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Forums - Gaming Discussion - Wii U vs PS4 vs Xbox One FULL SPECS (January 24, 2014)

Andrespetmonkey on 18 September 2012
Viper1 said:

I arrive at the costs I did as follows:

The PS3 in Japan cost ¥59,980 at launch.  But it cost much more than that to build because of the Blu-ray drive and the CELL processor.  So Sony took a huge loss...even at ¥59,980.

If we were to remove the CELL and Blu-ray drive, they could have sold the PS3 at ¥59,980 and broke even.   Let's say the PS4 cost is like the PS3 costs only minus the expensive Blu-ray and CELL.   That would mean they could sell the PS4 in Japan for ¥59,980 and break even.  But if they did that, it would require the PS4 to be sold in the US for $766 to also break even using the current 78.6295 Yen to 1 USD exchange rate.

Does that make more sense now?

Yeah, thanks.

The problem I have is you're assuming I think the PS4 cost will be as you described. 



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Chark on 18 September 2012
Viper1 said:
Andrespetmonkey said:
Viper1 said:

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.

No it wouldn't... What are you talking about? Since when did we decide on how much a PS4 is going to cost to make? Why are you assuming it would cost $766 to make? All I've said is a $100 could be made back, I've not said anything in relation to how much it'll cost at retail and how powerful it'll be, but now I will: I think it should cost $500 to make, and sell for $400. Does this clear anything up? Or is it not you who is consufed but me? don't mean for the first few questions to sound hostile... I'm honestly a little confused.

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.

I arrive at the costs I did as follows:

The PS3 in Japan cost ¥59,980 at launch.  But it cost much more than that to build because of the Blu-ray drive and the CELL processor.  So Sony took a huge loss...even at ¥59,980.

If we were to remove the CELL and Blu-ray drive, they could have sold the PS3 at ¥59,980 and broke even.   Let's say the PS4 cost is like the PS3 costs only minus the expensive Blu-ray and CELL.   That would mean they could sell the PS4 in Japan for ¥59,980 and break even.  But if they did that, it would require the PS4 to be sold in the US for $766 to also break even using the current 78.6295 Yen to 1 USD exchange rate.

Does that make more sense now?

Using that rate you are looking at roughly $40 loss for the japanese PS3. The PS3 cost about $805(I was wrong with the $880 in my other post) Everyone knows the $200 loss on US PS3s at launch but that doesn't mean there was a similar loss in Japan. Selling the PS3 in Japan without the extra cost of what Cell and bluray added would have made Sony a considerable profit if they sold it for 60k. Without cell and bluray you are looking at 20k yen cheaper meaning if they are looking at doing a similar $40 loss they could sell the PS4 for 40k yen or about $500 in the US to do the same. I'm also only concidering the added cost of cell and bluray to be $250.

You can't just assume these numbers and let them fly out there. You are missing the fact that different regions sell at different rates. The huge loss from PS3 wasn't made in Japan but in the US and then in Europe.



Before the PS3 everyone was nice to me :(

Viper1 on 18 September 2012
Andrespetmonkey said:
Viper1 said:

I arrive at the costs I did as follows:

The PS3 in Japan cost ¥59,980 at launch.  But it cost much more than that to build because of the Blu-ray drive and the CELL processor.  So Sony took a huge loss...even at ¥59,980.

If we were to remove the CELL and Blu-ray drive, they could have sold the PS3 at ¥59,980 and broke even.   Let's say the PS4 cost is like the PS3 costs only minus the expensive Blu-ray and CELL.   That would mean they could sell the PS4 in Japan for ¥59,980 and break even.  But if they did that, it would require the PS4 to be sold in the US for $766 to also break even using the current 78.6295 Yen to 1 USD exchange rate.

Does that make more sense now?

Yeah, thanks.

The problem I have is you're assuming I think the PS4 cost will be as you described. 

I think you're still slightly missing the point.   It's not about how much you or I think it will cost, it's about how different the exchange rate has changes since 2006.  This means we have to change our way of thinking how a console can and will be priced.

To be more specific, anything Japanese will have to sell at a far hgiehr price in foreign markets now than they did in 2006 to make the same margins (profit and loss).

 

Go back to what I posted at the Wii.
Wii 2006 in Japan = ¥25,000 = $205 (in 2006) and $320 (today).

That's a huge difference.  That means if the Wii were to launched today instead of in 2006, it would have to cost $320 in the US to make the same amount of profit or loss as it did back in 2006.  Launching it now at $250 (liek they did in 2006) would mean they take a $70 loss on every Wii sold in the US.

Do you see how that impacts the pricing now?   



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superchunk on 18 September 2012
Viper1 said:

I think you're still slightly missing the point.   It's not about how much you or I think it will cost, it's about how different the exchange rate has changes since 2006.  This means we have to change our way of thinking how a console can and will be priced.

To be more specific, anything Japanese will have to sell at a far hgiehr price in foreign markets now than they did in 2006 to make the same margins (profit and loss).

 

Go back to what I posted at the Wii.
Wii 2006 in Japan = ¥25,000 = $205 (in 2006) and $320 (today).

That's a huge difference.  That means if the Wii were to launched today instead of in 2006, it would have to cost $320 in the US to make the same amount of profit or loss as it did back in 2006.  Launching it now at $250 (liek they did in 2006) would mean they take a $70 loss on every Wii sold in the US.

Do you see how that impacts the pricing now?   


Meaning that if Sony wants to remain competitive it should be targeting a US price of around $400 to $450 as  a MAX. That means the Japan price is probably around 30,000 YEN... considering Wii U is 25,000YEN at a profit of some kind, how much more advanced do you realistically think a PS4 could be to be within that range of price at a small profit? Also remember that Vita is selling for a very small loss or profit which is showing Sony has no intention of repeating the massive losses of previous gens.



Andrespetmonkey on 18 September 2012
Viper1 said:

I think you're still slightly missing the point.   It's not about how much you or I think it will cost, it's about how different the exchange rate has changes since 2006.  This means we have to change our way of thinking how a console can and will be priced.

To be more specific, anything Japanese will have to sell at a far hgiehr price in foreign markets now than they did in 2006 to make the same margins (profit and loss).

 

Go back to what I posted at the Wii.
Wii 2006 in Japan = ¥25,000 = $205 (in 2006) and $320 (today).

That's a huge difference.  That means if the Wii were to launched today instead of in 2006, it would have to cost $320 in the US to make the same amount of profit or loss as it did back in 2006.  Launching it now at $250 (liek they did in 2006) would mean they take a $70 loss on every Wii sold in the US.

Do you see how that impacts the pricing now?   

Ok, this is what I thought you meant first. I get it.

So let's say it's made for $500 and sold for $400. What would the price be for Japan, still keeping the loss at $100?



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drkohler on 18 September 2012
superchunk said:

While I haven't taken much stock in it, there is at least one recent rumor that MS has decided to forgo the original Power7 CPU and follow Sony's similar approach with an AMD APU for the same reasons.

That is highly unlikely. Kinect2 (looking at those leaked docs and more obvious clues) requires massive amounts of processing power. AMD's processors are currently considerably weaker than Intel stuff or any Power7 stuff - the rumoured quadcore Jaguar chip for the PS4 is a sad joke in itself. A six core Power7 looks like a good compromise between power and price.



superchunk on 18 September 2012
drkohler said:
superchunk said:

While I haven't taken much stock in it, there is at least one recent rumor that MS has decided to forgo the original Power7 CPU and follow Sony's similar approach with an AMD APU for the same reasons.

That is highly unlikely. Kinect2 (looking at those leaked docs and more obvious clues) requires massive amounts of processing power. AMD's processors are currently considerably weaker than Intel stuff or any Power7 stuff - the rumoured quadcore Jaguar chip for the PS4 is a sad joke in itself. A six core Power7 looks like a good compromise between power and price.

The Jaguar chip is not the main rumor, read my OP. The Jaguar chip is a mobile/netbook based chip. That part is clearly wrong.

However, Sony is going with a 4core APU according to everything leaked so far.

As for Kinect2, the original Kinect had more cameras and a CPU built into the device. MS removed that to reduce costs. Kinect2 is likely just a more advanced version of what was originally built. It very well may have a small mobile type CPU built into it to offset the power from the main console as well as re-adding in the cameras that were removed.



Viper1 on 18 September 2012
Andrespetmonkey said:
Viper1 said:

I think you're still slightly missing the point.   It's not about how much you or I think it will cost, it's about how different the exchange rate has changes since 2006.  This means we have to change our way of thinking how a console can and will be priced.

To be more specific, anything Japanese will have to sell at a far hgiehr price in foreign markets now than they did in 2006 to make the same margins (profit and loss).

 

Go back to what I posted at the Wii.
Wii 2006 in Japan = ¥25,000 = $205 (in 2006) and $320 (today).

That's a huge difference.  That means if the Wii were to launched today instead of in 2006, it would have to cost $320 in the US to make the same amount of profit or loss as it did back in 2006.  Launching it now at $250 (liek they did in 2006) would mean they take a $70 loss on every Wii sold in the US.

Do you see how that impacts the pricing now?   

Ok, this is what I thought you meant first. I get it.

So let's say it's made for $500 and sold for $400. What would the price be for Japan, still keeping the loss at $100?

A $400 US cost would be ¥31,434.   Keep in mind that the 32 GB Wii U is priced at ¥31,500.  

It's really had to reverse the concept of cost since the price and costs originate in Yen so you really need to start there first.  That in mind, if the 32 GB Wii U is going to sell for ¥31,500, I can imagine to have a powerful PS3, it would likely cost more.  Even with a loss.  And then you do the conversion back to USD...or GBP, Euro, etc....

Point is you have to start wiht the Yen first to begin to understand what it will cost here, how much losses they can expect and how powerful they can design (given the costs).



The rEVOLution is not being televised

Andrespetmonkey on 18 September 2012
Viper1 said:
Andrespetmonkey said:

Ok, this is what I thought you meant first. I get it.

So let's say it's made for $500 and sold for $400. What would the price be for Japan, still keeping the loss at $100?

A $400 US cost would be ¥31,434.   Keep in mind that the 32 GB Wii U is priced at ¥31,500.  

It's really had to reverse the concept of cost since the price and costs originate in Yen so you really need to start there first.  That in mind, if the 32 GB Wii U is going to sell for ¥31,500, I can imagine to have a powerful PS3, it would likely cost more.  Even with a loss.  And then you do the conversion back to USD...or GBP, Euro, etc....

Point is you have to start wiht the Yen first to begin to understand what it will cost here, how much losses they can expect and how powerful they can design (given the costs).

So if the PS4 is made for 40k yen, that's just over $500 right? Wouldn't that still be a just over $100 loss if sold for $400 in merica? And that could be sold for 35k yen in Japan?



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Viper1 on 18 September 2012
Andrespetmonkey said:

So if the PS4 is made for 40k yen, that's just over $500 right? Wouldn't that still be a just over $100 loss if sold for $400 in merica? And that could be sold for 35k yen in Japan?

Pretty much.   But that won't quite give you a full powerhouse console.   It would be toned down at that price.    Unless they were taking a huge loss in Japan too.  But as we've seen with the exchange rates, big losses in Japan would mean even bigger losses in the US and abroad.

The market simply isn't there for Sony to release another overly powerful system.   The PS4 will still be strong, stronger than the Wii U but the economics simply won't allow it to be too much stronger.

 



The rEVOLution is not being televised