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[ComputerMKII]

CBOAT pls

 

[Ghost]

Sony have some phenomenal engineers.

This is the real truth of the issue. Sony have done a hell of a job getting what they've got for how much they are spending, the RAM upgrade especially has just worked out perfectly for them when it could have gone so so wrong if prices didn't hit where they expected.

 

[Hcoregamer00]

Well it's not really that bad compare to last gen .
Can't remember MS numbers but Sony was losing $300 on each console early on .

Yup, both Sony and MS are losing money, but with the purchase of a few games that turn profitable.

This is in stark contrast to both the x360 and PS3, which couldn't become profitable until they introduced heavy cost cutting measures.

 

[Tobor]

Amazing how we thought the inclusion of 8GB of GDDR5 was so profligate at the time, only for it to it turn out to be a mere $28 difference in the final accounting.

Yeah, there were people absolutely convinced the PS4 would be $500+ after that announcement.

 

[Mr Moose]

Sony got a more powerful chip at less the cost than MS?

I'm sorry but...

 

[krizzx]

Interesting. Seems it would be cheaper than the PS4 if they made a Kinectless one. Thy can save cost by removing the sensor and hve the OS just run regularly. But seems they really are forcing it in people.

I thought the posts above made it pretty clear that it would still cost more.

On a side note, Sony must be getting one heck of a special discount from the hardware manufacturers. I smell unfair business practices afoot.

 

[Curufinwe]

Amazing how we thought the inclusion of 8GB of GDDR5 was so profligate at the time, only for it to it turn out to be a mere $28 difference in the final accounting.

Even the experts were wrong. And certain people claimed GDDR5 would do more than just make the PS4 expensive.

http://www.neogaf.com/forum/showpost.php?p=87464959&postcount=332

http://www.eat-sleep-game.com/news/2...413/#more-2143

Listening to Arthur Gies chat on that episode now.

"8 gigabytes of DDR5 RAM would be incredible - if it happens!"
"A) It's going to drive up the price B) It's going to cause more heat C) It takes more wattage from the power supply to drive it and D) It's going to be a supply chain problem"
"There's going to be a fucking price war on DDR5 this fall!"
"I don't know that the PS4 will have that much RAM in when it ships."

http://www.neogaf.com/forum/showpost.php?p=87459973&postcount=274

I seriously wish I had the patience to listen to it again, but if anyone wants a crash course on Arthur Gies 101, go back and listen to the February 26th episode of the Rebel FM podcast. Dude was on fire with Sony FUD after their announcement. I'll just give you a quick sampling of his statements on that episode.

-we'll see if PS4 actually has GDDR5 in it when it launches. Doesn't believe Sony.

-PS4 might very well have production problems due to using GDDR5, because it's very hard to make.

-PS4 is going to be uber expensive because it uses GDDR5.

-PS4 is going to be very large because of all the heat GDDR5 creates.

That is just a sampling from my memory, but I happen to listen to that episode a few months ago and had some great laughs at just how wrong he was over, and over, and over again.

 

[inherendo]

Sony got a more powerful chip at less the cost than MS?

I'm sorry but...

The ESRAM takes a good part of the die, which adds a good chunk to the price. You'd really have to compare chip plus memory to get a somewhat equal comparison. Again, performance is not the same, but yeah...

Even the experts were wrong.

http://www.neogaf.com/forum/showpost.php?p=87464959&postcount=332

28 bucks is still a decent chunk, but yeah, long run would have been better to eat the cost. But shareholders probably wouldn't have liked that.

 

[twobear]

Isn't MS paying more for the chip basically just because it's a bigger chip, hence more chance for problems in fabrication, hence fewer usable chips per wafer?

 

[strata8]

These are similar to the numbers we came up with. The difference in the apu cost is the added complexity of the embedded ram at the fab.

Maybe partly, but the XB1 die is also ~5% larger than the PS4s (363mm2 vs. 348mm2). Again due to the eSRAM, but not because it's more complex.

 

[typical_user]

I wonder how much the "Always Listening" during standby adds to price. I'd bet that's included in the "processor". I'd also bet that the Flash Memory adds to the "Other" category.

 

[Eusis]

Not really. It's likely that DDR3 + eSRAM was a choice made early on to guarantee 8GB of RAM. Sony chose GDDR5 for the performance + simplicity and lucked out when it became available in higher densities. Remember that the PS4 originally only had 4GB of RAM.

I guess there's that one common thread; they made the wrong bet. Microsoft was safer, and we'd have a real discussion of less RAM versus faster ram, but then they got to eat their cake and have it too.

 

[McHuj]

You should look at the price of the APU with memory as one. Long term for both, the prices should really come down significantly, but I think the DDR3 has a much lower cost floor than GDDR5.

However, if the breakdown is correct MS really fucked themselves on the other costs like the "other" which I assume accounts for the cooling system and PCB complexity. I'm surprised their PSU is more expensive. Bigger enclosure with more components resulted in higher assembly cost. There's about 37 dollars worth of difference in the other categories (not including Kinect) between the consoles. That's big.

 

[hesido]

no, the PS4 GPU is significantly more powerful. The reason the Xbone is struggling with anything over 720p isn't because of the RAM.

The esram eats away significant portion of the die, which may otherwise be filled with CU's. The die size is the most significant cost to making a chip, along with details like how much faulty "spots" you can tolerate before having to throw that chip away.

So yes, it is quite affected by their RAM choice.

 

[iamshadowlark]

they got lucky

DDR3 prices spiked because of that Hynix fire in china and GDDR5 prices dropped enough to jump to 8 gigs

because MS decided to go with DDR3 they had to make up for the bandwidth with ESRAM which took away area from the GPU

I wouldn't call that luck, more like better planning. I really don't get where the lucky narrative comes from because it doesn't seem that firmly based on reality. Sony's well connected in the semiconductor world, it wouldn't be all that shocking to know that they had a projection of GDDR5 prices and planned their console accordingly.

 

[Crimson_Gold]

this.

from all account Sony was going with 4 originally and got lucky with pricing.

Gopher has said that there is more to it than that.

 

[harSon]

Are these breakdowns ever right? Considering what Sony and Microsoft have said, the figures don't seem right. These figures obviously don't account for advertising, manufacturing, R&D, etc. which are hidden costs behind every electronic. Microsoft had said that they were making money, or at the very least, breaking even with each Xbox One sold. Sony had said the same thing if the consumer purchased a game or two alongside the console, suggesting that they're taking a hit with just the console purchase itself. These breakdowns don't jive with either story.

 

[Skenzin]

Sony, GDDR5 prices will come down a bit in the near term while DDR3 is already at base cost. Also, GDDR5 will continued to be developed for a longer period of time than DDR3 as well which will help Sony as the investment required will be carried out anyway, rather than adding significantly to the cost of the chips they purchase.



Basically, yes. It's just a methodology difference.

MS will redesign around DDR4 and restrict any performance difference to maintain compatibility.They did something similar with later 360s and faster edram. Yield processes will improve price of XBone APU, but the redesign will be more complicated than Sony's because of the esram.

Basically MS will be able to reduce silicon costs better than Sony, BUT not by much. And if you factor in Kinect, it will be negligible. Sony will always be tied to GDDR ram.

 

[CoG]

So, MS paid $10 more for the CPU to save $18 on the RAM. A blunder in retrospect considering it gimped the GPU and increased the complexity of development.

 

[zomgbbqftw]

Isn't MS paying more for the chip basically just because it's a bigger chip, hence more chance for problems in fabrication, hence fewer usable chips per wafer?

Yes. Less chips per wafer, and usually larger chips have a lower yield too. Especially complicated ones like this which include off the wall stuff like eSRAM.

 

[spoonztt]

Forgive me for asking this but what are the chances of MS releasing an upgraded XB1 sometime down the road? Has that ever been done with a console previously?

 

[McHuj]

Isn't MS paying more for the chip basically just because it's a bigger chip, hence more chance for problems in fabrication, hence fewer usable chips per wafer?

yeah, pretty much. the embedded SRAM could be more susceptible to yield issues because it's probably very dense in comparison to logic. But yeah, the wafer is a fixed size and fixed cost, so you're going to get less of the bigger chips and they'll have slightly worse yields (since they're bigger).

 

[Tobor]

You should look at the price of the APU with memory as one. Long term for both, the prices should really come down significantly, but I think the DDR3 has a much lower cost floor than GDDR5.

However, if the breakdown is correct MS really fucked themselves on the other costs like the "other" which I assume accounts for the cooling system and PCB complexity. I'm surprised their PSU is more expensive. Bigger enclosure with more components resulted in higher assembly cost. There's about 37 dollars worth of difference in the other categories (not including Kinect) between the consoles. That's big.

It's not surprising. The Xbone PSU is external and has its own case and fan adding to the cost.

 

[FullMetaltech]

I thought the posts above made it pretty clear that it would still cost more.

On a side note, Sony must be getting one heck of a special discount from the hardware manufacturers. I smell unfair business practices afoot.

Yes my mistake. Didnt notice it till the the breakdown made it more clear that the Ps4 is by far cheaper to produce.

 

[GameAddict411]

why didn't MS go with the GDDR5 when it's only $28 more expensive? the XO APU being more expensive is understandable because of the eSRAM, someone at microsoft fucked up pretty badly.

 

[SwiftDeath]

Great now a kinect less sku seems impossible

How the hell did the XB1 turn into this thing?

More expensive than the ps4 sans camera? Wat?

 

[AHA-Lambda]

 

[iamshadowlark]

Are these breakdowns ever right? Considering what Sony and Microsoft have said, the figures don't seem right. These figures obviously don't account for advertising, manufacturing, R&D, etc. which are hidden costs behind every electronic. Microsoft had said that they were making money, or at the very least, breaking even with each Xbox One sold. Sony had said the same thing if the consumer purchased a game or two alongside the console, suggesting that they're taking a hit with just the console purchase itself. These breakdowns don't jive with either story.

It's a BoM. This takes into account parts and manufacturing. If you're looking for profit margins then you need more info than this type of breakdown intends to give you

 

[gundamkyoukai]

That was based on non-final figures. On the final figure we think a $30-40 loss is more reasonable in the US and Japan. In Europe they are probably breaking even.

As for MS, losing $10-20 in the US, marginally profitable in Europe.

Thanks zomg guess it pays to have the bigger fan base in EU .

 

[BLACK AMERICAN PSYCHO]

I thought the posts above made it pretty clear that it would still cost more.

On a side note, Sony must be getting one heck of a special discount from the hardware manufacturers. I smell unfair business practices afoot.

Nah, MS are just idiots when it comes to hardware.

 

[Vestal]

why didn't MS go with the GDDR5 when it's only $28 more expensive? the XO APU being more expensive is understandable because of the eSRAM, someone at microsoft fucked up pretty badly.

because from the word go they wanted 8GB and believed that gddr5 prices would not be what they are.

 

[zomgbbqftw]

MS will redesign around DDR4 and restrict any performance difference to maintain compatibility.They did something similar with later 360s and faster edram. Yield processes will improve price of XBone APU, but the redesign will be more complicated than Sony's because of the esram.

Basically MS will be able to reduce silicon costs better than Sony, BUT not by much. And if you factor in Kinect, it will be negligible. Sony will always be tied to GDDR ram.

GDDR5 will move to 8Gbit chips which will yield a large saving for Sony. Eventually they could move to low speed 8Gbit GDDR6 chips and limit the performance much like MS can move to DDR4. I don't see either move as being important to the sales picture as they will not come for 3-4 years.

Also, DDR4 of equivalent performance to DDR3 will carry a price premium for a while because DDR3 is already at base cost. So year, 3-4 years for this stuff to matter, which is too far in the future to really make a difference to the market share outcome.

Forgive me for asking this but what are the chances of MS releasing an upgraded XB1 sometime down the road? Has that ever been done with a console previously?

Zero.

Last example would be DS -> DSi, which really didn't add a lot in terms of improved performance.

 

[Dyno]

The difference in RAM was a lousey $28! Just goes to show that MS was hell-bent on giving us what they wanted instead of giving us what we wanted.

It's a sub-par gaming box hardwired for subscriptions and microtransactions. Even without Kinect I would be afraid to hook one up right now. In six months I want to see what the average consumer is paying through their Xbone. This device seems poised like Vegas to take your money.

 

[Steroyd]

why didn't MS go with the GDDR5 when it's only $28 more expensive? the XO APU being more expensive is understandable because of the eSRAM, someone at microsoft fucked up pretty badly.

Microsoft wanted 8GB of RAM no matter what, there was no way they would have settled with 4GB of GDDR5 RAM like Sony was content with at one point, their 3 OSes speaks volumes.

 

[mrklaw]

Also, the cost of the box without Kinect is $347 by this estimate vs $381 for PS4. A Kinect-less SKU would not have much more price flexibility than the PS4 in the grand scheme and GDDR5 prices will come down faster than DDR3 which is already close to base cost. Add in pressure on MS to profit from the outset with the Bone and if anything a Kinect-less SKU will not be able to undercut the PS4 at all and it will be a straight fight on power and first party games, one that I don't believe MS can win.



$407 was the final figure.

this is a good point - hopefully it means MS won't drop kinect. For all its polarising of opinion on this site, it is pretty central to what MS want to do in the living room.

 

[McHuj]

It's not surprising. The Xbone PSU is external and has its own case and fan adding to the cost.

I guess I'm surprised in that I assumed the PS4 one would have to be a higher quality one because it has to work efficiently in an enclosure and thus cost more. I assumed MS went with the cheapest off the shelf one.

 

[spwolf]

Amazing how we thought the inclusion of 8GB of GDDR5 was so profligate at the time, only for it to it turn out to be a mere $28 difference in the final accounting.

$28 x 90mil consoles = $2.5 billion

$28 is anything but "mere".

Problem is that MS spent, overall, more money and got lesser performance.

 

[Arttemis]

Sure, I get that. Still seems a horrendous mark up though. And dodgy practices are dodgy practices, even if everyone does them.

4x price mark up is horrendous? I hope you don't shop at Walmart, because everything there is marked up from pennies to dollars.

 

[borghe]

Forgive me for asking this but what are the chances of MS releasing an upgraded XB1 sometime down the road? Has that ever been done with a console previously?

Sure.. "plenty" of times. 32X, TurboCD/TurboDuo, N64 RAM Pack...

Kind of the point/problem. Fragmenting a systems market typically does little to advance it, and in almost all cases software is still written largely to the largest install base (see many Android apps still largely written targeting Gingerbread)

On top of that, an upgraded system (xbox or otherwise) means adding cost. It either means raising the price, OR "raising the price" by virtue of not lowering it when costs allow to do so. And on a system that is already facing a pricing challenge, that's not what they want to do.

Basically the XBONE that's shipping (hardware) is the XBONE that will exist for the generation. They'll be able to improve manufacturing efficiency and can improve "bolt on" technologies (like 360 did with HDMI and WiFi) but the actual core hardware can't be improved without fragmenting the existing XXmillion users who already bought to original hardware.

 

[feint_ruled]

$28 x 90mil consoles = $2.5 billion

$28 is anything but "mere".

Problem is that MS spent, overall, more money and got lesser performance.

Haha, obviously if you multiply anything by 90 million it's gonna be big. I just meant the difference was expected to be so much more that Sony would have to price the PS4 prohibitively.

 

[PG2G]

Wasn't the PS4's use of 8 gigs of GDDR5 more of a by product of the release of higher density memory chips?

 

[mrklaw]

MS will redesign around DDR4 and restrict any performance difference to maintain compatibility.They did something similar with later 360s and faster edram. Yield processes will improve price of XBone APU, but the redesign will be more complicated than Sony's because of the esram.

Basically MS will be able to reduce silicon costs better than Sony, BUT not by much. And if you factor in Kinect, it will be negligible. Sony will always be tied to GDDR ram.

the APU will drop in price faster for Sony - the chip is smaller so yields will already be higher. Plus the esram may make process shrinks more complex and lag behind PS4

I think neither have a huge advantage in terms of long-term cost reduction

 

[stryke]

$28 x 90mil consoles = $2.5 billion

$28 is anything but "mere".

Problem is that MS spent, overall, more money and got lesser performance.

I doubt prices would stay the same long enough when 90 million units are sold.

 

[Coulomb_Barrier]

Distributor margin, retail margin, cost of packaging/shipping, transfer pricing tax, other misc.cost.

BoM doesn't tell the whole story.

MS are certainly paying more for shipping because the packaging is almost 50% bigger. PS4 comes in such a small box. Another clever way to save costs.

 

[PG2G]

the APU will drop in price faster for Sony - the chip is smaller so yields will already be higher. Plus the esram may make process shrinks more complex and lag behind PS4

I think neither have a huge advantage in terms of long-term cost reduction

From Anandtech

The 32MB of embedded SRAM is costly, but SRAM scales well with smaller processes. Microsoft probably figures it can significantly cut down the die area of the eSRAM at 20nm and by 14/16nm it shouldn’t be a problem at all.

 

[DieH@rd]

$407 was the final figure.

How about PS4 Camera cost?

 

[fi1ip]

Dat Mark Cerny, dat "I actually know what I'm doing" approach.

 

[iamshadowlark]

$28 x 90mil consoles = $2.5 billion

$28 is anything but "mere".

Problem is that MS spent, overall, more money and got lesser performance.

This would imply that the price stays the same for 90m consoles worth if production which PS3 hasn't even hit yet and 6+ years. And it's also flawed to try and make a point of this when you would have to extrapolate things like revenue and profit too.

 

[sixteen-bit]

And they're passing on the expense to the consumer

 

[zomgbbqftw]

Wasn't the PS4's use of 8 gigs of GDDR5 more of a by product of the release of higher density memory chips?

Yes, they moved from 16x 2Gbit chips (4GB total) to 16x 4Gbit chips (8GB total). That move will have added 25-30% onto the memory costs since 4Gbit chips are new and much higher on the curve than 2Gbit chips.

By the end of 2014 the difference in RAM costs will be much less than $28 because the 4Gbit chips will naturally become cheaper and I'm sure Hynix want a piece of that sweet PS4 money so will underbid Samsung when Sony put the next production contract out for tender.

Theory: Microsoft went for the APU because the Xbox 360 was notorious for overheating and dying. An APU is less likely to have heat issues than a CPU + GPU. This would also explain why the Xbox One is fat compared to the PS4; Microsoft is paranoid about heat killing the hardware this time.

Time will tell if the PS4 is more vulnerable to overheating than the Xbox One.

APU is a bad choice for any console.

PS4 has an APU as well btw. It's smaller and more powerful to boot.