Sony: Financial Backbone Will Be 'Much Healthier, Much Earlier' with PS4

Push Square: "Let’s not beat around the bush, the PlayStation 4’s price point was a bit of shock. While we’d heard inklings that the company was going to price its next generation system much lower than previous efforts, very few imagined that it would hit $399.99. And that’s prompted some pundits to question whether the company is taking a large financial hit in order to achieve such an impressive price point. According to PlayStation president Andrew House, though, the 'financial backbone' surrounding the console couldn’t be healthier."

[Gandalf]

Must've cut a good deal with AMD and with whoever's making that RAM.

[Arai]

Hynix is supplying the RAM modules IIRC, they were the only ones at the time that could deliver that capacity.

[Kleptic]

Their savings are mostly coming on the optical side i'd imagine...keep in mind, this is the first console Sony has ever made to not push a new phsyical media format. PS1 pushed CD-Rom, which was already around, but far from standard in the programming sense...PS2, DVD obviously, and PS3 started what the PS4 will continue using...that is a massive cut in R&D as well as manufacturing...

Their partnerships with BD and held patents keep those costs in check, and the format is already considerably affordable from a manufacturing stand point...especially compared to 2006.

while its true the basically off the shelf AMD parts will help the production costs...i'm pretty sure most of the saved money comes from using an acceptable optical format that is already tooled and in place from the last generation...and one that they pay no royalties for...

the strange thing is...this media format does not afford MS the same thing, though...They're paying costs just for being able to use the parts for BD, let alone the physical hardware needed...

So not only is MS fumbling left and right with this DRM/always-on BS...they're still feeling the fall out of backing HD-DVD years ago...with kinect 2.0, and all of the above...i'm fairly sure MS is taking more of a hit with the xbox one than Sony is, despite the $100 retail difference...

[hellvaguy]

"backing HD-DVD years ago"

Was decent until you tripped up on this part. Xbox never back hd-dvd. I've never once seen a game released from ms on a hd-dvd. The hd-dvd was an optional accessory.

At the time it was wise for MS to remain neutral on the Blu-ray/hd-dvd format war. When MS released the 360 one year ahead of the ps3, Blu-ray players alone were selling for around $1,000.

[nikoado]

@kleptic

Yep, blu drives are much cheaper now than at ps3 launch.

The off the shelf/semi custom APU is probably much cheaper than RSX and CELL for R&D and manufacture.

A HUGE cost saving is that they have to buy massive factories to manufacture their CPU like they did for CELL.

Overall, good design decisions and a well engineered console enabled them to reach their targeted launch price.

[dcbronco]

I know the article mentions the design but that has little to do with the lower cost. The most expensive parts of a console are the CPU and the GPU. In these console those two chips are one chip. In addition, the size of the chip matters. Last generation had two chips and both were 90nm. Now it one chip and 28nm. When that fabricate chips they use a wafer. The wafer are the same size, but if you have a smaller chip you can make more chips from that wafer. But the cost to make "print" the wafer is the same.

So this gen you start with a wafer that cost you ten dollars to "print" at 90nm. That gives you ten chips. And you pay that twice because you need a CPU and a GPU. With a APU the wafer cost ten dollars to "print" but the chip is much smaller, 28nm, so you get 50 chips. And since the APU has the GPU already on it you don't pay another ten dollars.

The 360 moved to a SoC(sort of APU) back in 2009 with the Slim. That is why stories of Xbox never making money are a joke. MS has been making money on every console for years, even before 2009. But if most knew that they would have demanded a price cut four years ago.

Start of last gen $10 makes five consoles. This generation $10 makes 50 consoles. That is the main reason these consoles are most likely being sold at a profit day one. The size of the chip makes other things on the console cheaper too. Smaller means cooler, which means less power, smaller power supply, smaller case, smaller motherboard, smaller fan. Doesn't seem like a lot until you multiply it by 10 million consoles.

And Blu-ray is much cheaper too.

GDDR5 is not though.

[BitbyDeath]

@hellvaguy, MS didn't remain neutral. If they had then you would've also seen a Blu-ray addon.

They backed HD-DVD.

[dedicatedtogamers]

I believe most estimate that it costs Sony roughly $320 per PS4.

[CGI-Quality]

VERY good news, if true!

[TronEOL]

And I'd say that's a fairly nice chunk made by Sony on each console.

If they make a full $80 on each console sold, they can earn ~$400,000,000 off 5 Million PS4's. And I'd say they'll definitely hit that worldwide without any issue before year end.

Then you count money made (after making back costs) on 3 first party launch titles (among other games), and PS+ Subscription profits.

I think the PS4 may very well make Sony a hefty chunk of change.

Also, don't forget about the Vita and PS3 that will surely still be selling (and the many Vita's to get sold when PS4 has been out for a while for remote play).

[dcbronco]

They don't make the whole $80. Other things come into play. Those estimates are usually what's called a BOM(Bill of Materials). They don't include packaging, assembly construction of the console. Some do, some don't. Add advertising and shipping. If there are shortages sometimes you have to rush the shipments and that can be expensive. MS had to have 360's flown into the US at launch and that cost them a ton of money. Consoles are usually brought over on boats in huge numbers.

But overall Sony should make very good money in the first year and more as the generation goes on.

[hellvaguy]

Well ya paid online and a cpu that is much more economical. Im no genius, but that's pretty obvious ps4 will be more profitable. Also factor in the disposable controllers that you cant change out the batteries. Mo money, mo money, mo money!

That's not even factoring in if they end up outselling the competition in sales as many are predicting now.

[Qrphe]

>disposable controllers

wut

[hellvaguy]

Thought I already pointed that part out. Batteries go bad all the time and degrade the amount of charge they hold. With sony you just toss out the controller (like apple products after a few years) instead of having the freedom to swap out rechargeable batteries.

[Angeljuice]

If the battery fails you can use a screwdriver and replace it. They tend to outlast the controller anyway!

[Boody-Bandit]

hellvaguy

I have yet to have any PS3 controller not hold a charge. Even my launch sixaxis controllers still work flawlessly. Also, I have never had any PS3 controller stop working. The durability of the PS3 controller was built to outlast the console longevity IMO. I own 4 PS3 controllers and never had a need or a reason to purchase more.

[JoeReno]

©brutally true facts my sixaxis controllers out lasted my 60gb and are still in use. Never had to replace a battery.

[GenericNameHere]

My phat PS3 YLOD'd, but my Sixaxis is still working like a champ after 6 years. Even the Sixaxis that came in with my uncle's launch day Phat PS3 is working perfectly. But hey, that's just my own experience. I'm not gonna pull out the "well, it happened to me/a friend, therefore it must have occurred/reflects to everyone" line.

[Angeljuice]

I'm really heavy-handed with controllers, not just Sony's but all makes. Sony's tend to be very durable, one lasted me 4 years, third party pads3-6 months.

[badz149]

disposable controller? dude, what are you talking about? sure the batteries are built in but you can change them easily and it cost just a fraction of the cost of a new controller.

I know this because I changed my 2 DS3's batteries and even changed the worn out analogue sticks.

[Qrphe]

Like Applejuice already mentioned, it doesn't take much literacy (or time) to open up and change batteries in a controller.

[s8anicslayer]

applejuice...lmao

[Qrphe]

lol I seemed to have misspelled your name

Sorry Angeljuice

D':

[xhi4]

Bro, I have 4 controllers and I've never had to replace ANY of them...

Lol...

So much more annoying having to buy and buy tons of AA batteries just to play.

[NateCole]

Well no Cell and Much cheaper Blu-day, HDMI and HD will do that for you.

[hellvaguy]

I was with you on the first 2, but then I got lost on how hdmi and hd will make more profit.

[NateCole]

HDMI and HD component were more expensive then.

Basically Sony gained a lot of manufacturing experience with the PS3 that has allowed them to get the price down for PS4.

Nothing in the PS4 Sony had to break any bank in R&D and manufacturing like it was the case with the PS3 when they were dev and launching it.

Sony learn a lot from their difficult experience with the PS3 which obviously have helped them immensely for the PS4.

[xhi4]

Yeah, the PS3 when it first launched the largest HD size you could get was 60GB because it was so expensive and that was nearly $1000 in Australia ($599 in US)

Now 500GB hard drive is WAY cheaper to produce.

[hellvaguy]

oh HD he to say meant hard drive. That was a very weird choice of words. They way he put it I thought he was referring to high def.

[green-cigarettes]

I'm glad. They definitely deserve it.