Thats what I was thinking, seperately they charge huge inflated tags for them.

Only if you interpret them wrong. They are purely a BOM estimate and don't attempt to cover things like R&D, transport, retailer margins. People seeing a BOM estimate of $388 for the ps4 and saying it's profitable for Sony are misunderstanding it, but that doesn't make the BOM wrong, just that is not what they think it is. things like processor cost are worked out based on the going rate for tsmc 28nm wafers (a known cost) and the die area of the gpu/cpu (a known size). Things like ram costs, hdd and blu-ray drives are also known (yes we don't know the contract details, but these parts are super low margin anyway and no matter what Sony or ms buying power is, they aren't going to sell them below cost). So the BOM cost is a reasonable measure of how expensive the materials alone are.

What is apparent is that the ddr3 vs gddr5 tradeoff hasn't saved them a lot of money. $18 all up, which is removed due to the higher other costs, most likely due to the physically larger mobo, casing and higher small component count. They will probably benefit more from die shrinks than Sony however, though with ddr4 coming soon, ddr3 costs may start to rise in the future (they've gone up ~25% this year). Will be interesting to see what happens.

How so? Retailers make next to nothing on hardware, so they have to have some type of margin.

holy crap, really!?

so there's a good chance that since its becoming outdated, ddr3 ram may continue to increase in cost do to being legacy produced.

if true that's a bad break for microsoft, because it would seem gddr5 will decrease in cost as it gains more market share, and ddr3 will increase in cost due to it being a legacy product.

that may have a long lasting impact on the cost of both systems.

hopefully it doesnt continue to go up.

Wasnt he one of the sources used as evidence against the negative rumors?

Ehh, I hate the weaker direction MS went in hardware but there's way too much  jumping to conclusions in this thread.

In the end you could argue MS built a console that average joe will never notice a graphical dfference to PS4 in, all for a cheaper cost.

The ESRAM was to allow the use of DDR3. DDR3 is MASSIVELY cheaper than GDDR5 in PS4, which is why this teardown is baloney. GDDR5 is over twice as expensive as DDR3, where this teardown shows them costing almost the exact same! Absolutely ridiculous to anybody with a cursory knowledge of computer hardware.

The difference is MS is profiting handsomely per Xbox sold, while sony is losing money, according to their own statement.

Just look at each company's profit statements for the past decade. MS is good at making money, Sony is good at losing it. PS4 and XB1 are no exception.

MS just is pricing XB1 high "because they can". If sales fall, they can rip out Kinect and sell it for 299 easily. It's a DDR3 based console, it's cheap.

Believe me, The XB1 is set up great. The ESRAM will shrink nicely, where GDDR5 will cost vastly more than DDR3 forever. Whether MS will pass those savings along to consumers, or just chose to roll in even more money for Bill Gates swimming pool of cash, is another matter.

Adding retailer margin and the small distribution costs, I would say a small loss. Esp for Sony as $382 is mighty close to the RRP. Of course US price is cheapest in the world, so in every other market (given distribution costs are tiny regardless of destination) they will probably be making a small profit. So it's not the selling of other stuff that's making them money, it's the rest of the world subsidising the US market.

NZRRP for PS4 is $648 - 15% tax = $563 = US$461. Take off $10 for sundries and $20 for retailer margin and we have Sony receiving perhaps $430 from customers here for a box that costs them $382 to make. Not a bad margin. 99% confident that they aren't making a loss out of NZ customers on hardware.

Xb one is $748 - 15% tax = $650 = US$532 take off the same $30 and MS is getting maybe $502 for a box that's costing them $471 to make. Not quite as big a margin as Sony, but still pretty good. Also 99% confident that MS isn't making a hardware loss out of NZ customers.

Same would apply to Aussie I would think.

Nope, GDDR5 is vastly more expensive than DDR3 and the gap will actually grow in the future.

How much is being mass produced is not really a valid way of looking at it. You can manufactore one shoe and one million ipod, each ipods will still cost more to make than the shoe, fundamentally. It's the same, GDDR5 will always cost more to make than DDR3. Additionally, there will always be vastly more DDR3 produced, even as they both wind down (GDDR5 will be replaced by on-die stacked RAM soon)

Lets say 100 million DDR3 chips are produced now against 5 million GDDR5. In 5 years, it might be 50 million DDR3 against 2.5m GDDR5. Both have decreased 50%, but GDDR5 will always be proportionatly lower at any point. GDDR5 is simply more difficult to manufactor, that's why it's faster/more expensive.

Anyways, if "Old" RAM was a major cost barrier, PS3 and 360 would be extremely expensive as GDDR3 and (even worse) XDR were out of date many years ago. Yet those RAM are still able to be produced cheaply today.

A couple of years ago I paid $180 for my 32Gb of Ram.
Today it's $540 for the same kits.

DDR3 will continue to get more expensive as production continues to decline. - Where-as the demand won't decline at the same rate.
We saw the same thing occur with EDO Ram, SD Ram, DDR Ram and DDR2 Ram, granted when DDR3 was cheap it was the cheapest point PC ram ever hit as production exceeded demand greatly.

Sony's GDDR5 will have the advantage of scales of economies as time goes on as nVidia and AMD are yet to use the memory technology exclusively in the GPU's that move the most volume. (I.E. The lowest-end parts.)
Not to mention the rumour mill buzzing about AMD using the technology in it's APU's.
The high-end parts that use higher density chips will move over to GDDR6 or Stacked memories in the next year or two so Sony should have more higher density chips at it's disposal to bargain lower prices with. - Last thing manufacturers want is Ram sitting in a factory somewhere.

i have a feeling you have no idea what you are talking about.

from everyone else that knows about tech, and bill of materials. gddr5 and ddr3 cost difference isnt that much at this time, a few years ago, gddr5 cost significantly more, now its small. and it seems ddr3 is getting more expensive (25% increase in last year alone), and it appears to keep going up in price, while gddr5 is going down in price.

so yeah, im gonna go with, you have no idea what you are talking about. and your example is utterly ridiculous and retarded.