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    Xbox 360 "Half the Price of PS3" by Late 2006

    Wasn't sure to put this here or in the 360 section. But felt it fit here better.

    Merrill Lynch has released a new breakdown of next generation hardware component costs suggesting that Xbox 360 "could be selling at half the price of PS3 in the latter half of 2006." Full stats breakdown inside...
    ImageThe report puts a positive spin on Microsoft's future with Xbox 360 versus Sony's PS3. It includes estimated breakdown of hardware costs by component and shipping predictions. Particular emphasis on the manufacturing costs of each console has been paid in this report. Some of the highlights include:

    "…The PS3 will not only be significantly more costly than Xbox 360 at launch, but will continue to operate at a cost disadvantage for several years. … We think that the Xbox 360 could be selling at half the price of PS3 in the latter half of 2006."


    "…Our analysis indicates that Microsoft has a significant advantage in terms of cost. Taking Sony's weakened financial condition and Microsoft's deep pockets into consideration, we conclude that Microsoft's Xbox 360 should emerge as the early winner in the next round of the game console wars."

    "Competitive pricing [for Microsoft] could hurt margins for Microsoft in the near term, but we think that Microsoft has the potential to exit 2006 with an installed base of 10 million units, with all that implies for more profitable software sales for 2007."

    The report also states that ATI (GPU provider), Infineon (memory provider) and Marvel (licensed Microsoft to make an MMOG) could all benefit from an early lead on Xbox 360.

    On the cost of goods side, Merrill Lynch believes that the Cell processor will initially cost $160 to make… more than the Xenon CPU which comes in at $100.

    The graphics solutions will also be pricey. Both Nvidia's RSX and ATI's GPU will cost about $100 each. Price reductions over time will eventually get the parts to about $30.

    Blu-Ray is also cited as an expensive solution for PS3. The cost of the drive is estimated to cost at least $75.

    On the RAM side, Microsoft again is expected to have some advantage using GDDR3 given its availability on the open market. PS3's XDR main memory is "not a product that has gained acceptance elsewhere", implying some sort of additional risk or cost.

    On the Hard Drive front, it predicts that PS3 will not have one included standard, but like Microsoft, it will be an add-on.

    The report predicts that Microsoft will break even in year one of the 360's release and that profits will come in year two. The report predicts that 2 million hardware units will be sold in 2005 with 7 million shipping in 2006.

    A lot of the predictions made are based upon the assumption that Sony will not take a significant loss on the hardware (which it believes to be the case given Sony's recent financial pressures). If Sony is willing to be aggressive on pricing with PS3, the report conceeds that many of these numbers are likely to change.

    Costs By Hardware See link for this
    So does this mean the 360 is way over priced as of now?

    Source: http://www.next-gen.biz/index.php?op...=1497&Itemid=2

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    That's why I hate when people don't post the full thread. Sorry.

  4. #4
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    "…The PS3 will not only be significantly more costly than Xbox 360 at launch, but will continue to operate at a cost disadvantage for several years. … We think that the Xbox 360 could be selling at half the price of PS3 in the latter half of 2006."
    Oh, so Microsoft has decided that the PS3 won't launch in 2007 anymore? Man, Microsoft is the new Kutaragi I tell you.

    On the RAM side, Microsoft again is expected to have some advantage using GDDR3 given its availability on the open market. PS3's XDR main memory is "not a product that has gained acceptance elsewhere", implying some sort of additional risk or cost
    Oh, so the new, better RAM is actually worse because of less "acceptance elswehere"? The PS3 has GDDR3 as well as XDR, 256MB of each (dev kits have 512MB XDR and 256MB GDDR3), and XDR can handle 4x the amount of operations at a slightly slower speed than GDDR3, so what's exactly wrong with it?

    On the cost of goods side, Merrill Lynch believes that the Cell processor will initially cost $160 to make… more than the Xenon CPU which comes in at $100.
    Sony, IBM, and Toshiba are all mass-manufacturing the Cell processors, and the PS3 isn't the first device on the market to include a Cell chip, so who's to say that it won't drop in price much faster than the Xenon, which (as far as I know) is only being used in the Xbox 360?

    All in all, I would take this with a grain of salt, for many reasons. One being that Microsoft's "deep pockets" aren't going to sacrifice more money to drop the cost of their console unless if absoluely necessary. MS lost billions on the Xbox, they'll do what they can to make money on the 360. My next reason being that Sony is producing many of the peripherals going into the PS3 at their own state-of-the-art factories (mainly for RSX and Cell). Blu-Ray, Bluetooth, Wi-fi, and nearly all of the smaller things are included in Sony's cell phones and computers (with the exceptino of Blu-Ray), so that shouldn't be a concern.

    Wonder what some Xbox 360 fans will make of this article...

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    I can guarantee you that the Xbox360 will not see that significant of a price drop. It would make the PS3 seem like the supreme console. I mean if you walk into a store and see PS3 for 499, and 360 for 299, which one will you think to be more powerful. Also, MS will be selling the 360 at a loss, and I don't think they will drop the price because they need to make some money off the thing. The Xbox console never turned a profit for MS, so this time around, I don't predict any drastic price drops in the 360's near future.



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    Oh, so the new, better RAM is actually worse because of less "acceptance elswehere"? The PS3 has GDDR3 as well as XDR, 256MB of each (dev kits have 512MB XDR and 256MB GDDR3), and XDR can handle 4x the amount of operations at a slightly slower speed than GDDR3, so what's exactly wrong with it?
    XDR RAMBUS is new (only got released earlier this year ) so the deal that Samsung done with Sony might help Samsung (or RAMBUS, dang you leifen cast doubt on my knowledge) get the XDR RAM cheaper very fast.

    Well it's a business proposition that looks obvious from my perspective.
    Big Boss Emblem FTW!

  7. #7
    adamba4e
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    If the Xbox 360 is half the price of the PS3 by late 2006 then the PS3 does not stand a chance. Most people would go with, a $200 Xbox 360 or a $400 PS3.

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    Quote Originally Posted by adamba4e
    If the Xbox 360 is half the price of the PS3 by late 2006 then the PS3 does not stand a chance. Most people would go with, a $200 Xbox 360 or a $400 PS3.
    Agreed. And the 2nd Generation 360 games are going to look sweet too. Plus, if it's true that Sony has no cohesive on-line plan and they will be losing $150+ on each console then...MS might just do better than analysts predict.

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    Quote Originally Posted by adamba4e
    If the Xbox 360 is half the price of the PS3 by late 2006 then the PS3 does not stand a chance. Most people would go with, a $200 Xbox 360 or a $400 PS3.
    I don't think so. I think most people would know. I also don't see M$ making the 360 that cheap in that short of time. I am sure they will lower the price, but not by that much. That is of course, unless they are really ripping off customers right now.

  10. #10
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    like strategy Sega Dreamcast

    Cut half price after 1 or 2 years release <== this will make die a console

    Donating for me is always welcoming . . ., please donate me

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    Maybe its M$ only choice to try to beat or keep up with Sony. Time will tell I guess. I just can't see M$ cutting it by that much in a few months. Thats unless again, they are selling a console that is only worth $200 now for $400 to cover the cost when they do drop it. But who knows.

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    Well, they are upselling the controllers, leaving out Wi-Fi, using digital buttons, charging royally for the hard drive, AND the peripherals are astronomically priced to boot...

    Little cambodian kids make DVD9 players in their sleep nowadays..

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    Quote Originally Posted by The Game
    Maybe its M$ only choice to try to beat or keep up with Sony. Time will tell I guess. I just can't see M$ cutting it by that much in a few months. Thats unless again, they are selling a console that is only worth $200 now for $400 to cover the cost when they do drop it. But who knows.
    Ur Right this is the last choice M$ can take, but if cut price to low it will die same as Sega Dreamcast i think

    And Sony, if PS3 lot of success same wirh old one PS2 Sony will cut price and what happen with M$ Console. Or they make a cut price again.

    This method will die in war

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    Quote Originally Posted by Lefein
    Little cambodian kids make DVD9 players in their sleep nowadays..
    OMG, that was pretty funny. I don't mind that MS didn't include WiFi because better technology is coming soon (WiMax) and the old XBOX adapter will still work. The analog button thing was never really utilized effectively IMO and so I won't miss it. $100 bucks for an HDD that costs about $25 to make is incredibly marked-up, but anybody who buys the core system will probably wait for a bigger HDD and so, I don't expect the add-on drive to sell. (I actually think two SKUs was a bad idea myself.) And anyone who gets the Core Package is just cheating themselves IMO.

    I only expect MS to drop the price to take away the PS3s momentum. So, expect a big price-drop at the PS3's launch and then again after Christmas 2006 where I expect it'll stay at $250-$300 for a while. The Core might sell for $150-$200 though, which would be pretty tempting.

  15. #15
    Blackeye
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    Quote Originally Posted by mintrieri
    Quote Originally Posted by Lefein
    Little cambodian kids make DVD9 players in their sleep nowadays..
    OMG, that was pretty funny. I don't mind that MS didn't include WiFi because better technology is coming soon (WiMax) and the old XBOX adapter will still work. The analog button thing was never really utilized effectively IMO and so I won't miss it. $100 bucks for an HDD that costs about $25 to make is incredibly marked-up, but anybody who buys the core system will probably wait for a bigger HDD. (I actually thing two SKUs was a bad idea myself.) And anyone who gets the Core Package is just cheating themselves IMO.
    Yeah, the only people I could imagine buying the core package would be the people buying a 360 just to play one or two exclusive games.

  16. #16
    boxgone3
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    Quote Originally Posted by Gturismo1
    I can guarantee you that the Xbox360 will not see that significant of a price drop. It would make the PS3 seem like the supreme console. I mean if you walk into a store and see PS3 for 499, and 360 for 299, which one will you think to be more powerful. Also, MS will be selling the 360 at a loss, and I don't think they will drop the price because they need to make some money off the thing. The Xbox console never turned a profit for MS, so this time around, I don't predict any drastic price drops in the 360's near future.
    In a adult's mind that is lame,while in a child mind that sure is true.If your smart enough to judge somthing on your own then u wouldn't declare somthing more superior just because its is price lower.After all everyone knows that PS3 and the xbox360 are both next gen and not everyone is rich so if truely the xbox 360 is half price by the time ps3 is out then surely I will own one.

    Also by the time ps3 is out Ms will probly tap more into xbox's 360 true protienal(it might look equal to the ps3 for a while).They can show demo's to little kids and say that its cheapper and better(With your logic that would work perfectly ).

    Ps3 will also sell at a loss,it's not the system sony is hoping to make money off of but I think it's probly blu-ray.Ms only use xbox as a way of getting into the industrie,they got tons of money to pull that off with out worring about the losses.

    Don't double post again. 50 points removed! ~Damnit

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    Quote Originally Posted by adamba4e
    If the Xbox 360 is half the price of the PS3 by late 2006 then the PS3 does not stand a chance. Most people would go with, a $200 Xbox 360 or a $400 PS3.

    Not exactly. Let me give you an example if you are going to buy a car and you walk into a show room and you see two cars one is a Toyota camry and another is a Lexus GS 300 which one would you think would perform better, the Toyota Camry or the Lexus GS 300. Of course you would say the lexus GS 300 will perform better. So with better performance comes a higher price. That the way it is. So people naturally know that a product that has a higher price than another must perform better than the cheaper product. So Microsoft's xbox360 having a cheaper price than Sony PS3 is not a good thing. People will think that microsoft product is inferior to Sony's Product, which in this case it's true.


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    Quote Originally Posted by Nstriker20
    People will think that microsoft product is inferior to Sony's Product, which in this case it's true.
    And most people already believe this with M$ other mainstream thing, a little OS called Windows.

  19. #19
    adamba4e
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    Quote Originally Posted by Nstriker20
    Quote Originally Posted by adamba4e
    If the Xbox 360 is half the price of the PS3 by late 2006 then the PS3 does not stand a chance. Most people would go with, a $200 Xbox 360 or a $400 PS3.

    Not exactly. Let me give you an example if you are going to buy a car and you walk into a show room and you see two cars one is a Toyota camry and another is a Lexus GS 300 which one would you think would perform better, the Toyota Camry or the Lexus GS 300. Of course you would say the lexus GS 300 will perform better. So with better performance comes a higher price. That the way it is. So people naturally know that a product that has a higher price than another must perform better than the cheaper product. So Microsoft's xbox360 having a cheaper price than Sony PS3 is not a good thing. People will think that microsoft product is inferior to Sony's Product, which in this case it's true.
    Buying a car is not even close to the same situation as buying a console.

  20. #20
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    Quote Originally Posted by adamba4e
    Quote Originally Posted by Nstriker20
    Quote Originally Posted by adamba4e
    If the Xbox 360 is half the price of the PS3 by late 2006 then the PS3 does not stand a chance. Most people would go with, a $200 Xbox 360 or a $400 PS3.

    Not exactly. Let me give you an example if you are going to buy a car and you walk into a show room and you see two cars one is a Toyota camry and another is a Lexus GS 300 which one would you think would perform better, the Toyota Camry or the Lexus GS 300. Of course you would say the lexus GS 300 will perform better. So with better performance comes a higher price. That the way it is. So people naturally know that a product that has a higher price than another must perform better than the cheaper product. So Microsoft's xbox360 having a cheaper price than Sony PS3 is not a good thing. People will think that microsoft product is inferior to Sony's Product, which in this case it's true.
    Buying a car is not even the same situation as buying a console.
    But the logic is still the same. Its "You get what you pay for" People also like to buy the newest of the new. This is why the 360 will sell this holiday season. Its the newest (although some argue next gen) next gen system out there. So it will sell. But when PS3 comes out, it will suffer in sales. Though I don't think it will be another Dreamcast. Now you could say the same will happen with the PS3 when the N Rev comes out. But that is a whole other ball game. But again, even that could happen.

  21. #21
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    Quote Originally Posted by boxgone3
    In a adult's mind that is lame,while in a child mind that sure is true.If your smart enough to judge somthing on your own then u wouldn't declare somthing more superior just because its is price lower.After all everyone knows that PS3 and the xbox360 are both next gen and not everyone is rich so if truely the xbox 360 is half price by the time ps3 is out then surely I will own one.
    You see, what your problem is, is that you assume everybody who will buy the PS3 or 360 is an super-educated consumer. Which is far from what will happen. Your average consumer isn't going to take the time to research, compared die sizes, nm processes, bus speeds, etc. They see two items, one cost more, well it must be better. Even the average consumer does the same thing. You say its how children think? Look at the Cell Phone market, you can get a great Nokia phone for a lower price, than an overpriced, overhyped Motorola. But which one sells more? The Motorola, because it is more expensive and people "percieve" it to be better. It has nothing to do with how children think, it has everything to do with the average consumer.

    I know it is hard for us to understand these things because we are the select few you actually spend the time researching and getting a large share of background knowledge into these products. But I am sad to say my friend, that our breed is few and far between. Most consumers go for the shiny, new, gimmicky things, and usually percieve higher priced as higher quality, and it is most times not the case.

    Also by the time ps3 is out Ms will probly tap more into xbox's 360 true protienal(it might look equal to the ps3 for a while).They can show demo's to little kids and say that its cheapper and better(With your logic that would work perfectly ).
    Of course they will tap more into the abilities of the 360 by the time PS3 comes around. But MS better do it quickly because if the launch titles for the PS3 look anything like the "tapped out" games on the 360, I can assure you MS will be between a rock and a hard place when it comes to claiming graphical superiority. Thats why they're lucky to have Live to fall back on.


    Ps3 will also sell at a loss,it's not the system sony is hoping to make money off of but I think it's probly blu-ray.Ms only use xbox as a way of getting into the industrie,they got tons of money to pull that off with out worring about the losses.
    What, and you think Microsoft is going to be rolling in profits of the sales of the 360? I'm sorry to tell you, but both consoles are going to be sold at a loss. And for a reality check, in the last generation, Sony was the company that actually turned a profit of the sales of their hardware. Microsoft never profited a penny of sales of the Xbox. Believe, Sony is smarter than people give them credit for. I mean they know they will sell them at a loss now, but in the future, because they manufacturer most of the PS3 in-house, they will be able to profit both off console sales, and game sales. I think it is a horrible business model that Microsoft can throw money away like they do, and pretend like that was their plan all along. It just doesn't make sense, and I guarantee you, if 360 doesn't live up to expectations, you can be assured the investors will intervene. I mean they are only going to allow so much money to be spent to try and gain ground in the Console Market.



  22. #22
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    A massive price drop could also be seen as a admission of failure. When DC cut its prices not much happened, same with Gamecube. It appears that demand for these things is rather inflexible, so a 25-33% price cut may net you like 20-30% more units, but not enough to change the game.

  23. #23
    Aleman
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    Quote Originally Posted by Hypx
    A massive price drop could also be seen as a admission of failure.
    Only to a fanboy. Take an economics class. Price competition is a basis of capitalism.

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    Quote Originally Posted by Lefein
    http://www.ps3forums.com/viewtopic.php?t=8652

    Already posted, dude.
    yeah this just a system war.

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    Quote Originally Posted by Aleman
    Quote Originally Posted by Hypx
    A massive price drop could also be seen as a admission of failure.
    Only to a fanboy. Take an economics class. Price competition is a basis of capitalism.
    How does that make him a fanboy? It could very well be true. Look at the Gamecube. Nintendo but its cost to compete with the Xbox and PS2. It had to in order to compete. In away its a sign of failure, although least the Cube made its money back.

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