Does that include returned/failed units
18$ is approx 5% of the manufacturing cost, therefore only 1 in 20 units needs to have a problem and then they start losing money.(again)
Blue Light of Death anyone.........
According to a teardown report from analyst IHS, Sony is making just $18 on each Playstation 4. This may not sound like much, but it marks a massive improvement from the days in which the Japanese firm made huge losses on the sale of games consoles. According to the report, each Playstation 4 costs Sony about $381 to …
The failure rate is likely well below 1 in 20, despite what the over reacting over hyping media might tell you.
But if they are manufacturing defects and the defect rate is above what Foxconn have committed to then it's not Sony who will be footing the bill.
About 1 in 800 is the current rate, which is well within normal for this sorta technology. Microsoft won't get anywhere close to that with theirs and Flex's track record.
Microsoft will be profitable right away, only because the Xbox One is stuffed fully of cheap low-spec components, and yet comes at a premium price. Not sure how this benefits gamers dumb enough to buy into the XBone thou.,
I assume they consider the money they make over the lifetime of the unit, i.e. game purchases, PSN subscriptions, DLC, multiplayer (which apparently they charge for now), cloud gaming, video rental, music streaming, kickback from the likes of Netflix / Amazon / Hulu, any advertising revenue they derive etc.
"What about about shipping the units, storing them, and the margins the retailers will be demanding.
And then not forgetting taxes (VAT etc), any import duties and so on."
All of which were covered in the article. And the title of the article. And history. It's all about the GAMES.
And, seemingly the accessories, e.g. the controller, which costs half of what it sells for. Judging by the fact the PS3 controller STILL cost £40 6 years after the release of the PS3, that alone is a tidy earner for Sony.
381 to build but what about their fixed costs like IP acquisition, engineering, factory overheads, logistics, Admin costs... it's nice to know that they're making $18 when you just look at parts and labor but I think they're losing a good chunk when you factor in everything else...
The analysis pulls figures from out of thin air, and clearly the price of the AMD APU, at $100, is tantamount to saying "we don't know". In addition how is it "three times as big" as any other 28nm chip? It's far smaller than high end 28nm GPU dies for a start. So they've pulled yield figures out of their rears as well, without noting that the APU has redundancy built in - 20 CUs instead of 18, for example. Yield will be higher than the 66% they are saying: The process is mature. It's well known. And the die has redundancy.
The $88 price for the GDDR5 memory is probably realistic (although Sony's individual deals with the memory manufacturer aren't known), but the price will drop over time, as will the price for the APU.
It doesn't matter how much it costs AMD to make the chips, what matters is how much they are selling them to Sony for (have you looked at the retail price of Intel CPU's?). Despite your rantings the GPU in these devices is reasonably good, which is the important factor for a games machine. Sony could have either bought an Intel device, and limited themselves with Intel's sub-par integrated GPUs, or bought discrete GPUs from AMD or nVidia, which would have significantly increased the BoM costs.
The jaguar is a compromise, decent GPU performance and reasonably quick CPU cores, in a single package and at a price that makes the console economical to build. The $100 price is an estimate based on the prices that IHS can get. Sony probably got a better deal than that, but not by a huge amount.
But then again they might be making $100 per unit depending on economies of scale etc. Only Sony will know.
@ Joerg - just because it's on the internet doesn't make it true. Your post looks like a 'gasm of pointless noise to me.
Finally... "We're looking to be break even or low margin at worst on [Xbox One] and then make money selling additional games, the Xbox Live service and other capabilities on top," he said.
Hi Microsoft ... not from me you won't.
>>You Sony employees are beyond pathetic.
You are doing damage control in a real mafia way to avoid people from knowing the truth about your scam frauds.<<
You Microsoft employees are beyond pathetic.
You are doing propaganda control in a real conspiracy theories way to distract people from knowing the truth and inventing scam frauds when in fact its just a fuck up!
To accuse someone who disagrees with you as working for Sony, as only your opinion can be right and everyone else is ‘in on it’ is just ridiculous
S̶o̶n̶y̶ ̶U̶K̶ ̶M̶a̶r̶k̶e̶t̶i̶n̶g̶ ̶d̶e̶p̶a̶r̶t̶m̶e̶n̶t̶… uh, um random person…
These breakdowns make a lot of assumptions, but they are usually the most accurate costings that are publicly available. Some of the parts will be very accurate (i.e. RAM), while others will be guesses (i.e. CPU based on typical cost of a large, high performance GPU using TSMC or similar).
Don't forget that over the lifetime of the console there are likely to be multiple revisions and at least one major component shrink that will reduce the costs further and there are typically discount points for most of the components when they hit various (large) volume numbers.
That's what I thought - $18 markup on the console seems like a pretty good deal but 3 x the price for the controller and you only get one ! Let's face it, pretty much everyone except the loneliest bastard in the world is going to want two controllers at least (if only to swap out when the battery dies mid-game) so the profit immediately jumps to more like $50 per unit sold in reality.
Rassweiler told ATD that the AMD chip was the largest processor his firm had ever seen, at a size of 350mm2. "This chip is just gigantic,” Rassweiler continued. “It’s almost three times as big as the next biggest chip we’ve seen.”
I bet he tells his Mrs that his gentleman sausage is 6" too
350mm2 is not huge
350mm2 is not even large
3 times as big as the next biggest we've seen? Not seen many chips then
A Tukwila is twice that and I though it was dwarfed by some some GPUs.
It may cost Sony $381 to manufacture the games console but they don't sell direct to the public, that $399 is the retail price for the stored to sell at, not Sony and any profit does not go back to Sony.
Sony manufactures the console, they then sell it to an official wholesaler, the official wholesaler then sells it to the retailer who then sells it at $399. Sony gets paid by the wholesaler, not the retail outlet and not the customer. Now considering the retail outlet needs to recoup shipping costs, as well as turn a profit they would not buy these consoles from the wholesaler at $399 per unit. The wholesaler also needs to recover costs and make a profit while selling it at a price the retailer can cover costs and make a profit.
That $18 difference between manufacture and sale price is not going to cover the retailer's, the wholesaler's and Sony's costs while making all three of them a profit. Someone has to make a loss and its not going to be the retailer or the wholesaler
Firstly there's no way that AMD could even make an FX for $0.30, never mind sell them for that.
Secondly FX's don't have integrated GPUs, which make them much smaller chips and much cheaper to make.
Thirdly custom parts are always more expensive than off-the-shelf.
Fourthly the speed of the CPU isn't relevant here, nor are the number of controllers. This is for a gaming box and is going to be limited by the GPU most of the time and has zero need for expansion.
So retailers are selling the console for the glory and taking no cut at all are they?
Why even bother with these stories when the are clearly fabricated by arsehats trying to justify their utterly pointless bullshit analyst jobs?
A GCSE first year business studies student would be able to pull this utter crap to pieces with no knowledge of tech manufacturing.
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