Wii U vs PS4 vs Xbox One FULL SPECS (January 24, 2014)

[Viper1]

Andrespetmonkey said:

Viper1 said:

You didn't read my full post on the foreign exchange situation.   It won't take a console liek the PS3 (with CELL and Blu-ray eating  up heavy R&D and production costs) but the simple strengthening of the Yen to foreign curencies mean to make the same profit margin, or keep the margin of loss the same, will require a far higher price now than it did in 2006.

I'll do it again for you.

PS3 was ¥59,980 which was $558 USD in 2006.   Today, that same ¥59,980 is now $766 USD.   Obviously they can reduce the cost of the PS4 because it won't have Blu-Ray or CELL like costs associated with it.   So we can knock that down to as low as ¥39,980.   That's $510 USD today.    Do you think Sony can sell a console with a base price of $500 next year?  No  If it's priced at ¥59,980, you'll either have a $750 console or losses in the foreigns markets even greater than PS3 scale.

Are you making the assumption that I think it'll be the same techbeast the PS3 was?

And about that $1 billion loss.   If Sony sells  25 million games in that time frame.  5 million are 1st party.   That's about a little more than half gained back.   You can't make the other half back in peripherals and F2P will not even begin to put a dent into that figure. PS+? Netflix-type services? Streaming services maybe? DLC? 

Keep in mind that my ¥59,980 figure is the retail price point for the PS3 launch in Japan.  Not the actual BOM which was much higher.   In other words, if the PS3 had a standard CPU and DVD drive, they could have sold it at that price with no loss.   What I'm saying is that they can price the PS4 at ¥59,980 and would likely break even in Japan.    The problem is that would mean it would need a $766 price tag in the US to break even.

Obviously you can't sell a $766 PS4.  So they'd have to cut the price down much lower.  You already agreed that even a $500 price tag is too high.  To go down to a $400 launch price would mean a $366 loss per US console sold.

Naturally, that's not the way to go.    So a ¥59,980 price in Japan is too high.  Now you can reduce the capability of the system greatly and bring it down to a more manageable ¥39,980.  But even that would again require a $510 US price tag to break even.  So to get your $400 price in the US, they'd have to take a $110 hit per US console sold AND the capabilites of the system had to be reduced to do it.

I am guesssing somewhere around ¥35,000 for Japan which would need a $450 US price tag.   A $50 loss per console is now closer to their budget but the console won't be the powerhouse even hopes it will be.

The foreign exchange rates simply won't permit it.