| Dodece said: I find it somewhat obscene that nobody is even bothered to use a similar product in an effort to gauge what the 360s production to price parity should be. You could use the PS3 for this. Sony before the financial crisis was expecting to reach production price parity in the first quarter of next year at the latest. Microsoft beats Sony on all of the curves. Their low end model has seen a hundred dollar retail price reduction. Note I was generous with the hundred dollar savings on the removal of the emotion engine from the PS3. So basically Microsoft has to be at the least matching Sony's own estimations, and doing so with a year longer extension into the life cycle after bringing to market seven million more consoles. So I leave you with a conundrum either Sony were lying through their teeth about reaching price production parity in which case they are guilty of defrauding their investors |
You should be a little more careful about freely issuing such highly libeluous statements. Now granted, nobody at Sony takes your fanboy statements for anything else than lunatic rants so you are reasonably safe from a cease-and-desist letter from a lawyer. However, that doesn't make them better in any way.
Now here is some food for thought for you:
1. Current manufacturing costs for an XBox Arcade: around $240
2. Current manufacturing costs for other XBox models: around $270
3. Current manufacturing costs for a PS3: around $350
(All estimates +/- 5-10%. Any no and no again, I'm not going to tell you or any kid why I know these estimates are reasomanly close to the truth).
Now currently, the arcade sells around $210 in Europe. This value is the final sales price in all shop and includes all state and local taxes as well as shop margins (which are very likely lower than Wall-Mart's margins in the States). All this amounts to around 20-35% MS has to forfeit on the $210 price, so MS gets around $150-170 for their arcades an around $200 for their other models. this gives you a rough idea how MS is losing money. Now the price for a PS3 in Europe has a MSRP of around $540. Again this includes all taxes and shop margins. If Sony gives shop margins as low as MS, thy get around $350-$380 for their console, essentially manufacturing parity or even a slight profit. Notice that Sony in other territories very likely is not on parity (and MS probably loses even more on the manufacturing level than in Europe).
Now for the general readers some food for thought:
In forums like these, there seems to be the general consensus that manufacturing costs go greatly down in time and particularly, people seem to be fond of the argument that a die shrink is the deus ex machina, the ultimate cost saviour that drives down costs in the hundreds of $. Now you should consider the following points before you pray these mantras:
Manufacturing costs always increase on many levels - wages go up, raw material costs go up, taxes go up, transportation costs go up (shipping a container from continent A to B once was around $4000, now it is around $7000 just as an example), environment protection costs go up. A die shrink eventually reduces your costs typically by 30% in the end, but only AFTER the manufacturer has recouped the costs for exchanging the necessary machines. Also keep in mind that all consoles were designed with mass manufacturing processes right from the drawing board, so there are no magical cost saving changes involved at any time in the life of the consoles. Also it might be good to remind people of the difference between manufacturing costs and production costs, which even professional companies occationally seem to forget (there is this infamous table floating around that gives manufacturing costs of $850 for a PS3 - let me assure you that manufacturing a PS3 never cost more than $550 - ithey probably knew the production costs of around $850 for a PS3 and made a faulty manufacturing price breakdown table to get to this value).
