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haxxiy said:

Cost reduction is definitely still doable this gen. Assuming the APUs are 300 mm2 on 7nm and 100 mm2 on 3 nm, that's the difference between 160 vs. 550 dies per wafer. More than enough to compensate for the shrink even with the cost per wafer doubling (to the tune of ~ $25 saved per APU).

Of course, there will be redesign costs involved, but there will be savings in power consumption and supply, form factor and shipping, etc. in the long run.

It's not that there will be no cost reductions, it's just that they're reportedly anticipated to become comparatively meagre over time.  For example, Microsoft said of the 360:

"Series S has been very impactful for us. As we design our new consoles for the new generation, we're very much looking forward through the generation to be thinking ahead - like, how does this work? - and that's why we got to two consoles at the same time," Goossen continued. "We are facing a big change in how consoles are designed. I believe when we first started building the original Xbox 360 - the smallest one without the HDD - that cost us about $460. By the end of the generation it cost us around $120 - and that cost reduction path was driven principally by silicon cost reduction."

We didn't see anything that major last gen, and they're predicting even less this gen.