E3 2k5 -- PS3 / X360 choose?
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course not, there's a basis for every speculation made. 
If they really want to compete, they would be selling the console at a loss. If that happens they would be heavily relying on their software sales, which I doubt that they would benefit much.Kane said:
I highly doubt that the price difference between the different consoles will be very big. A small gap is what is to be expected.
Besides, we don't really know the contribution margin or the marginal cost (and whenever we have big production lines, marginal cost becomes an important measurement) of each console sold.
We only know that the original X-Box was sold with a loss because M$ said so (and their balance sheets prove it). But by merely inspecting balance sheets you can't really calculate the two values that I mentioned (assuming you can properly read a balance sheet and a cash flow statement in the first place).
Without knowing the CM and MC of a product, you're unable to reliably predict the pricing schemes adopted by the companies. Perhaps Sony will lower the CM of the PS3 in order to increase competitiveness (decreasing gross profits in the short term, but increasing total revenue in the long term due to operating leverage, specially if the MC is low).
I won't speculate on prices until the companies actually announce it. And you must also take into account that prices fluctuate wildly in the short-term (long-term price changes are usually constant), due to situation of the market and the actions of the competitors.
Pulling the $360 figure for the X360 out of a speculation about the price of the PS3 was a specially bad move.
EDIT: I was checking out the financial statements of M$. The financial statements for the 2004 fiscal year can be found here . According to the financial reviews they are still under a heavy operating loss in their Home and Entertainment segment. I don't have the time to check out the income statements right now, but this is convincing evidence that they're losing money for each X-Box sold.
Besides, we don't really know the contribution margin or the marginal cost (and whenever we have big production lines, marginal cost becomes an important measurement) of each console sold.
We only know that the original X-Box was sold with a loss because M$ said so (and their balance sheets prove it). But by merely inspecting balance sheets you can't really calculate the two values that I mentioned (assuming you can properly read a balance sheet and a cash flow statement in the first place).
Without knowing the CM and MC of a product, you're unable to reliably predict the pricing schemes adopted by the companies. Perhaps Sony will lower the CM of the PS3 in order to increase competitiveness (decreasing gross profits in the short term, but increasing total revenue in the long term due to operating leverage, specially if the MC is low).
I won't speculate on prices until the companies actually announce it. And you must also take into account that prices fluctuate wildly in the short-term (long-term price changes are usually constant), due to situation of the market and the actions of the competitors.
Pulling the $360 figure for the X360 out of a speculation about the price of the PS3 was a specially bad move.
EDIT: I was checking out the financial statements of M$. The financial statements for the 2004 fiscal year can be found here . According to the financial reviews they are still under a heavy operating loss in their Home and Entertainment segment. I don't have the time to check out the income statements right now, but this is convincing evidence that they're losing money for each X-Box sold.
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It's kind of funny Home and Entertainment is what 12% of Microsoft? :S
BTW why can't I vote for the phantom gaming system??? I bet it'll own Nintendo, sony and MS
BTW why can't I vote for the phantom gaming system??? I bet it'll own Nintendo, sony and MS
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I think it was on Xbox-scene, but there is an article that the Xbox 360 will not be as cheap as people think it will. The report basically said M$, due to costs, will pretty much have to release it at Above the $400 mark. They said people expecting it to be anything less will be (in my own words) peeing into the wind and pretending it is rain. Ain't gonna happen.
Incidentally whomever it was that said the PS3 cost twice as much to produce. Where's the mubers for that?? The Cell is in house making it more than likely extremely cheap as compared to purchasing PowerPC CPU's.. and after nVidia got burned by M$ I am pretty sure they offered Sony a VERY good deal.... Actually other than the nVidia chip, all else is made in house..Sony has a stake in Blue-ray, so it makes it's own drives....looks to me like the 360 would be the one costing twice as much to produce..
Incidentally whomever it was that said the PS3 cost twice as much to produce. Where's the mubers for that?? The Cell is in house making it more than likely extremely cheap as compared to purchasing PowerPC CPU's.. and after nVidia got burned by M$ I am pretty sure they offered Sony a VERY good deal.... Actually other than the nVidia chip, all else is made in house..Sony has a stake in Blue-ray, so it makes it's own drives....looks to me like the 360 would be the one costing twice as much to produce..
No, Sony and Toshiba are manufacturing the RSX graphics chips. Unlike the first Xbox chip which was provided and designed by NVIDIA.
An NVIDIA engineer team was assembled to assist Sony in the designed of the system-bus and graphics core for PS3.
All physical parts of the system are being produced by Sony, Toshiba and IBM
An NVIDIA engineer team was assembled to assist Sony in the designed of the system-bus and graphics core for PS3.
All physical parts of the system are being produced by Sony, Toshiba and IBM
dpence said:
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I doubt that NVIDIA was just "helping" the very good friends they have at sony out, without getting some sort of sweet deal out of it
On a side note, I like the cautious tone of M$ financial statements that I linked before: "To the extent open source software gains increasing market acceptance, sales of our products may decline, we may have to reduce the prices we charge for our products, and revenue and operating margins may consequently decline.
Anyway, what dpence and Katsuya said just shows how hard it is to forecast pricing schemes when one is ignorant of vital measures such as Marginal Cost and the Contribution Margin (and even with these values, forecasting is still subject to significant uncertainties, due to unknown factors in the business plan or strategic planning).
Anyway, what dpence and Katsuya said just shows how hard it is to forecast pricing schemes when one is ignorant of vital measures such as Marginal Cost and the Contribution Margin (and even with these values, forecasting is still subject to significant uncertainties, due to unknown factors in the business plan or strategic planning).
NVIDIA is being compensated for their technological expertise. NVIDIA wouldn’t work with Microsoft Corporation after what happened with the major pricing disputes. Sony was smart not fall into the same hole by just licensing technology and not increase manufacturing cost.ChankastRules said:I doubt that NVIDIA was just "helping" the very good friends they have at sony out, without getting some sort of sweet deal out of it
Agreed, it’s very difficult to predict the outcome without knowing more of the detailsBoltzmann said:
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ok, u know i was all just blabbin away there.. its all in good fun
I hardly use my consoles for gaming, only sometimes.. if i want real gaming i go straight for the PC.
anyway, for real i just think PS3 and XBOX 360 will be as good as eachother, both have weak points and both have strong points.. same as anything else.
Actually my first console in the 32 Bit world was PSX.. i held nothing against it, it was a good machine with plenty of good games.. obviously its outdated now though :nod:
Oh and to Kane.. Yes i have comparison, Gears of war.. Apparantly it is only running at 80% graphical wise.. in other words they can make it better.. it already looks awesome, check it out.
its all in good funI hardly use my consoles for gaming, only sometimes.. if i want real gaming i go straight for the PC.
anyway, for real i just think PS3 and XBOX 360 will be as good as eachother, both have weak points and both have strong points.. same as anything else.
Actually my first console in the 32 Bit world was PSX.. i held nothing against it, it was a good machine with plenty of good games.. obviously its outdated now though :nod:
Oh and to Kane.. Yes i have comparison, Gears of war.. Apparantly it is only running at 80% graphical wise.. in other words they can make it better.. it already looks awesome, check it out.
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