That would be a powerful console. For 40kyen/$500 Sony could definitely get these specs or better considering the loss. Well, imo it's a powerful console, nothing beastly like PS360 but nothing to scoff at either, a significant jump over Wii U and big jump over this gen for a very reasonable price.

I think you have the cost idea, but really have to think about what that means in terms of technology.

WiiU 32GB is 31,500Y

PS4 base at 35,000Y is pushing it to reach market prices outside of Japan. Removing the tablet controller and Sony has some play room in the console itself, but it still fits in with the idea of it having a HDD, bluray, newer GPU in a special APU design, etc.

In the end, there should be no reason anyone expects Sony and very likely MS to have a console that is significantly more advanced that Wii U. They will all be within a similar ball park... or at least close enough to not matter to 3rd parties.

Sold for 35k, costing 40k to make. Before I go on, do you know roughly how much nintendo lose/gain on the Wii U?

I'm sure Nintendo is making a small profit.

However, I think you're assuming they'll sell PS4 for a loss and that far less likely now.

Viper pointed out that Sony's financial stability as a company is not the same now as it was in 2006. Vita has been argued since launch if it was at a loss or not, seems like it was a very, very small loss if any, once you include the mandatory memory.

I highly doubt Sony will go for any signifant loss and $100 per console is significant.

Your thread you linked above had a logic flaw. It showed a 285 cost of materials and a price of 299. That makes no sense. There is A LOT more to the cost of a product than just its core materials. As an example, the Vita was said to have a cost of $180, yet it sells for $250 at a very small loss or maybe small profit. That is just for a small handheld with less packaging and shipping costs associated.

If Sony is targeting a 35,000Y to 40,000Y product for sale, then its likely targeting a total cost of materials around 2/3rds of that. It simply won't be a "powerhouse" with these financial limitations.

I read your list and I'm not sure an HD 7850 is possible given the 130 watt TDP.   That's very high.    The GPU's in the PS3 and X360 were between 60 and 80 watts.  A game console chassis cannot disspate heat as well as a computer tower can.

You are also running into the currency problem we discussed above.   You can't price a build in Pounds because it doesn't work that way.   You have to price it in Yen first and then exchange it to the other currencies.  And you can't simply convert your Pounds to Yen.   You need to find out what those componenets cost in Yen first.   I know that's a pain in the ass to do but if you go about it the other way around, you end up miscalculating what the actual build cost will be.

For example, your $310 build cost would be ¥24,369.    That's far lower than the Wii U itself and more than the $39 retail margin you added.  Which, by the way tends to be little to zero margin at all.   It's why many retailers rfused to carry the PSP Go.

Sony will sell the PS4 at a larger loss margin in the US, then in Europe, while losing the least amount in Japan. That is how everyone seems to price their hardware on the world market. The US always gets the best "deal". The PS4 will cost anywhere from 35k to 50k in Japan is my bet. It all depends on what they end up putting under the hood. Either way it is expected that they are spending $100 or more to manufacture it than the Wii U. If they didn't the jump from PS3 would be not be substantial enough. It is not going to be some kind of God machine but you might be surprised what a dedicated system can do with an extra $100 to $200 under the hood. Especially one that launched 1 to 2 years after.

If people are not going to spend more than $400 on a console then there is no point in new consoles any time soon. 

I think MS had the right aproach with the Xbox live 2 year subscription sale. Get the people to put $200 down up front then make them pay $25 a month for 2 years. If they don't like that they can pay $600 up front. With the extra services that a next gen console will require to make it worth while, that service charge should be no big deal. Throw some games out for subscribers every month like PS+, and everyones happy.

With that route they guarantee every console under the subscription makes profit. People paying the $600 up front will be buying a lot of games, and they will be paying the $60-70 for a year of XBL3.0, so they can afford a loss on those units.

In addition to that, why not just make next gen platforms instead of devices. Take the multiple SKU idea of this gen and expand it. Have a base model with the bare min., and have higher end models with bells and whistles. The base model can be the loss leader, while the top end skus break even or make money.

Consoles as they stand right now are not going to make it. MS and Sony have to adapt to a changed market. Nintendo can do wahtever they want because people are just there to play Nintendo games at the end of the day. We are at a point right now were nearly any company could make a next gen platform, and get right in the thick of things. Make a standard hardware with no royalties and an open atmosphere, and they would have every thrid party their in a heart beat. We all know third parties sell the most hardware, and they may even doexclusives to a platform like this because it would help drive out the royalty empire made by the current players.

Yeah I highly doubt Sony will want to sell the PS4 for a loss. I could see them breaking even in Japan and Europe and selling for a small loss in the US. But they don't have the resources they once had to be ok with selling for a loss.

Thank you for this nice organized thread, will be coming back later for updates :)