Starmistkarmic said: This is probably WAY off base, but could Microsoft's profit and Sony's loss be tempered by the home country of each company? If you take exchange rates into consideration, every console MS sells outside the US(especially in the UK where the rate is 2:1) will return to MS corporate far more profit than one sold in the states. The yen, while also down, doesn't seem as hobbled currently as the dollar, so Sony might see less realized profits coming out of Europe despite it's current situation there(exasperated a bit by the hardware costs.) That's one of the advantages to US companies with a weak dollar. Concievably, MS could cut costs in Others(mainly Europe) and still maintain a realized profits advantage over Sony while making a concerted play at undercutting the PS3's momentum in the region. I'm probably wrong, though...dumb thoughts usually form in my mellon whilst bored.

I don't think the country of origin has a big impact because both companies end up getting their console manufactured in Asia .

Where they do get the majority of their sales however should have an impact on their profit.

At this time the European market is a more interesting market for any console maker than the US one due to the falling dollar ( which explains why Nintendo is relatively shipping more consoles there than in the US compared to both market size).

Squilliam said: Jessman said: Does the Wii already run a 45nm? Or is it a completely different architecture?   The Wii has chips that are too small to really be bothered with shrinking. Im not sure but they may still be at 90nm. If im right then their next course of action is to combine CPU+GPU and shrink to 65nm.

 Both are at CMOS 90nm process: http://en.wikipedia.org/wiki/Wii#Technical_specifications   I think that the Wii does not need ANY HW changes--they sell extremely well at 90nm and r bought for fun not specs.

halogamer1989 said: Squilliam said: Jessman said: Does the Wii already run a 45nm? Or is it a completely different architecture?   The Wii has chips that are too small to really be bothered with shrinking. Im not sure but they may still be at 90nm. If im right then their next course of action is to combine CPU+GPU and shrink to 65nm. Both are at CMOS 90nm process: http://en.wikipedia.org/wiki/Wii#Technical_specifications I think that the Wii does not need ANY HW changes--they sell extremely well at 90nm and r bought for fun not specs.

 

If I understand you your saying correctly then I don't think you understand the purpose of these hardware changes. The shrinking of hardware has benefits such as less heat , weight , more power efficieny etc which is great for the consumer but the main reasons why a company would shrink it's hardware is to cut cost's . If Nintendo could make their hardware cheaper then they could increase their profitability or pass the savings on to the consumer ( which I dought they'll do this year).

They'd probably be able to get away with passive cooling once they shrink to 65nm. I don't see any rush though, with the chip sizes and the commodity process they'll do it when it makes sense for them I guess.

One interesting factor is that eventually the PS3 and Xbox360 will be as cheap to make as the Wii could potentially be. It might take until the 32nm generation for the 360 but it is doable. Not sure on the PS3 though...

Cheaper production costs per unit improves the profitability for the company to sell video game consoles. In time more price cuts will result.

Rock_on_2008 said: Cheaper production costs per unit improves the profitability for the company to sell video game consoles. In time more price cuts will result.

Actually theres a correlation between price cuts and cost cutting. Cost cutting however doesn't cause a price cut. Companies only cut the price when it suits their objectives.

 For example, the Wiis cost would have come down since production commenced - R+D, Tooling, Economies of scale, component price reductions. They haven't cut the price.

 

 

When the price below 299$, then it`s all about games.
PS2 was at 299$, and GC started at 199$, But that didn`t helped GC.
The only thing, that sux for PS3, is that 40GB don`t have BC, and 80GB is hard to find(atleast till MGS4 release, but in USA).
I believe, with 80GB model around, they would increase like by 20% in sales in every region..

SlorgNet said: rocketpig said: It unquestionably puts to bed that rumor the Sony was breaking even on the 40GB PS3. It's obvious that they still have a ways to go because both the PS2 and PSP are still offsetting PS3 losses (and at that, still not making it into the black for the games division). Oh, they're breaking even on the 40GB hardware, no question, the reason for the losses is software - the PS2 is selling fine, but software sales have tailed off, while the PSP has only 30 million units, which is a limited market. Sony's studios are gearing up for major releases to come, is all. One of Microsoft's major problems is they don't have the studio network of Sony or Nintendo. Something they need to work on...

If they're breaking even on the 40GB, how do you explain those kind of losses? Because, if you truly believe they're breaking even on the unit, that means they're profiting from the 80GB, which would offset some of those software problems.

Add in that you know they're making money on the PS2 and PSP (especially the strong software for PSP in the last 5 months) and your numbers don't compute. They're either breaking even on everything or profiting... Yet they turn a somewhat significant loss for the quarter. That can't all be chalked up to advertising and overhead, which is at its lowest the first quarter of the year. 

dallas said: crumas2 said: Having the right movies on Blu-ray would definitely help the format, but having the players at $400 and up is a road-block for mass acceptance. I'm waiting for something $200 or less before I move to Blu-ray. Did you read the new edition of Computer Power Users CPU, yet? Howard stringer did an interview for them, and he says that prices should come down to $299 by the end of this year, and could come down to $199 by the end of 2009. So.... things are coming along. Also the prices for the movies are approaching dvds, rather quickly. Sony is investigating cheaper plastics and such to use for the dvds.

I hope they don't abandon the polycarbonate layer that makes the discs virtually scratchproof.  That is a heck of a feature. 

rocketpig, take a look at PS3 sales last year. Notice all of those expensive 60GB PS3s they hard a hard time selling? Those loses clearly lean towards the beginning of last year, and we have no idea what Sony's profit (loss) margin is on the PS3 per unit. I also believe that they are still losing money, probably $100 per 40GB sold, but neither of us really knows dick about how Sony runs their business. For all we know they really could be breaking even by now.