover the loss on the console itself. Right now, they are selling OVER 4 games per console... so Microsoft is NOT losing any money on the 360 overall. This 4+ game sell is practically unheard of.

    For Sony, if the console costs $900 to produce and they sell it for $400, you're talking a $500 loss per console and Sony has to sell TEN GAMES to make up the loss. That's practically impossible. And depending on how expensive the PS3 is compared to standalone Blu-Ray players, you may see a lot of people buying PS3s with NO games just so they can use them for Blu-Ray playback.

    Sony really is in trouble here. They could have launched the PS3 by now if they didn't insist on putting a next-gen disc-format in the console... like Microsoft did with HD DVD, they could have added Blu-Ray support as an external option.
     
  9. greatdevourer macrumors 68000

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    #9
    1) It's a good strategy that means that Ninty don't have the same thing Sony are doing with PSP updates - they don't care if someone buys their console just for homebrews (eg, myself - Moonshell and Minesweeper are my 2 main things :D)
    2) Wrong - Sony have to sell far more than a mere 10 games. They have to sell 10 games if the games don't cost anything to make. However, there's manufacturing cost, developer cost and (if it's a 3rd party, which most/all of their big franchises are) publisher costs. So they actually have to sell a lot lot more
     
  10. Lord Blackadder macrumors G5

    Lord Blackadder

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    #10
    This is true, but also deceiving since the 360's competitors have yet to be released. MS may be putting up good numbers now but we know that will change when the Revolution and PS3 are released, which (I think) will be on time and at a competitive price.

    I just don't believe the $900 price point - it's ludicrous.
     
  11. clayj thread starter macrumors 604

    clayj

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    #11
    Yeah, I thought of that after I submitted the post... you're right, it's MORE than ten... but even ten is nigh impossible.
     
  12. grapes911 Moderator emeritus

    grapes911

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    #12
    I read an article (I wish I could find it) about a month before the Xbox launch that the Xbox was going to be delayed. It wasn't. The people that do these studies have no real inside data. They are just basing it on projections and such. The only way to know is to wait and see.
     
  13. clayj thread starter macrumors 604

    clayj

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    #13
    They didn't say the price point was $900; they said the COST to manufacture the console would be $900, no doubt because of the inclusion of Blu-Ray.

    Any price point higher than $500 for the console alone would be disastrous for Sony... they'd lose less per console, but they'd get hammered on the sales.
     
  14. greatdevourer macrumors 68000

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    #14
    The thing is that after the boasting of E3, they haven't said a single word about it since. They've brought out the concept design a few times and put it on show, but nothing more. I would be far from suprised if this was true
     
  15. XnavxeMiyyep macrumors 65816

    XnavxeMiyyep

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    #15
    The PDF that was linked to on Slashdot ( http://rsch1.ml.com/9093/24013/ds/276873_0.PDF ) that indicated the $900 cost had some errors in it. The prices listed (page 3) of the components added up to a total of exactly $800, but the sum was written as $900, which suggests that a lot of this is just made up. Also, it seems unlikely that Sony would have to pay $350 for a blu-ray drive, considering that it's technology that Sony produces.
     
  16. Lord Blackadder macrumors G5

    Lord Blackadder

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    #16
    I understand that, but I don't believe it either. :)

    I just think it's FUD that Sony's console will approach that cost to build. But I agree with you that anything over $500 retail is going to be dangerously expensive (I would never pay more than $300 for a console personally).
     
  17. AoWolf macrumors 6502a

    AoWolf

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    #17
    The sony name is so huge that it will sell them no matter how much they cost or how late they come to market. It will be very interesting to see how all of this plays out. If this thing is that much better then a 360 I don't see micro soft doing that well. Nintendo is also gonna take some sales with there cheap revolution but I don't see them as much of a threat to sony or Microsoft.
     
  18. russed macrumors 68000

    russed

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    #18
    i dont want the ps3 to be delayed too long! my ps2 is feeling a touch old in comparison to the xbox 360 and if it does take 12 months i may even have to go for one of them instead :eek:
     
  19. ~Shard~ macrumors P6

    ~Shard~

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    #19
    Wow, very interesting development. I would take it with a grain of salt, myself, and I doubt the end situation will be as bad as this article is making things out to be. They had a PS3 running a Blu Ray demo at CES in Vegas last month, and I just don't see how this drastic type of a change wouldn't have been forseen a while ago.

    I'll definitely keep up to date on this story though, and it will be interesting to see how things ultimately play out. :cool:
     
  20. GFLPraxis macrumors 604

    GFLPraxis

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    #20

    Yeah, when it comes to third party games, the third party makes most of the money. After the third party takes their cut (they made the game right?), then the cost of manufacturing (case, booklet, disk, labels) and putting it in every store and all other costs Sony only makes $5-$10 off other people's games.

    They'd have to sell more than ten BRAND NEW $60 first party games per system.

    They could also charge subscription fees for online, but that didn't help Microsoft much.

    They may also hope to make up money on downloadable content like an iTunes competitor and stuff, but not $400 per system.
     
  21. jdechko macrumors 68040

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    #21
    Except for Sony stands to make HUGE gains if Blu-Ray wins as the HD format. Granted, that may not be great for the Playstation division, who is losing money. But think about it. Unlike Microsoft, Sony has a much bigger interest in the outcome of the format wars, which is probably why they've chosen to include it in the PS3, even if it means ceding some market share to MS with the 360. If Blu-ray wins, everyone (not just gamers) is going is going to be shelling out cash (indirectly) to Sony for technology licensing fees, etc.

    It doesn't make sense as a game industry strategy, but I think taking a look at all of Sony's different markets, its a really good bet (A great payoff if Blu-ray sticks works, and a huge flop if it fails).

    It seems to me like a giant risk/reward scenario. The potential payoff must be huge. Also, I think that there are enough loyal Sony/PS fans that the PS3 will sell well.
     
  22. MRU macrumors demi-god

    MRU

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    #22
    I think the big thing to remember is that the $900 is only an estimate and it's based on prices of comparable hardware available NOW.

    It will be at least 6 months before Sony release the console, there isn't even that much press about playable game code at this stage, with development tools themselves still in infant stages it's hard to imagine the hardware is going to be going to manufacture until winter (christmas) release...

    By which time the cost of production will more than likely have fallen by a couple of hundred bucks.... 10 months is a long time production wise...

    The only way Europe will see the PS3 this year is by a shear miracle. Expect a three month global launch window rather than 3 week for Xbox 360..
     
  23. Lord Blackadder macrumors G5

    Lord Blackadder

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    #23
    Let's hope that Nintendo and Sony learn from Microsofts farcical xbox 360 launches.
     
  24. DrNeroCF macrumors 6502

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    #24
    That's only partially true. Sure, Sony doesn't have to pay extra to license the technology, but they also have already sunk a ton of money to even create the technology, same with the cell processor. They're not going to be making money on the ps3 for years, and they can't spread the price out on blu-ray players, for one they're not going to sell worth a crap because the mainstream could care less, and they'll start out at 1200 bucks. That's insane.

    Oh, and about it being a cheap computer that only plays games, it will play games far better than any sub-grand computer out there because it only plays games. The only problem is, raw graphics are kinda plateauing right now...

    I feel really sorry for Sony's shareholders, they're getting screwed over royally by this company's hubris.

    Nintendo on the other hand... :cool:
     
  25. greatdevourer macrumors 68000

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    #25
    According to wassis name who does MGS, they're practically identical, and he could release MGS4 for 360 at the same level as the PS3 with minimal trouble
     

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