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Forums - Gaming - Microsoft Outsource Xbox 720 to Samsung !! ?

ukeatdabian said:

It is no secret that the original Xbox 360 contained many “off-the-shelf” electronic components, from disc drives down to chips. This was probably a factor that caused the dreaded “red ring of death,” which Microsoft found so difficult to overcome. This failure cost the company upwards of a billion dollars.


No less than Sony in regards to "Off-the-shelf" components.

Sony's CPU was in collabiration with a heap of other manufacturers based on the PowerPC execution unit that is of an IBM design, which they manufcture themselves if I remember correctly.
Microsoft's CPU is also based on a PowerPC execution unit that they also bought the design of and Manufactured at a Fab.

Sony uses a Geforce 7900 nVidia graphics card and Microsoft uses a Modifieid x1900/2900 Radeon.

Ram is serviced by your usual Suspescts such as Hynix, Samsung etc'.

The smaller components though are *always* sourced from multiple different companies so that if there is a supply issue, the console manufacturers don't get caught out, they would be stupid to only rely on one source for things like capicitors and chips.
Microsoft also learned from the origional Xbox in terms of manufacturing.
Over time things get cheaper to produce, but with the origional Xbox, nVidia didn't want to drop the cost per-chip that they were providing, so come the Xbox 360 they went with ATI and bought the design so they could make the chips themselves at a Fab, they then cut out another middle man that dropped the costs, ATI continued to provide support and help when it came to die shrinks and such.

Also making allot of components such as Wireless, Hard Drives etc' as an accessory helped the console to get profitible faster; then when such components dropped in price it was economical to bundle it into the system in the form of the Slim console.

As for console defects... Yes the RROD was a problem. However to Microsoft credit they supported those with the RROD rather well. Heck they even sent you a box to put the damn thing in, eventually the RROD problem would be a thing of the past, which was mostly caused by heat and the crap lead-free solder.

To put it in perspective though, Sony hasn't always had a good track record of "reliable" consoles either. I remember the PS1 with it's faulty laser, you had to have the console on an angle so that it would read a disc which was a common problem over time, The PS2 also had the common DRE problem and the PS3 has the Yellow light. Heck the Nintendo 64's thumbsticks use to wear out making the controllers a pain in the ass. Why people only single Microsoft out I will never know.

Would Microsoft out-source production to Samsung? Sure. If they could do it cheaper than Microsoft. Microsoft is a business, if Samsung can do it cheaper of course they will persue such a path, but at this stage it's still merely rumour. I don't expect a console till 2013 after Halo 4 has been released, the consoles are old, the graphics are poor. I personally can't wait for the next gen.




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Samsung was sourced as the manufacturer of the Surface 2 because they make LCDs. Plain and simple.

The Xbox 360's RRoD problem was a result of poor thermodynamic engineering. The heat build-up from the GPU caused the PC Board to warp, the warpage put pressure against the GPU and solder joints. The solder was not designed for the heat generated, resulting separation and cold solder joints.

No one is going to manufacture a branded game console for Nintendo, Sony, or Microsoft. The cost of manufacturing the device, as well as the cost of royalties paid to Nintendo, Sony, or Microsoft would make manufacturing the console a money losing proposition.

So the premise of the article is ridiculous.



Seece said:
Icyedge said:
Seece said:
Icyedge said:
 


True but many American product does appeal to the Japanese market too. I dont think that the problem with the 360 in Japan is that its American. If they would associate with a Japanese company this would surely help their image, but with a Korean one I dont think it changes anything.

That's true and false. I think the fact that it's physically American, doesn't matter one jot, but the fact, it is an American console in terms of flavour ... must be offputting for the Japanese.

Yeah I agree, but thats why I say that associating with Samsung for hardware making wouldnt do much.

I do think it would give them a fresh start over there, for if they really did start taking the market seriously and bought some Japanese devs.


I dont think Japaneses will purchase more Xbox because it is manufactured by Samsung. Though, if they were to be manufacture by a Japanese company (like Panasonic) that would surely help, if just for the free publicity.



SvennoJ said:
Xbox live is the cash cow for MS, next to peripherals. The console itself takes years before it starts making a profit.
Does this mean the 720 will be more expensive at the start, or will MS fork the extra difference? Or will we see a much smaller jump in hardware like Nintendo to make it profitable right from the get go?
It would be stupid for Samsung to sell it at base cost and assume all the responsibility.

I would imagine MS would contract the the production to Samsung.

Say it cost Samsung initially 375 to produce, MS would contract to buy them for 425 giving Samsung a profit on sales to Microsoft. Microsoft would them decide on the market price. They could go for a 349.99 introductory price, but MS would lose 75 per, then could sell for 399.99 and take a small loss at first. As the prices on production fall they would redo the contracts, most likely Samsung profit rate would rise, but the cost to MS would fall evenly, like after 2 years it only takes 250 to produce, MS may contract to buy them for 310, upping Samsungs profit per by 10, but still lowering their total cost substantially. At this point they could sell them for around the mass market price of 299.99 while only taking a minor loss.

Anyways I was obviously throwing out numbers, but the process is most likely very similiar to what would happen.



End of 2009 Predictions (Set, January 1st 2009)

Wii- 72 million   3rd Year Peak, better slate of releases

360- 37 million   Should trend down slightly after 3rd year peak

PS3- 29 million  Sales should pick up next year, 3rd year peak and price cut

Would only give me one more reason to buy it.
Samsung is like the best company ever.



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Doesnt sound like a great idea, would make it harder for them to reduce the cost of manufacturing not having direct control over it, possibly having to re negotiate contracts with samsung from time to time to do so. But if they have a close enough relationship it could be win win.



i have a samsung computer monitor. its a nice monitor.



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Seece said:
Icyedge said:
kopstudent89 said:
Icyedge said:
kopstudent89 said:
Are they trying to appeal to Japan?

If they were they would probably make a deal with a japanese company (like panasonic), not a korean one :P.


But Korean products appeal to the Japanese market, unlike American ones. I can imagine Samsung being a huge part of Japan's electronics section. It could be a reason imo 


True but many American product does appeal to the Japanese market too. I dont think that the problem with the 360 in Japan is that its American. If they would associate with a Japanese company this would surely help their image, but with a Korean one I dont think it changes anything.

That's true and false. I think the fact that it's physically American, doesn't matter one jot, but the fact, it is an American console in terms of flavour ... must be offputting for the Japanese.

That's probably a reason they could outsource it to Samsung. Samsung making the console would appeal more to the Japanese moreso than MS. One potential scenario is that they will market it as the "Samsung Netbox" in Japan, another is that they will make two versions. A normal system from Microsfot, and a Japanese-centered one from Samsung. 



IamAwsome said:
Seece said:
Icyedge said:
kopstudent89 said:
Icyedge said:
kopstudent89 said:
Are they trying to appeal to Japan?

If they were they would probably make a deal with a japanese company (like panasonic), not a korean one :P.


But Korean products appeal to the Japanese market, unlike American ones. I can imagine Samsung being a huge part of Japan's electronics section. It could be a reason imo 


True but many American product does appeal to the Japanese market too. I dont think that the problem with the 360 in Japan is that its American. If they would associate with a Japanese company this would surely help their image, but with a Korean one I dont think it changes anything.

That's true and false. I think the fact that it's physically American, doesn't matter one jot, but the fact, it is an American console in terms of flavour ... must be offputting for the Japanese.

That's probably a reason they could outsource it to Samsung. Samsung making the console would appeal more to the Japanese moreso than MS. One potential scenario is that they will market it as the "Samsung Netbox" in Japan, another is that they will make two versions. A normal system from Microsfot, and a Japanese-centered one from Samsung. 

If MS stick with the exact same strategy, I dont think that because its written Samsung on it, the sales will raise significantly. I mean, theres plenty of american company and products that have success in Japan. Its obviously harder with video game since Japan have 2 Japanese's owned companies that are well reputated. Those companies also have plenty of Japanese's owned studios. I too try to purchase "made in Canada" when its possible, thats not xenophoby.



kopstudent89 said:
Icyedge said:
kopstudent89 said:
Are they trying to appeal to Japan?

If they were they would probably make a deal with a japanese company (like panasonic), not a korean one :P.


But Korean products appeal to the Japanese market, unlike American ones. I can imagine Samsung being a huge part of Japan's electronics section. It could be a reason imo 

Korean companies will eventually produce a game machine, and i would hypothesise that it would be Samsung that does it first, but I highly doubt Samsung would waste their time helping someone else, unless they seriously want to put the boot into Sony Japan (like they haven't done this already).

Surface isn't exactly a mass market device, and it probably relies on many lcd components which Samsung manufacture already.



“When we make some new announcement and if there is no positive initial reaction from the market, I try to think of it as a good sign because that can be interpreted as people reacting to something groundbreaking. ...if the employees were always minding themselves to do whatever the market is requiring at any moment, and if they were always focusing on something we can sell right now for the short term, it would be very limiting. We are trying to think outside the box.” - Satoru Iwata - This is why corporate multinationals will never truly understand, or risk doing, what Nintendo does.