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drkohler said:

So in your small and very naive world, you sell your goods at (or more precisely, below) manufacturing costs?

Toddifer is quite right in his assessment, over the long run. However, the initial batches of consoles usually carry a much higher loss, depending on the planned time span (and batch size) the manufacturers want to recoup costs. My estimate is that initial PS4s carry a production cost around $550-$600 (always keep in mind these complex SoC are completely new and untested so there is quite a risk of extremely low initial yields).

I'm really tired of those people here who say "anything over $299/$399 is too much". For both XBox and PS4, a price of $600 would be more than fair (considering a similarly equipped PC costs you more).

You're right.
The PS4's soc is going to be relatively massive, 2.5-3 Billion transisters for the GPU and possibly 900 million - 1.4 Billion transisters for the CPU, in a single chip that's going to be bloody massive, could almost push towards 4-4.5 Billion transisters when other silicon is taken into account. (I.E. Logic, controllers, spare area, de-activated hardware etc'.)
It's going to be expensive initially if those yields are bad, then again 28nm is getting fairly mature anyway so it may counteract the low-yield issue.

What they could do though to reduce costs and get around the low yield issue is to resell those APU's into the PC space, if a few cores aren't working sell it as a Quad/Hex Core with a Radeon 7850' APU etc'.
Would beat throwing them into the bin...



--::{PC Gaming Master Race}::--