Sony PS3 to be delayed to 07, and Cost $900 to make?

[SirFozzie]

The North American launch of Sony's much-anticipated PlayStation 3 could be delayed until next year, according to a research report issued by Merrill Lynch.

In the report (Click here for PDF), the analyst firm proposed the idea that high costs and Sony's decision to use an "ambitious new processor architecture--the Cell" is making it look like the company might not be able to meet its goal of getting the PS 3 out in the U.S. this year.

The report suggests the possibility that the PS 3 would launch this fall in Japan and in late 2006 or early 2007 in the U.S.

Naturally, it's impossible to know what will really happen with the PS 3, as Sony has maintained a policy of being about as tight-lipped as it could be. But there's no doubt that any significant delay in the next-gen console's launch would be a big black eye for the company, especially since Microsoft has had its Xbox 360 out since last November.

Sony did not immediately respond to a request for comment.

In the end, we probably won't know what's going to happen until at least May, when the video game world converges on Los Angeles for E3, the industry's biggest gathering. But it's looking more and more like Sony may be forced to keep mum even there, and that certainly wouldn't play well.

(also in the report is that the initial cost of a PS3 is expected to be $900)


Article: http://news.com.com/2061-10797_3-604...1208&subj=news
Merriill Lynch Report: http://rsch1.ml.com/9093/24013/ds/276873_0.PDF

[Raiders Army]

No surprise there, especially the cost. Blu-Ray is supposed to be freakin expensive. I think the Blu-Ray DVD players were going to be $500-600. If the PS3 is supposed to support that and play games, $900 sounds about right.

[dervack]

I'm going to say that it will release in 06, at a price of 499.

[MizzouRah]

Originally Posted by dervack

I'm going to say that it will release in 06, at a price of 499.

..and I'll be there to get one. Unlike the 360, I'm going to pre-order a ps3 this time.

[dervack]

Originally Posted by MizzouRah

..and I'll be there to get one. Unlike the 360, I'm going to pre-order a ps3 this time.

Meh. I really like my 360, and I can't see myself buying one right away. I'm sure I will eventually, but right now, no.

[ISiddiqui]

I'm going to pass on the PS3. Then again, I never owned a PS2, either. Doesn't seem worth it to me to spend that much.

[IwasHere]

Originally Posted by MizzouRah

..and I'll be there to get one. Unlike the 360, I'm going to pre-order a ps3 this time.

Even if the report is correct and the price tag is $900?

[SirFozzie]

that's not the pricetag, that's just the cost to make, they may be willing to take a loss on the hardware

[sterlingice]

Originally Posted by SirFozzie

that's not the pricetag, that's just the cost to make, they may be willing to take a loss on the hardware

Not only that, but that will be the initial cost while they're selling it mostly in bundles, selling you stuff like a $5 remote for $50 so their loss won't be quite as bad. Then, as the production lines get up and running, the cost will go down significantly.

SI

[SackAttack]

I'm betting it will either be $449, unbundled, or $499 with a game included (factory package; EB and GameStop will bundle the hell out of it).

I say that only because the $600-$900 I've heard speculated, depending on the source, seems like suicide given that the Revolution will kick in at probably $299 or so, and that the 360 will be ready for a price drop by the time the PS3 hits shelves. I just can't see it being a viable system at $600, let alone at $900.

Ordinarily, I would agree with SI that Sony will make up the early losses on higher peripheral prices, except that Microsoft will be in a position to do to Sony what Sony did to Microsoft this generation - cut the price of controllers and the like, forcing the other to take an early hit to that profit center to stay competitive.

I think the ideal for Sony would be to bundle 2 or 3 games in with the system, and sell it for the higher price. Yes, you lose out on the licensing fees on the software, but you reduce the value resistance from the consumer. If I'm getting 3 games with it, I can justify it by saying "Well, it's really only like spending $450," if the system launches at $600.

And again, EB and GameStop (and some other places) will bundle the hell out of it. You want to make sure that the core unit holds enough value for the customer that they aren't completely turned off by the bundle prices we're going to see (which are already ugly for the 360, and that's on a $300-400 base price).

[MacroGuru]

From what I have heard, I expect the PS3 to be released in time for the holidays, they have to hit the market at that time in order to make up for their lateness to market.

[MizzouRah]

Originally Posted by IwasHere

Even if the report is correct and the price tag is $900?

It's not going to be $900, I don't buy that for one minute. If it is, then no, I won't buy it until the price drops.

The ps3 has the ability to play at 1080p, which ironically is what my new TV will be able to do. I'm hoping as we talked in another thread that Blu-Ray is able to take advantage of that technology. Actually, my ps2 has had so much use that I can see the ps3 getting just as much, if not more use. Plus, I can't wait to see games like MLB The Show on the ps3.

[Philliesfan980]

Originally Posted by MizzouRah

It's not going to be $900, I don't buy that for one minute. If it is, then no, I won't buy it until the price drops.

The ps3 has the ability to play at 1080p, which ironically is what my new TV will be able to do. I'm hoping as we talked in another thread that Blu-Ray is able to take advantage of that technology. Actually, my ps2 has had so much use that I can see the ps3 getting just as much, if not more use. Plus, I can't wait to see games like MLB The Show on the ps3.

I've seen you around OS lately... do you think MLB The Show is worth getting a ps2 for? I'm really going to be in the mood for a good baseball game come April, and from what I've read, mlb 2k6 is looking to be a disappointment.

[Airhog]

Originally Posted by sterlingice

Then, as the production lines get up and running, the cost will go down significantly.

SI

It's all about the Materials management and procurement. They will need to drive down the cost of materials. I think a good target(at least where I work) is approximately 5-10% per business quarter. Really the only part of the production that they can reduce costs is reduce the build time. However, that build time is finite. They can only reduce it by so much, maybe 5%

[sterlingice]

Joystiq is reporting that the $900 figure isn't even accurate as the prices they showed had it adding up to $800. D'oh Still, that's a lot of cash
http://www.joystiq.com/2006/02/18/pl...-900-per-unit/

That said, by comparison, here's the X360, weighing in at $715, so what's another hundred bucks, particularly when you pass it on to the consumer...
http://www.joystiq.com/2005/12/28/xb...s-715-to-make/


SI

[SackAttack]

The problem with most of these sites and their figures is that I'm pretty sure that's retail cost, not true production cost.

[MizzouRah]

Originally Posted by Philliesfan980

I've seen you around OS lately... do you think MLB The Show is worth getting a ps2 for? I'm really going to be in the mood for a good baseball game come April, and from what I've read, mlb 2k6 is looking to be a disappointment.

Yes I do. If I didn't have a ps2, I would just for that game.

If you pre-order it, you'll get a demo of the game. Looks like they've fixed the rocket arms, strikezone, and there seems to be more variation of hits.

http://www.operationsports.com/fofc/...ad.php?t=47173

[Kodos]

I am in the camp that says there is no way the core unit will come out for more than $500. They know it won't sell well higher than that, and they are willing to take a loss early on, knowing they can make it up later in software sales. Also, they want their Blu-Ray technology to win the technology war. And I believe it will come out this fall.

[sterlingice]

Originally Posted by Kodos

I am in the camp that says there is no way the core unit will come out for more than $500. They know it won't sell well higher than that, and they are willing to take a loss early on, knowing they can make it up later in software sales. Also, they want their Blu-Ray technology to win the technology war. And I believe it will come out this fall.

Yeah, that's pretty much what I wrote about on Gamenikki last night in my blog:

Originally Posted by gamenikki

Second is the story of the $900 PS3 costs. Now, I'm not thrilled with financial "analysts" talking gaming to begin with as it's typically like watching a football fan trying to stumble his way through a baseball discussion with gems like "Derek Jeter's the best player in the game since he has a lot of World Series rings". For example, a couple of weeks ago there were a couple of ludicrous PSP vs DS projections including one where they used Sony's number shipped for the PSP as number sold but used the numbers sold for the DS to base their projections on. And someone pays them to do this.

This analysis has a similar credibility flaw right off the bat as the report claims a $900 price tag despite their numbers only adding up to $800. Still, a lot of people were taking this $900 price tag and "reporting" likely PS3 launch prices at $600 and up, flawed reasoning on many counts. First, Joystiq had a very similar article which pegged preliminary cost estimates for the X360 at $715 and it still sold at the $300/$400 launch price point. A $400 or maybe $500 price tag for the PS3 launch seems much more likely. Second, companies typically lose money on the consoles themselves, particularly at launch. Near as anyone can tell, the Xbox console has always lost money and accounts for a lot of that $4 billion shortfall over the lifespan of the system. Thirdly, these costs come down as the console ages. The article claims the cost in 3 years will only be $320 per system, allowing Sony to make a price drop or two and either be breaking even or losing a much smaller amount before too long. Finally, these are estimates. None of this is based on official public and published facts. It's not as if you can walk up to IBM and ask how much a Cell costs, much less what bulk rate they are selling them to Sony at.

It seems really unlikely that we'll see a higher than $500 price point for the PS3 as it would be market suicide. That's just not something Sony can afford to do when it has the hopes of both the gaming and movie divisions resting on the PS3 having a huge install base.

http://www.gamenikki.com/g3/blogs/Frank.php (The second entry, below TWIN #13)

SI

[dixieflatline]

cnet has a very interesting article on the PS3 and the XBOX manufacturing costs here:
http://news.com.com/PlayStation+3+co...?tag=nefd.lede
I'm not going to copy the entire article because it is quite long but it appears that the initial cost of the PS3 will be in the $725-$900 range but that is expected to drop significantly after a few years of production. There is a nice breakdown on each of the components that goes into the XBOX and PS3. They also put the retail price at around $299-$399 to compete with the XBOX. That seems like quite a big price hit to me. No hints as to the release date though.

[SFL Cat]

Delayed? Hmmm.....Maximum Playstation!!!!

[SackAttack]

Originally Posted by Kodos

I am in the camp that says there is no way the core unit will come out for more than $500.

That's a turn of phrase that rather interests me. With some of the vintage units, I recall "core unit" being used to distinguish between the system that came with a game or games, and the one that didn't.

There was a Sega Genesis core unit, system and one controller, and a Sonic the Hedgehog bundle, by way of explanation. There was usually a price difference, but not on the level we see today.

These days, it seems to have a different meaning: the core unit enjoys basic functionality (whereas in the Genesis example, both systems worked the same, one of 'em just didn't have any games in the box), while the "premium" unit is more expensive (sometimes greatly so), and has added functionality, but still doesn't have a game in the box.

Interesting evolution of the language in the industry.

[SirFozzie]

Looks like there was at least some fire causing this smoke..

http://www.next-gen.biz/index.php?op...=2352&Itemid=2

Few in the industry believe that PlayStation 3 will launch in the spring. It looks like Sony may be ready to announce a delay. A company spokesperson has admitted that a delay is possible.

Sony has told the media that the launch of the console will be delayed due to difficulties in finalizing the Blu-ray drive's specs. An unnamed spokesperson for Sony Computer Entertainment in Japan admitted that PlayStation 3 launch could be delayed.

SCE said that if final specs were not finalised with the Blu-ray Disc development consortium, the launch of the console could be delayed.

Famitsu president Hirokazu Hamamura, is quoted, "Sony has not begun taking orders early this month, that means that it would be difficult for the company to begin sales in May."

Until now, Sony has steadfastly stuck to its previously announced launch date of "spring" without offering any further details. Most industry observers believe the machine will be launched in Japan and North America in the fall.

[SackAttack]

I never thought we'd see it here in the spring. That it could slip to fall even in Japan is surprising.

Are they seriously going to attempt a global Christmas launch after the, um, "fun" Microsoft had with the Xbox 360 this past fall? I'd almost pay to watch that.

[gstelmack]

Originally Posted by SackAttack

Are they seriously going to attempt a global Christmas launch after the, um, "fun" Microsoft had with the Xbox 360 this past fall? I'd almost pay to watch that.

Finally found a 360 sitting on the shelf at a local Target last night. Now they have none, and my brother-in-law's family will finally get their Christmas present...

[wade moore]

If this slips to christmas time, Sony could be forcing my hand to Microsoft for the next run of football games.. and I don't intend to buy both...

[dixieflatline]

Well Wade looks like they might be forcing your hand. From the playstation business briefing:

Sony has officially announced that the release of the PS3 is postponed from this spring to early November of 2006. However, the release of the PS3 will be global - Asia, North America and Europe will be getting the release in the mean time. Sony will be able to offer 1 million consoles per month after the release, to meet the need of the users around the world.

Interesting that they have decided to make a global release.

[wade moore]

Originally Posted by dixieflatline

Well Wade looks like they might be forcing your hand. From the playstation business briefing:



Interesting that they have decided to make a global release.

Tsk Tsk, Xbox 360, here I come...

[MizzouRah]

Looks like it's November for me.

[Cringer]

I am actually a llittle happy about this. Now I don't have to feel like I am missing out on it while I try to save up some extra money to buy one.

[Kodos]

November for PS3. October for next season of BSG. September for football.


Waiting sux.

[SackAttack]

Originally Posted by SackAttack

Are they seriously going to attempt a global Christmas launch after the, um, "fun" Microsoft had with the Xbox 360 this past fall? I'd almost pay to watch that.

Looks like I'll get my chance!

[SackAttack]

Interesting quotes from GameSpot's article about the announcement:

Originally Posted by Ken Kutaragi

"We view the hard drive to be mandatory for the PS3. Rather than have developers create games for the PS3 with or without the HDD, we will be asking them to develop games as though all PS3s have the HDD installed.

Followed almost immediately by this nugget:

Originally Posted by GameSpot

However, Kutaragi revealed that Sony had not decided whether or not the PlayStation 3 would come with the hard-drive preinstalled. "We might end up installing it in all PS3s, though that depends on the market," he said. This raises the possibility that the PS3 could be sold without a piece of hardware needed to play PS3 games--in effect forcing consumers to buy a peripheral for basic functionality.

So...sell the system absent the hard drive, presumably around $400-500, but require the hard drive to make the system work. Just like that, instant $100-150 accessory sale and the ability to go before the media and crow about "record accessory attachments."

I'm aware that Microsoft did something similar in splitting the 360 market into Premium and Core users, but at least the Core will play games without the hard drive.

This...hell, Sony, why not just sell the console by itself with no video or power cables and no controller? Make people buy those separately, too. Heck, that way people can get only the video cable they want, rather than getting RCA and then buying an additional component video or HDMI cable for their high-definition setups. Everybody wins!

[Raiders Army]

I wish I had an RCA cable for my Xbox 360 this summer when we move back to El Paso. Now I'll have to buy one dammit.

[SackAttack]

Originally Posted by Raiders Army

I wish I had an RCA cable for my Xbox 360 this summer when we move back to El Paso. Now I'll have to buy one dammit.

They don't actually sell them separately, I don't think.

The core comes with an RCA, the premium comes with an RCA/RGB.

Sold separately, there's RCA/S-Video or RCA/RGB.

[gstelmack]

Originally Posted by SackAttack

The core comes with an RCA, the premium comes with an RCA/RGB.

Yup. If you have a premium, there's a switch on the cable that chooses between RCA/RGB and instructions with the console on which ends go where when using with a standard TV.

[Raiders Army]

Originally Posted by gstelmack

Yup. If you have a premium, there's a switch on the cable that chooses between RCA/RGB and instructions with the console on which ends go where when using with a standard TV.

Cool. I didn't know that. I thought there were too many plugins...

[SackAttack]

Originally Posted by gstelmack

Yup. If you have a premium, there's a switch on the cable that chooses between RCA/RGB and instructions with the console on which ends go where when using with a standard TV.

Actually, I'm pretty sure the switch isn't from RCA/RGB but from HD to non-HD when using the RGB side of the cables.

[gstelmack]

Originally Posted by SackAttack

Actually, I'm pretty sure the switch isn't from RCA/RGB but from HD to non-HD when using the RGB side of the cables.

Yup, you're correct, my mistake. Missed that extra yellow connector. You have RGB video, composite video, and stereo audio all on the same cable, rather than overloading a connector as I suggested.

[Kodos]

A couple of sites are now reporting that PS3 will come standard with a 60 GB hard drive.

http://uk.videogames.games.yahoo.com...rd-3c0925.html

PS3 will have hard drive as standard [PS3]
Friday March 17, 11:12 AM

Our Sony representative has confirmed this morning that PlayStation 3 will come with a 60GB HDD as standard, but that can be upgraded if preferred.

Some of the larger US websites have been speculating that PlayStation 3 would be shipping with an optional 60GB hard disc drive. However we can confirm this morning that all PS3 consoles will be sold with the HDD out of the box. Sony's president of Computer Entertainment, Ken Kutaragi, announced on Wednesday that all PS3 games are being developed to take advantage of the 60GB HDD.

Another essential use for the HDD will be Sony's online service, which will offer downloads in a similar way to Microsoft's Xbox Live platform. Clearly now it is Sony's intention to standardise the PlayStation 3 community, so that all developers know that everybody who owns PS3 will benefit from HDD-related features in-game. Bizarrely this used to be Microsoft's standpoint with its original Xbox, but the Redmond corporation has since taken an about turn with Xbox 360.

http://www.the-magicbox.com/gaming.htm

P L A Y S T A T I O N 3

- SCE president Ken Kutagari announced that the PlayStation 3 launch will be delayed to November 2006, due to Blu-Ray spec finalization, mainly for copyright protection. The PS3 will launch in November 2006 worldwide, before Thanksgiving in all territories. Sony plans to produce at least one million units of PS3 each month, and the goal is to ship 6 million units worldwide by the end of March 2007.

- PlayStaton 3 will launch with the new PlayStation Network Platform service, which offers online gaming services similar to Xbox Live. The new service will be "free".

- PlayStation 3 will have a built-in 60GB 2.5" hard drive, which will be preloaded with Linux operating system. The hard drive can be used as a home server, it will be fully upgradable. Kutaragi told software developers that every PS3 will have a hard drive installed, as it is mandatory. Sony has not decided whether the hard drive will be sold as a separate (mandatory) peripheral or bundled with the console.

- Sony confirmed that all PS3 games will be released only on Blu-Ray discs, as DVDs are too easy being duplicated. PS3 is still capable to play DVDs and CDs, and fully backward compatible with PS2 and PSone.

- Sony announced that the final PS3 development kits will be shipping out to production studios in June; currently more than 15 companies are development middleware and dev-tools for PS3.

[SackAttack]

Originally Posted by Kodos

- PlayStation 3 will have a built-in 60GB 2.5" hard drive, which will be preloaded with Linux operating system. The hard drive can be used as a home server, it will be fully upgradable. Kutaragi told software developers that every PS3 will have a hard drive installed, as it is mandatory. Sony has not decided whether the hard drive will be sold as a separate (mandatory) peripheral or bundled with the console.

Kodos, if every PS3 will come with the 60 GB HD, that's encouraging news, but quotes like this one kind of dirty the waters some.

Every PS3 will have a hard drive installed, as it is mandatory. Okay, great. Sony has not decided whether the hard drive will be sold as a separate (mandatory) peripheral or bundled with the console?

This is exactly what the American sites have been speculating about - the possibility that the PS3 will have a mandatory component sold separately, which in turn effectively raises the price of the console beyond whatever the officially announced MSRP is.

The first story you cited seems to answer that question - that it will be in the box at retail. The second one is still clouding the issue somewhat.

Hopefully it ships with the console, but the demand for premiums and for separate hard drives for the 360 does seem to indicate that, provided the hard drive is available at launch, and not three years after the fact (à la PS2) makes splitting the market much less of an issue than I originally believed.

If they sell it separately, as Microsoft has done with the 360, I think they'll be okay as long as it's available at launch.

[dixieflatline]

Some more info on what Sony is thinking about the harddrive and the Linux OS on it:

From an interview with the president of Sony Ken Kutaragi:

"We're positioning the PS3 as a supercomputer", he says, "But people won't recognize it as a computer unless we call it a computer, so we're going to run an OS on it. In fact, the Cell can run multiple OSes. In order to run the OSes, we need a hard disk. So in order to declare that the PS3 is a computer, I think we'll have [the hard disk] preinstalled with Linux as a bonus.

Kutaragi said the PS3 will run operating systems as applications. "The kernel will be running on the Cell, and multiple OSes will be running on top of that as applications. Of course, the PS3 can run Linux. If Linux can run, so can Lindows. Other PC Operating Systems can run too, such as Windows and (Mac OS) Tiger, if the publishers want to do so. Maybe a new OS might come out," he adds.

He says that providing hard disk with the PS3 will permit the, um, console, to be used as a computer - for applications beyond gaming. Video editing and photo retouching are examples of applications that could be run on a Linux-powered PS3, he suggests.

This just doesn't seem like the right direction to me. Who in the world is going to run video editing or photo retouching on their PS3? On some level having linux installed makes sense because it takes up very little space on the harddrive and operates very quickly. If you are going to install things like video editors though you are missing out on one of the linux advantages (though the photo retouching isn't too big a problem because GIMP is pretty small). Also, Sony seems pretty adamant about not letting homebrew type aplications run of the PSP and if they do indeed go with linux on these hardrives it is only a matter of time before homebrew pops up for the PS3.

[Eaglesfan27]

To me those comments seem to be attempting to set up justification for a huge price point on the PS3.

[Anthony]

if people wanted to do video editing and photo retouching, why wouldn't they just use a computer?

[stevew]

Originally Posted by Eaglesfan27

To me those comments seem to be attempting to set up justification for a huge price point on the PS3.

Yeah, you could sell it to the parents crowd for a bit more money if you call it a computer. Makes it sound like it will be $699 fully loaded(or more).

[dawgfan]

Originally Posted by Hell Atlantic

if people wanted to do video editing and photo retouching, why wouldn't they just use a computer?

Price - the PS3 could very well be a terrific bargain in comparison to a comparable PC.

[Raiders Army]

I really don't see how the PS3 will sell for less than $900.

http://www.msnbc.msn.com/id/12093612/

According to this article the price of a regular Blu-Ray player will be "less than $1,500". I don't see Blu-Ray players selling for $1,000 and the PS3 selling for $699 when it plays games as well.

[Blade6119]

Originally Posted by Raiders Army

I really don't see how the PS3 will sell for less than $900.

http://www.msnbc.msn.com/id/12093612/

According to this article the price of a regular Blu-Ray player will be "less than $1,500". I don't see Blu-Ray players selling for $1,000 and the PS3 selling for $699 when it plays games as well.

Sony is willing to take a loss short-term, as they did with PS2, as long as they feel they will make it up over the course of the system. Depending on what they expect sales to be, sony might be willing to take a big loss now to make a big gain later...i think sony knows $900 and they will lose a lot of customers...just my opinion

[Bee]

I thought it already was announced in Japan the PS3 wouldn't be more than $500 or whatever the equivalent yen would be?

[Kodos]

There's no way it will sell for even close to $900. I'd predict $500 tops. Plus, PS3 is important in the format wars. Sony wants Blu-Ray to prevail.