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Forums - Gaming - Cost of UHD Blu Ray - Is MS subsidizing Xbone S, or is Sony just milking it?

Everyone was surprised by the 399$ price point.
The 4k Blu-ray drive does nothing for gameing, and if they decided to cut it, to keep prices down thats fair.



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mutantsushi said:
Intrinsic said:

I'm not suggesting that it costs $100. i think the first thing i said in my post was i dount it cost more than $50. But also went onto say that it could veey well cost more than that beig that i also think the consoles domt cost more than $220 to make. 

This is what you wrote, and I was responding to:

Intrinsic said:
But here is the million dollar question....
If the PS4pro was $499 and we all find out that it could have cost $399 if they used a normal BR drive.... what do you think everyone would be saying right now?

Pretty clearly you're positing a $100 difference in cost as result of including higher spec Blu Ray drive.
If you want to establish a basis for that number, great, although consumer retail costs from New Egg are only $20.
Regardless, I could throw out a number that it costs $1000 diffence.  Not particularly helpful, hm?

Discussion about personal relevance of UHD Blu Ray disks or broader consumer interest in that is nice and all,
but establishing the actual cost difference is the start of the conversation of pros/cons of inclusion or not of that feature.
If the con is $1 or no difference in price, that is very different scenario vs. if the difference is $100, no matter how niche the demand for feature is.

Oh i see. My apologies, that $100 differemfe wasn't to suggest that a BR drive cost $100. 

if u look at all else I said, I also said I feel the PS4pro probably cost Sony $420 to make and they selling it at a loss. Now if the 4k BR drive cost $50 to what is currently an ~$18 BR drive we can add o. another $32 to that which will bring the price up to $450. By the time u throw in shipping and stuff and the retailers cut u end up at $499.....

That's what I was getting at.



JRPGfan said:

Ive heard people quote some tear down that estimated the costs of the Xbox One Slim, and the drive there was like 15.5$ more expensive than the normal drive.

I think thats where this idea of it just being a extra 15$ in terms of bills of materials comes from.

Thanks for engaging with the issue here... 
Given that I myself just priced out the difference between BDXL and lower-spec reader on New Egg as $20 consumer retail,
$15.50 seems on the high end of things considering economies of scale and OEM/self-production pricing,
but the $15 figure seems acceptable to use as a baseline, and certainly points out the scale of fallacy re: the $50+ prices tossed around.
If we want to go with that figure, then the question is whether MS is subsidizing Xbone by that amount,
or they are not (i.e. they are passing cost along) and is Sony taking extra $15 on their Slim, above and beyond other profits.
Even with the smaller, more realistic amounts,
this certainly seems significant enough to understanding over-all economics and profitability of the console business for both MS and Sony.



What about neither? Is it not possible that Microsoft is making profit off the slim while Sony fit all they could in the box for $400? A >2x power increase is nothing to sneeze at.



We are not in the PS3/360 generation anymore. I believe they're both selling consoles with a good to decent margin.
Neither Sony or MS are are willing to start a price war and sell consoles at loss.
On one hand they don't want it since Sony is just recovering from their crisis and MS also recived some pressures for the losses of the xbox division some years ago. On the other hand they don't need it, since Sony is already winning by a good margin, and MS doesn't really need to be the top player in the console market anyway.



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aLkaLiNE said:
What about neither? Is it not possible that Microsoft is making profit off the slim while Sony fit all they could in the box for $400? A >2x power increase is nothing to sneeze at.

Brah... The 1:1 comparison is Xbone Slim to PS4 Slim, who were cost equivalent in non-slim form, and are being sold for same price in Slim form.
Only difference being the UHD Blu Ray drive in Xbone Slim (HDR capability also being present in PS4 Slim and OG).
I'm not sneezing at PS4 NEO power increase, I'm trying to objectively address cost issue of UHD Blu Ray rather than using fantasy numbers.
Using the 1:1 comparison of Slim models is exactly to remove extraneous factors which change costs.
But the actual price difference of UHD Blu Ray drive would be the same whether installed in Slim or PS4 Neo, obviously.



aLkaLiNE said:
What about neither? Is it not possible that Microsoft is making profit off the slim while Sony fit all they could in the box for $400? A >2x power increase is nothing to sneeze at.

^ this.

The chip inside the normal PS4 is bigger than the one in the Xbox One.

So MS probably save abit of $ on the cpu+gpu, and choose to include a 4k blu-ray drive as insentive for people to get the weaker console (xbox one slim instead of a stronger PS4).

Sony's new PS4 Pro chip (cpu+gpu) is probably alot more expensive than the normal PS4s, so in order to keep it at 399$, they couldnt afford to include the 4k Blu-ray drive as well if they wanted to hit that price point.



Ganoncrotch said:

The thing is though if that is how much it cost them could Sony be in a spot of saying well... that could push the console into not being profitable at 399... okay so do we charge 449 for it... or $416 to cover the cost? Or.... fuck it, drop the drive and just focus on sheer power and not include it. I'm happy enough with the choice at the end of the day, heck they could do what MS did with the 360!

Given that Sony is making an extra $15 off of PS4 Slim vs. MS Xbone S, it seems unclear why they couldn't "transfer" that $15 to a UHD PS4 Pro budget.
Assuming they really felt that a $415 price would actually affect sales vs. a $399 price point.  Which seems dubious to me.
If that $15 matters so much (and it is proportionately larger for the Slim), why not discount Slim by $15 to achieve price advantage vs. Xbone S?
It seems like a strange assymetry in cost justification one way, but not the other.
 If using lower spec to achieve $15 price benefit in one case (Pro) is justified and optimal, why not in other case (Slim)?
Clearly, the Slim is the product for the more price-sensitive market, not the other way around.



JRPGfan said:

The chip inside the normal PS4 is bigger than the one in the Xbox One.
So MS probably save abit of $ on the cpu+gpu, and choose to include a 4k blu-ray drive as insentive for people to get the weaker console (xbox one slim instead of a stronger PS4).

Sony is also producing around 3x the volume as MS, so should be getting better volume discounts, as well as other economies of scale.
(selling alot more in Japan and Asia means less shipping charges proportionately to MS)
But the consoles are generally cost equivalent, even with equivalent drive units (as with OG, pre S/Slim),
so the question of Blu Ray drive is the differential cost issue, i.e. what distinguishes it from previous prevailing business model.



It doesn't cost $50... It is way less. You can get a $50 BDXL (4k Bluray) Rewriter from amazon... And that is consumer price. A manufacturer price is way less and on top of that, its read only...

https://www.amazon.com/LG-Electronics-Internal-Rewriter-WH14NS40/dp/B007YWMCA8/ref=sr_1_2?ie=UTF8&qid=1473465976&sr=8-2&keywords=BD-XL



                  

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