Why I don't see the PS4 and the X1 going below $300 price tag for a long time

wary-wallaroo

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wary-wallaroo on 09 July 2014

The X1 is going to probably have to drop soon. I see it being the first to $300 and even then it'll still struggle.

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mornelithe on 09 July 2014

thismeintiel said:
If a long time is 2-3 years, sure, it'll be a long time. And in reality, Sony cost of manufacturing is probably going to go down quicker than MS.

While they will both benefit from AMD reducing the prices on their chip manufacturing, since MS needs far fewer chips because of lower sales, they will always have to pay a higher price per chip than Sony, even though MS is already using a cheaper GPU as their base. DDR3 probably isn't going to get much cheaper than it is, now. I've even heard some theorize that it may actually go up in price as more move towards GDDR5 and DDR4. Their largest savings will be if the ESRAM they are using drops in price. Of course, with so few using that design, I don't know how fast that will happen.

Sony, on the other hand, gambled on GDDR5 and it's paid off. As more graphics cards switch to that type of RAM, the prices will begin to plummet. Also, the reverse of MS's situation, because of much higher sales, and therefore more units needed, Sony will pay a much lower price per unit.

In the end, one will switch to $349 next year. Either Sony because manufacturing costs have dropped, and want to bring even more heat to MS. Or MS to try and stay competitive. In 2016/17, we will 100% see both consoles at $299. And once the PS4 reaches $299, look out.

It's not a theory, it's how the market behaves everytime there's wide adoption of new memory technology, as demand shrinks, so does supply which makes prices go back up.

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alabtrosMyster on 09 July 2014

This would affect mainly the SOC and RAM, however other optimizations/cost cutting and higher yields can also reduce cost (however these factors did so too before)... From the look of it the PS4 is already pretty thightly integrated, which is a good thing, there is no apparent waste in its design, unlike the original PS3 versions that had all those USB ports and card reader slots (I would have liked a "deluxe" PS4 with a 1TB drive and 4 or 6 USB ports).

I think the market pressure will drive the XB1 to a lower price pretty soon, with that 75$ coupon MS is offering to some people you can get one for essentially 325$ now? That's pretty low, but this is because demand is lower than they would have wanted, for a lot of people getting an XB1 remains a compromise...

I wonder when Sony will drop the price of the PS4 before or after the holiday season? and it will probably be by 50, not 100$, and when they will release another SKU with a bigger drive or some other meaningful hardware changes.

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fatslob-:O on 09 July 2014

Tamron said:

relevant:

hexus.net/business/news/components/71929-tsmc-accelerates-development-10nm-process/

http://www.eetasia.com/ART_8800681560_480200_NT_ba307701.HTM

10nm also won't get us any cost reduction due to the fact that it's using the same ancient 193nm immersion lithography technology. There's a good reason why Intel settled for the 22nm node instead of the originally projected 20nm node from either TSMC or global foundries and that's because Intel wanted to avoid double patterning.

Oh and don't believe what TSMC says because they haven't been delivering lately much like how GF failed to deliver on the promises for AMD. BTW TSMC's 10nm is practically Intel's 14nm. It's amazing how Intel will have a 3 year lead on TSMC in the chip manufacturing department and Samsung will also end up being superior in this respect to TSMC despite the fact that it's a new player.