PS3 cost and release date estimate

[The Mullinator]

This is from Merril Lynch the investment firm. They have decided that the PS3 will cost $900 to make initially, they don't give an estimate for how much Sony will sell it for however so Sony could make it the same price as the Xbox and take a massive loss on each system sold.

They also believe that the release date may slip into 2007 so that the costs of components like the Blu-ray drive won't be so expensive to produce and bring the manufacturing costs down.

Keep in mind nothing is official here but I would trust Merril Lynch for the estimates on hardware cost above anything other than Sony itself.

http://rsch1.ml.com/9093/24013/ds/276873_0.PDF
My source: http://www.joystiq.com/2006/02/18/playstation-3-estimated-to-cost-900-per-unit/#comments

 

[Axyon]

Hmm, I know it's an estimate, but letting the release slip into 2007 would really let Microsoft get a strangehold on the market.

 

[Shamrock]

Letting the release slip from Spring 06 to Spring 07 will kill Sony.

 

[AiM]

Sony sold the PS2 at a loss for the first ~3 years, with them trying to push the Blu-Ray there's an even greater incentive to push the PS3 ... even if it means significant loss. Personally I wouldn't put too much emphasis on these estimates, the only quote matters is the one from Sony itself.

While looking through, I did find something interesting...

Merrill Lynch does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Customers of Merrill Lynch in the US can receive independent, third-party research on companies covered in this report, at no cost
to them, if such research is available.

Of course I'm not saying they're biased... but they're saying they may not be completely objective :O Personally I don't think it'll "kill" Sony IF they did push it into late Spring 2007, sure they might lose a few impatient customers but odds are the people won't go rush out in droves to buy the Xbox 360 either.

 

[VictimOfScience]

I am glad we have all of the industry analysts from Halflife2.net putting forth their predictions as to what system will fail and why. Maybe industry insiders will finally start taking us seriously!

TBH, what do these guys know? Its all about making a prediction that is heard by the most people and reprinted by the most media outlets. That is to say, it has to be a relatively outrageous claim. These analysts have been predicting this and that for ages now and while it all seems based on reason and logic, its still all just speculation--Just like those of you who think that MS will have a stranglehold on the market if the PS3 slips to 2007 or that the Revolution will fail because the controller is ghey and its won't be as powerful, etc etc. Is the news so boring that all we have to relate to people is guesses and fanboy bravado? I guess so. Hopefully E3 and DevCon and GDC and the rest will help shut some of the speculators up.

 

[Maxi]

Letting the release slip from Spring 06 to Spring 07 will kill Sony.

Not really. If you knew even a little more you'd know Sony sells other things than playstations.

 

[Shamrock]

Not really. If you knew even a little more you'd know Sony sells other things than playstations.

Obviously I meant with the PS3. Of course millions will still purchase the PS3. I am just saying that it will definetly lose a lot of customers to the 360.. Then again I myself will have both so I could care less!

 

[TIIMMYY]

My local gamestation are saying £489.99 for the console and £59.99 for the games. :|

 

[WhiteZero]

Hmm, I know it's an estimate, but letting the release slip into 2007 would really let Microsoft get a strangehold on the market.

I disagree. Xbox came out more than a year after the PS2 and it did just fine. Granted PS2 still did better, but still.

And loosing money for underpricing a console is nothing new.

 

[Axyon]

I disagree. Xbox came out more than a year after the PS2 and it did just fine. Granted PS2 still did better, but still.

And loosing money for underpricing a console is nothing new.

I didn't say that the PS3 would die out or anything, but one might expect the reverse situation of your description to occur this time round.

 

[The Mullinator]

I am glad we have all of the industry analysts from Halflife2.net putting forth their predictions as to what system will fail and why. Maybe industry insiders will finally start taking us seriously!

TBH, what do these guys know? Its all about making a prediction that is heard by the most people and reprinted by the most media outlets. That is to say, it has to be a relatively outrageous claim. These analysts have been predicting this and that for ages now and while it all seems based on reason and logic, its still all just speculation--Just like those of you who think that MS will have a stranglehold on the market if the PS3 slips to 2007 or that the Revolution will fail because the controller is ghey and its won't be as powerful, etc etc. Is the news so boring that all we have to relate to people is guesses and fanboy bravado? I guess so. Hopefully E3 and DevCon and GDC and the rest will help shut some of the speculators up.

Umm, the article never once talks about whether they think it will be succesful or not. Only what they think the PS3 will cost to manufacture (and I trust the numbers they have given are going to be relatively accurate) and they give a potential situation to explain when Sony may release the system.

They don't really need to know much about the games industry to give an estimated manufacture price, they only need to know about computer hardware prices.

 

[AiM]

They don't really need to know much about the games industry to give an estimated manufacture price, they only need to know about computer hardware prices.

I disagree, how do you know hardware component costs without an inside source? No one knows how much it costs Sony to manufacture Cell processor chips, how much each Nvidia GPU unit cost based on bulk, etc. Without this type of information, all these estimations are worth less than a grain of salt.

 

[The Mullinator]

I disagree, how do you know hardware component costs without an inside source? No one knows how much it costs Sony to manufacture Cell processor chips, how much each Nvidia GPU unit cost based on bulk, etc. Without this type of information, all these estimations are worth less than a grain of salt.

They know the manufacturing processes, the R&D costs, they have comparisons with previous products, they have chip manufacturing plant information, they review every announcement and change with company policy, they know what is going into the chip and how it is going in. They could be wrong but chances are the estimates they give are very accurate.

Sony themselves have said that the PS3 will be "very expensive". They don't have insider information but it they do have the information needed to give a reasonably accurate estimate of hardware costs. Microsoft never released the cost to manufacture and Xbox 360 but it is estimated to be around $720 if I remember correctly, everyone knows Microsoft is selling it at a loss and everyone was pretty sure that the PS3 would be more expensive to produce than an Xbox 360. So really this fits a very general criteria.

Also remember that this is not an estimated retail price, everyone is pretty certain that Sony will be selling the system at a loss, the question is how much of a loss. That would be an estimate that at the moment I would not trust no matter what the number was.

 

[AiM]

They know the manufacturing processes, the R&D costs, they have comparisons with previous products, they have chip manufacturing plant information, they review every announcement and change with company policy, they know what is going into the chip and how it is going in. They could be wrong but chances are the estimates they give are very accurate.

Sony themselves have said that the PS3 will be "very expensive". They don't have insider information but it they do have the information needed to give a reasonably accurate estimate of hardware costs. Microsoft never released the cost to manufacture and Xbox 360 but it is estimated to be around $720 if I remember correctly, everyone knows Microsoft is selling it at a loss and everyone was pretty sure that the PS3 would be more expensive to produce than an Xbox 360. So really this fits a very general criteria.

Also remember that this is not an estimated retail price, everyone is pretty certain that Sony will be selling the system at a loss, the question is how much of a loss. That would be an estimate that at the moment I would not trust no matter what the number was.

I was under the impression that the integral portions of the PS3 are developed with cutting edge technology (specifically the Cell), it'd be pretty hard to gauge their prices based on current technology.

Regardless, all these estimations dont' matter to us as consumers, it's the final price tag that matters. Frankly I wouldn't mind if they crammed in $900 worth of hardware and sold it at $400-500...it'd be great value. I mean the next-gen PC GPU are expected to be released at even higher retail prices ... which alone would probably cost as much as a PS3.

 

[Ravioli]

Looks i should have waited to buy the stocks at sonys
Dont worry, its fake stocks lol.

 

[Dr. Freeman]

Hmm, I know it's an estimate, but letting the release slip into 2007 would really let Microsoft get a strangehold on the market.

not that Microsoft won't have it anyway... :upstare:
this Blu-ray tech is looking more costly than its benefits to be honest.

 

[VictimOfScience]

Umm, the article never once talks about whether they think it will be succesful or not. Only what they think the PS3 will cost to manufacture (and I trust the numbers they have given are going to be relatively accurate) and they give a potential situation to explain when Sony may release the system.

They don't really need to know much about the games industry to give an estimated manufacture price, they only need to know about computer hardware prices.

That's okay, I wasn't talking about that. I was talking about the people on the forums who predict this sort of thing. But yeah, the keyword there is potential situation.

I do also want to state very clearly that these analysts have no idea how much of a loss Sony is willing to take with the PS3, so hearing an official pricepoint would be nice so that all of these people that specualte on hardware costs in relation to actual system price can be silenced. There was also confirmation from a Sony spokesperson this morning that the PS3 won't be delayed and will still launch in 2006 and Spring no less (which could mean June, but nevertheless). Source.

 

[Razor]

So you either get an Xbox360 now, wait for a console just as good as an Xbox360 for over a year, or you wait a year for a revoluntionary console that will revolutionise gaming forever that will cost 1/10th the price of the ps3

 

[VictimOfScience]

So you either get an Xbox360 now, wait for a console just as good as an Xbox360 for over a year, or you wait a year for a revoluntionary console that will revolutionise gaming forever that will cost 1/10th the price of the ps3

Oooh, there's a lot of speculation here:

1) Its still hard to find a 360 in some places (in the US at least), so getting one now is still dicey.
2) We don't know if the PS3 will be "just as good as" (or better/worse than) the 360.
3) We don't know it will be over a year to wait for the PS3.
4) We don't know that the Revolution will revolutionize gaming forever.
5) We don't know (but we're pretty damn sure) that the Revolution will be 1/10th the price of the PS3.

With so much up in the air regarding the next two major console launches, people feel the need to venture guesses about what might be in order to keep their minds preoccupied in the interim or to keep their fanboy antagonism at a satisfyingly malevolent level. There's plenty more to concern yourselves with than this idle speculation. We'll get all the news we need this year, probably by May, so why all the big (and vacuous) talk?

 

[dream431ca]

Ya. If the PS3 doesn't show something soon, it's gonna be a rough ride for sony for the next 2-3 years. X360 already has a fantastic online interface, and next month in march, some very huge games are coming out:

Saints row
Oblivion Elderscrolls 4
Ghost Recon Advanced Warfare (Which I will be getting no matter what)

 

[AiM]

They know the manufacturing processes, the R&D costs, they have comparisons with previous products, they have chip manufacturing plant information, they review every announcement and change with company policy, they know what is going into the chip and how it is going in. They could be wrong but chances are the estimates they give are very accurate.

Sony themselves have said that the PS3 will be "very expensive". They don't have insider information but it they do have the information needed to give a reasonably accurate estimate of hardware costs. Microsoft never released the cost to manufacture and Xbox 360 but it is estimated to be around $720 if I remember correctly, everyone knows Microsoft is selling it at a loss and everyone was pretty sure that the PS3 would be more expensive to produce than an Xbox 360. So really this fits a very general criteria.

Also remember that this is not an estimated retail price, everyone is pretty certain that Sony will be selling the system at a loss, the question is how much of a loss. That would be an estimate that at the moment I would not trust no matter what the number was.

"However, it should be borne in mind that Osha makes no particular claim to have insider knowledge of Sony's manufacturing or materials costs for the console - and while he explains his reasoning for some of the price tags he attaches to materials, others remain entirely inexplicable."

Exactly the point I was making, except Eurogamer notes that Osha never mentions a solid source for his few disproportionate prices (Blu-Ray / Cell). The article notes that his expensive estimated prices stems from basically assumptions, Osha believes the Cell processor will be costly to make because it's "of the fact that the die size of the chip is large, and mostly made up of logic circuits rather than the easier to repair memory circuits." ... which goes against the announcement made by IBM senior Vice President Zeittler.

Also, Osha puts a huge price-tag on the Blu-Ray data drive which there aren't any solid indications as to how much the stand-alone drives will cost (which brings up the question as to how he got his claim). While the devices could end up expensive, there aren't any solid information tobase that estimation on. The current market only has tentative price points for Read-Write drives, different from the PS3 is expected to use.

"In other words, while Merrill Lynch's report has not only impacted Sony's share price today, but has also kicked off a storm in the mainstream media about the status of PS3, some of its basic assumptions appear to be founded on shaky ground - and like all analyst reports dealing with the technical aspects of console manufacture or game development, it deserves to be viewed with a healthy dose of scepticism."

Eurogamer

Edit:

5) We don't know (but we're pretty damn sure) that the Revolution will be 1/10th the price of the PS3.

Logical reasoning would say there's no way in hell Revolution will cost 1/10th the price tag of PS3, realistically the price tag is expected to be ~$500 ... no way Revolution will cost $50 bucks. To have that statement come true would mean the PS3 will need to retail at ~$1500 - 2000 ... hahahaha. Now if you were referring to the manufacturing cost, then you might have a similar ballpark figure.

 

[VictimOfScience]

Logical reasoning would say there's no way in hell Revolution will cost 1/10th the price tag of PS3, realistically the price tag is expected to be ~$500 ... no way Revolution will cost $50 bucks. To have that statement come true would mean the PS3 will need to retail at ~$1500 - 2000 ... hahahaha. Now if you were referring to the manufacturing cost, then you might have a similar ballpark figure.

Yeah, you have to figure they'll be $800-$900 to produce, but they will sell them for $400-500(USD). It'll mean huge losses at first, but if that is what it takes to establish Blu-Ray as the standard (which I really don't care that much about at this point), then that is well worth it in their eyes as they stand to make a fortune off of that format (should it "win").

It has been said that the Rev will be "under $300," but of course that means that it could very well be $299--not exactly the deal everyone is making it out to be. Its still going to be an amazing machine, but just not quite as cheap as people seem to think.*

*Of course, I could be wrong about this and frankly I would love to be wrong and see the Rev be priced around $199 or less, but that just seems improbable.

 

[AiM]

It has been said that the Rev will be "under $300," but of course that means that it could very well be $299--not exactly the deal everyone is making it out to be. Its still going to be an amazing machine, but just not quite as cheap as people seem to think.*

*Of course, I could be wrong about this and frankly I would love to be wrong and see the Rev be priced around $199 or less, but that just seems improbable.

The price point of $200 isn't too far fetched, I mean it all depends on much markup pricing they want. The Revolution hardware is pretty much on-par with the current Gamecube tech, although slightly improved. Overall it shouldn't cost all that much to manufacture since outside of the controller, it's seems like the architecture are very similar.

 

[VictimOfScience]

The price point of $200 isn't too far fetched, I mean it all depends on much markup pricing they want. The Revolution hardware is pretty much on-par with the current Gamecube tech, although slightly improved. Overall it shouldn't cost all that much to manufacture since outside of the controller, it's seems like the architecture are very similar.

Let us both continue to hope that this is true. :cheers: