# What Do You Think Will Happen To The PS3?



## OnyxVulpine (Aug 1, 2007)

http://www.next-gen.biz/index.php?option=com_content&task=view&id=6616&Itemid=2



> A new suit filed against Sony Corp. of America says the PS3â€™s Cell processor infringes on an existing patent, and demands the â€œimpounding and destructionâ€ of all of Sonyâ€™s infringing processors.



I learned of this today.


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## Silver R. Wolfe (Aug 1, 2007)

Nothing will happen to the PS3 based off of this lawsuit.  The people who issued that patent are just trying to find some way to cash in on it before it expires (which it does soon).

The patent would also affect several other bits of technology that have been in use for several years, particularly by IBM, yet these people aren't included in the lawsuit.  The company is trying to go after Sony and hope that they'll get some sort of settlement.


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## chronoteeth (Aug 1, 2007)

It'll be fine.


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## Janglur (Aug 1, 2007)

Uhm.. not a damn thing?

Or rather, I should say..
The PS3 is ghosting just because of it's biblical plague of launch failures, poor sales, and exhorbant production price.


But this lawsuit won't do squat.  Because, you see, /Sony didn't make the cell processor/.  Baha!
IBM did most of the work.  Sony only provided the construction facilities and post-prototype R&D.


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## TheGru (Aug 1, 2007)

Oh this is rich. :3


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## Silver R. Wolfe (Aug 1, 2007)

Janglur said:
			
		

> Uhm.. not a damn thing?
> 
> Or rather, I should say..
> The PS3 is ghosting just because of it's biblical plague of poor sales, and exhorbant production price.
> ...



Fixed it for ya, the PS3 failure rate is very low and always has been.  Also, Toshiba was involved with the CELL as well. 

Edit:  More info about the suing company:

Publication: Business Wire
Date: Thursday, May 3 2007
Subject: High technology industry

NEWPORT BEACH, Calif. -- Acacia Research Corporation (Nasdaq:ACTG)(Nasdaq:CBMX) announced today that Acacia Patent Acquisition Corporation, a wholly owned subsidiary that is part of the Acacia Technologies group, a leader in technology licensing, has acquired rights to a patent relating to parallel processors with shared memory.

This means that Acacia created this PPC company strictly for the purposes of trying to collect on this patent.


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## sgolem (Aug 1, 2007)

Also, there's the fact that lawsuits like this happen all the time, and 95% of the time, nothing comes from it.  

One exception was the vibration in the ps2 controllers, but I imagine there's quite a stretch getting them to taking that out, as opposed to the processor that runs the actual console.


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## Tarrock (Aug 1, 2007)

i saw this earlier today.

I think sony will just pay off the guys. you hear these things all the time and it ends with the person with the patent getting payed off.

Think sony also got sued for the rumble feature in the ps2's controller.


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## Wolf-Bone (Aug 1, 2007)

I think the family of whoever invented plastic should sue Sony for making their controllers out of it. It makes about as much sense.


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## Bokracroc (Aug 1, 2007)

lawl _I forgot the term of the practice of patenting ideas for the chance to sue someone that comes along and actually makes something of that idea_


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## Janglur (Aug 1, 2007)

Silver R. Wolfe said:
			
		

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Low failure rate?  That's a complete lie.

Having worked at target, I can confirm they had an enormous failure rate.  150,000 total units returned so far, and counting.  (That's not target specifically, but of all the PS3s)  This is a much higher fail rate than Wii or X360.  Only the last generation experienced such a high fail rate.  (Pretty much all of them, except the gamecube.  Xbox and PS2 both had failure issues.  Especially PS2.)


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## Foxstar (Aug 1, 2007)

The PS3 has a failure rate, it's just very small compared to the 360's, but nowhere near the rate of the PS2's.
Nothing will happen, at best, Acacia gets a few million.


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## net-cat (Aug 1, 2007)

Okay, if I'm understanding the brief synopsis of the patent, they basically have a patent on using multiple processors in one system? Um. Wow. Surely they can't find some prior art to that? It's not like parallel processing was invented in 1991...

I don't think anything will come of it. Maybe an out of court settlement at the worst. (Besides, shouldn't it be IBM and Toshiba that they're going after for the Cell? I would imagine that they're not because IBM is known to defend itself against bullshit lawsuits. Heck, Intel and AMD have dual core processors with shared cache and address space.)


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## Brooklyn (Aug 1, 2007)

It's just a patent troll. Happens all the time. PS3 isn't going anywhere.


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## ADF (Aug 1, 2007)

It seems these days companies can make good business by simply copyrighting anything they can find and looking for people to sue over it.

Seriously, everyone is suing everyone over some stupid patent these days.


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## themocaw (Aug 1, 2007)

Brooklyn said:
			
		

> It's just a patent troll. Happens all the time. PS3 isn't going anywhere *it wasn't already going*.



Fixed.


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## Janglur (Aug 1, 2007)

11,706,000 Xbox 360's currently sold.
9,280,000 Wii's.
3,930,000 PS3's.


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## ADF (Aug 1, 2007)

Fanboys and their console wars <.=.<

Makes me glad I am a PC user and don't have to put up with that crap, constantly having to justify my particular purchase to people who want to trample all over it and boast about their brand name superiority...

Learn a lesson from us and be glad you actually have competition, 8800 prices are horrible because ATI failed to compete this gen. If it wasn't for those competitor consoles you loath so much, your console wouldn't be half as good and would be a butt load more expensive.


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## Silver R. Wolfe (Aug 1, 2007)

Janglur said:
			
		

> 11,706,000 Xbox 360's currently sold.
> 9,280,000 Wii's.
> 3,930,000 PS3's.



So each console is doin' well with the Wii selling exceptionally.  If you break it down, the Xbox 360 sold 557,428 per month and the PS3 has sold 436,666 per month since their respective launches with the Wii trouncing both at 1,031,111 per month.


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## Janglur (Aug 1, 2007)

Yeah, thing is, the PS3 is being sold at cost currently.  They're making very little profit.  Once Wii breaks (I think Nintendo said) 11 millon, they'll be in the cruise zone.  Sony hasn't given a projection, but if they're selling at cost they're not getting closer to their goal.

Sony's taking a MASSIVE gamble.  And as much as I despise Sony, I hope that it pays off better than the PSP did.  I think if it was just M$ and Ninnytendo left in the market, things would stagnate horribly.  History shows that a lack of a third competitor results in a video-game recession.

And sadly, noone will ever evict M$.  They've got too much disposable fundage to be pushed out.  They could release an entire generation at below cost and be just fine.  They're more than frighteningly capable of monopolizing the entire VG market just with sheer brute force.


Anyway, rambling.

In terms of sales-per-day, the PS3 is the farthest behind.  Wii and PS3 were released close to each other, while the X360 was released nearly a year ahead of both.  Based on this, the 360 is reaching it's mid-life by now, and it's sales are going to start slacking off.  Especially if no major blockbusters come out for it.  While the Wii has suffered rather bad game releases (in the form of few, far between, and few truly hyped or anticipated ones) and is doing quite well because of it's innovative controller, and cheap cost.  People are a LOT more likely to impulse buy something cheap.  That's what's hurting the PS3 so much.  Gamers tend to be impulse buyers.  Most will say 'I want X' then get Y because it's out, it's stout, and they've got the cash for it now.
Nintendo and M$ know what they're doing.  Nintendo's been doing this longer than anyone.  Sony, i'm not so sure anymore.  They have a long history of failure, after all.  Betamax, and their memory sticks, that PSP format (UMD?), and now it looks like it may be Blu-Ray.
And even Sony can confirm that the largest demographic buying their consoles are doing it only because it's the cheapest Blu-Ray player on the market.  If Blu-Ray falls through, Sony is going to be out billions of dollars.


Sony's perched very precariously right now.  I wouldn't bet on them.


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## Rhainor (Aug 1, 2007)

Janglur said:
			
		

> Yeah, thing is, the PS3 is being sold at cost currently.  They're making very little profit.



At cost?  Nononono.  They're selling at a _loss_.

Last I heard (which wasn't too long ago), each 60GB PS3 costs over $700 to build, and is now selling for only $500.  Normally, that would be offset by profits on the games themselves, but (at least at first) the games -- which cost $60 or 70 to the end consumer -- were selling at or below cost, so there wasn't much, if any, profit there either.  Sony is hemorrhaging money, and it doesn't look like that's gonna stop any time soon.



			
				Janglur said:
			
		

> Sony's perched very precariously right now.  I wouldn't bet on them.



I wouldn't be surprised at them being bought out within 5 years.  If it happens, my money's on Samsung as the purchaser.  (I'm sure Microsoft would *want* to buy Sony, but that would incite a whole slew of antitrust lawsuits)


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## Jake (Aug 1, 2007)

Well, a lot of good games will come out for the PS3, it'll probably get enough profits, although if they bring out a ps4 anytime soon they're just gonna go bankrupt or something, even with all the money they have.


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## Janglur (Aug 1, 2007)

Rhainor said:
			
		

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Plus Samsung is my favorite company.  I never even HEARD about them until I started buying their stuff.  Then quickly realized the stuff was better than the high-end competition.  And soon, everyone did.
My Samsung 971p monitor either has a true 8-bit panel, or dithering WAY above the competition, because it's absolutely beautiful and still <6ms refresh.  No noticeable ghosting whatsoever.  But it doesn't sacrifice quality of image for speed either.  My purchase has influenced 2 other people to buy the same model, both stupendously happy with it.
Plus, their oneNAND is absolutely amazing.  64 GB HDDs that have a 104 MB/s sustained read, 24 MB/s sustained write, and 0.115ms seek time!?  Holy JESUS SHIT!  I must have them!


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## themocaw (Aug 1, 2007)

Janglur said:
			
		

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## RailRide (Aug 1, 2007)

Acacia.

I knew I heard that name before. They're practically the king of patent trolls.

Slam yer eyeballs against this: http://en.wikipedia.org/wiki/Acacia_Technologies

followed by http://en.wikipedia.org/wiki/Patent_troll

---PCJ (not that I have any love for Sony)


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## Lucedo (Aug 1, 2007)

Since the $100 price cut, I believe that this act will attract more sales and some of the gamers would reconsider getting one. I also looked at a couple of upcoming games for the PS3 so I could predict its performance. For the PS3 library, except for Resistance: Fall of Man and maybe MotorStorm, the games are pretty bad in my opinion.


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## Option7 (Aug 1, 2007)

I think people are being too harsh on the PS3. All consoles have pretty bleak release titles, but as time goes on, more come out.

Although I have to admit that the price tag on it is painful.


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## Silver R. Wolfe (Aug 1, 2007)

Lucedo said:
			
		

> Since the $100 price cut, I believe that this act will attract more sales and some of the gamers would reconsider getting one. I also looked at a couple of upcoming games for the PS3 so I could predict its performance. For the PS3 library, except for Resistance: Fall of Man and maybe MotorStorm, the games are pretty bad in my opinion.



The $100 price-cut already sold a lot of consoles, at one point Amazon actually ran out of stock for them.

However, as it stands now, the price-cut is more of a fire sale.  They've stopped production on the 60GB model and once those consoles are gone, they'll be replaced with the more expensive 80GB bundle (it comes with Motorstorm) that'll sell for $599 again.

Though, the box-art released for the 80GB model says it's only a 'Limited Edition' deal, so I assume that once the 60GB model is down and out for good, the 80GB model will lose the included Motorstorm and drop to a reduced price.


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## net-cat (Aug 1, 2007)

If the PS3 is going anywhere, it's into a grave that Sony dug itself.

The PS3 isn't going to "fail" this generation. But the fact that they're basically having to sell them at cost will (hopefully) make them rethink their strategy on the PS4.

That, or I'll see you next generation with the Microsoft PlayStationBox 4.


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## psion (Aug 1, 2007)

ADF said:
			
		

> Fanboys and their console wars <.=.<
> 
> Makes me glad I am a PC user and don't have to put up with that crap, constantly having to justify my particular purchase to people who want to trample all over it and boast about their brand name superiority...
> 
> Learn a lesson from us and be glad you actually have competition, 8800 prices are horrible because ATI failed to compete this gen. If it wasn't for those competitor consoles you loath so much, your console wouldn't be half as good and would be a butt load more expensive.


While I have played with a few of the "next-gen" consoles, I share your opinion on buying PC, playing PC, and living PC.
As for the OP:  This sounds about as flimsy as Jacko Thompson's threat to sue Microsoft over the violence in Gears of War (I think it was) and we all know what came out of THAT.


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## Janglur (Aug 2, 2007)

Option7 said:
			
		

> I think people are being too harsh on the PS3. All consoles have pretty bleak release titles, but as time goes on, more come out.
> 
> Although I have to admit that the price tag on it is painful.



Um, launch is over due.  That was over /seven months/ ago.  We're in the console equivalent of the late 20's.  Before long our kids will start school.  Or something.
But seriously, PS3 had bad launch titles and bad current titles, and bad upcoming titles.  It's just not looking so hot.  One or two good games can't sell a console when the competitions has seven or eight and are half the price.




			
				net-cat said:
			
		

> If the PS3 is going anywhere, it's into a grave that Sony dug itself.
> 
> The PS3 isn't going to "fail" this generation. But the fact that they're basically having to sell them at cost will (hopefully) make them rethink their strategy on the PS4.
> 
> That, or I'll see you next generation with the Microsoft PlayStationBox 4.



I'd name it that just for lols.
Also, the PS4 is questionable.  The head designer of the PS3 quit Sony and intended to release a PS4 himself!  I sadly lost the article.  But technically he invented the PS3 and provided Sony the rights to use it.  So unless there's a legal battle or a sell-out (probable) Sony can't release PS4.  (Although I am SUPER skeptical Sony won't come to some agreement.  Even if Mr. Father of the Playstation doesn't like Sony anymore, he'll sell out.  Sony will make an offer so nice he'll fold faster than superman on laundry day.)


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## Janglur (Aug 2, 2007)

psion said:
			
		

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I agree.  Consoles are a nice aside from games.  Especially nice when you can't use your PC due to virus scan, defrag, or whatever clogging it up.  But most good games are on the PC.  (And a lot are free, too!)
At least, almost all the games I like are on PC and free...


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> Also, the PS4 is questionable.  The head designer of the PS3 quit Sony and intended to release a PS4 himself!  I sadly lost the article.  But technically he invented the PS3 and provided Sony the rights to use it.  So unless there's a legal battle or a sell-out (probable) Sony can't release PS4.  (Although I am SUPER skeptical Sony won't come to some agreement.  Even if Mr. Father of the Playstation doesn't like Sony anymore, he'll sell out.  Sony will make an offer so nice he'll fold faster than superman on laundry day.)



You mean Ken Kutaragi, who was the original father of the PlayStation.  Unfortunately whatever article you had was bollucks.  Sony owns the Playstation brand and name so a PS4 is in no way out of the question unless Sony fails miserably with the PS3 (which I don't think will happen).



			
				Option7 said:
			
		

> The PS3 isn't going to "fail" this generation. But the fact that they're basically having to sell them at cost will (hopefully) make them rethink their strategy on the PS4.



Most consoles are originally sold at cost or at a loss when they're released, it usually takes at least a year or two for manufacturing costs to come down enough to turn a profit.

The companies rely on the software and peripheral sales to break even or to turn a profit (overall) until those manufacturing costs drop.  For example, the original Xbox never turned a profit and only recently this year has Microsoft posted any kind of profit from its gaming division and that is mostly attributed to more successful software sales, XBL subscriptions and DLC.



			
				Janglur said:
			
		

> Um, launch is over due. That was over /seven months/ ago. We're not even a year in the making, so there will be lots of kinks to work out and a bumpy road ahead of us, that's how the industry usually works.
> 
> But seriously, PS3 had bad launch titles and so-so current titles, but great upcoming titles like MGS4, FFXIII, Ratchet & Clank, Infamous, Killzone 2, Loco Roco 2, Rock Band, Guitar Hero 3, CoD4, Warhawk, and Socom. It might not be enough however, $500 - $600 is expensive and when your competitors are priced half as high, you really need a strong hitter.



Fixed it for you.


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## Janglur (Aug 2, 2007)

Silver R. Wolfe said:
			
		

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Okay, sorry, but nerve hit.
The 'always have sold at cost' bullshit is nothing but a lie.

This man said it better than me:
http://www.actsofgord.com/Proclamations/chapter02.html


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

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I never said always, I said usually between at cost or at a loss.  More commonly at a loss, though the Wii has sold at profit since launch and the N64 and Gamecube were both sold at cost at launch or very close to it.


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## Janglur (Aug 2, 2007)

Atari wasn't, NES wasn't, Masterdrive wasn't, SNES wasn't, Genesis wasn't, Playstation wasn't, PS2 wasn't, Gamecube wasn't, 3DO wasn't, Jaguar wasn't, Gameboy wasn't, GBC wasn't, GBA wasn't, GB DS wasn't, Gamegear wasn't...

I'd say that isn't 'usually'


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> Atari wasn't, NES wasn't, Masterdrive wasn't, Genesis wasn't, Playstation wasn't, PS2 wasn't, Gamecube wasn't, 3DO wasn't, Jaguar wasn't...
> 
> I'd say that isn't 'usually'





			
				Silver R. Wolfe said:
			
		

> Most consoles are originally sold at cost or *at a loss*



As in, most aren't sold for profit.  The point I was making was that it was common to not sell a console for a profit so Sony losing $200 per console wasn't something new or rare.


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## Janglur (Aug 2, 2007)

What are you, delusional?

I just made it clear that most consoles (Let' see, only exceptions:  Latter half of Saturn, Dreamcast, Xbox, and PS3.  I'd say that's the MAJORITY) sell for a profit.  Not at cost, not at a loss.

For profit.


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> What are you, delusional?
> 
> I just made it clear that most consoles (Let' see, only exceptions:  Latter half of Saturn, Dreamcast, Xbox, and PS3.  I'd say that's the MAJORITY) sell for a profit.  Not at cost, not at a loss.
> 
> For profit.



And where's your proof of that?  The link you provided me last time had no lists of references.


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## Janglur (Aug 2, 2007)

I linked it already.  Gord explained it perfectly.

Where's yours?


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> I linked it already.  Gord explained it perfectly.
> 
> Where's yours?



One man's blog isn't very convincing.

I'm more convinced with my knowledge of the gaming industry because I have been reading and experiencing it firsthand to go against what this 'Gord' is saying.  If he provided some form of trackable references, I'd be convinced, but he didn't.

And even now, for the past decade and a half (almost), what I said has become the norm.


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## Janglur (Aug 2, 2007)

Uh, he did.
Maybe you should, yanno, read the article?
Visit the links?
*Go to sony's freakin' website and read it written by themselves, and listen to it said in audio format?*

I find it funny your personal opinion is worth more to you than factual evidence, Sony's admission and profit statements, Gord's many years of  pre-NES VG Market experience, and my opinion combined.
That's called 'self-delusion'.
Hey, you wanna beleive that noone's ever sold a console for profit?  GO for it!  You won't be alone.  You just won't be very wealthy in common sense either.

I'll just end this conversation with his quotes:
*"Others want to believe that companies like Sony made the PS2 because they love video games and profit from a console sale goes against everything they believe in.  A number of people are offended at the idea a console manufacturer would make a profit as they've lived the lie of every console is sold below cost for years"*
"It amuses me the amount of email I received from people claiming that I was wrong about the PS2 and profitability.  That somehow I misjudged numbers or was making things up.  After all, mythology never lies."
"Don't blame the messenger if you are angry that I opened your eyes to the economic realities of this market."


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> Uh, he did.
> Maybe you should, yanno, read the article?
> Visit the links?
> *Go to sony's freakin' website and read it written by themselves, and listen to it said in audio format?*
> ...



I read his article and there was one link that was clickable and it resulted in error.

I don't agree with any of those quotes.  Sony made the PS2 at a loss because they believed they could market their product and their software aggressively enough to turn a profit.  You have to spend money to make money after all, every investor knows that.  Sure Sony would love to make profit off their consoles (as would everyone) but to launch a console for the full manufacturing price can be suicide depending on the circumstances.  

When the PS2 came out, for example, DVD players were still the new technology and DVD drives were expensive.  Component prices go down with time, enough so that companies will get a profit off their hardware eventually.  As the manufacturing process for blue laser diodes improved, the price to manufacture Blu Ray drives has decreased, making the combined manufacturing price of the PS3 lower.

It's not about being offended, it's about being economically and financially feasible.  An $850 console would have a much worse chance of selling than a $600 one.


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## Janglur (Aug 2, 2007)

Yes.  After all, you'll make SO much more money by racking up $-10,000,000,000 in debt than you would $20,000,000 in profit.

Seriously, if you honestly beleive Sony, nor any company, has ever turned a profit before?  You're a hopeless cause.


So like I said.  Conversation here is over.


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## Silver R. Wolfe (Aug 2, 2007)

Nikkei Electronics had a story on the estimated PS2 manufacturing cost, however the story no longer exists online.  You can however find the headline for it here:

http://www.teardown.com/PublishedArticles.aspx

Run a find for "PS2 Manufacturing Cost" on the page.  They estimate it was at $440.


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## OnyxVulpine (Aug 2, 2007)

*Opens mouth*
.
..
...
*Closes mouth*
....
*Deep breath*
Looks like I missed a lot since I posted this..
Although I have nothing against the Playstations, I loved the first and second one. But nothing of it has wowed me this generation.
I would actually enjoy seeing the Playstation 3 go down even though as you guys said it wouldn't happen. To me it seems serious but I never looked into these sorts of things and don't know how it works so I can't really have a real say on it.


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## Janglur (Aug 2, 2007)

Silver R. Wolfe said:
			
		

> Nikkei Electronics had a story on the estimated PS2 manufacturing cost, however the story no longer exists online.  You can however find the headline for it here:
> 
> http://www.teardown.com/PublishedArticles.aspx
> 
> Run a find for "PS2 Manufacturing Cost" on the page.  They estimate it was at $440.




So, that means $240 loss per console.  At 50m consoles, that's 12,000,000,000.  Twelve billion dollars.  1/4 of their networth.

Thus, is it my conclusion that based on your 'evidence' you are a retard.
The PS2 was sold at a profit.  Period.


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

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Name calling is not necessary and doesn't strengthen your argument, please behave on the forums.







According to several analysts and estimates, the PS3 is sold at around a $250 loss so it wouldn't be the first time that they did this.


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## Janglur (Aug 2, 2007)

And your point is?

We've already established the PS3 is being sold below cost.  Anyone who argued otherwise hasn't read the news.  Or Sony's website.


But you said the PS2 was being sold below cost.  $240 below cost (based on your invisible article's $440 estimate)


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> And your point is?
> 
> We've already established the PS3 is being sold below cost.  Anyone who argued otherwise hasn't read the news.  Or Sony's website.
> 
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I've established some form of reference.  The PS3 sells for far below cost so it wouldn't surprise me if they didn't sell the PS2 far below cost at launch as well.


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## Janglur (Aug 2, 2007)

Except they DIDN'T.  We've established that too.  See, when Sony admits that it's sold at a profit, and everyone presumed they did, and continue to presume they did, and the industry analysis confirms they did..
It's called 'A fact'.

The first console sold below profit was the latter-half of the Saturn, and the Dreamcast.  This didn't occur again until the Xbox was released and saturated the market via price dumping.  Then their next console reversed this.  Then the PS3 came out, taking the highest hit since the Dreamcast.
The PS1 was sold at profit.  The PS2 was sold very at profit.  The PS3 is sold below cost.

How many times does this have to be said before you'll step out of your fantasy world?  Who do I have to link to?
Do I have to get Mr. Kutaragi or maybe the new Howard Stringer to come tell you personally?

God it annoys the crap out of me when people wander around with their fingers in their ears, trying to deny the existance of the very *WORLD* just to get their way.

Now as i've kept promising myself, _I am done with this conversation.  I don't have time for console-religious fanatics._


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> Except they DIDN'T.  We've established that too.  See, when Sony admits that it's sold at a profit, and everyone presumed they did, and continue to presume they did, and the industry analysis confirms they did..
> It's called 'A fact'.
> 
> The first console sold below profit was the latter-half of the Saturn, and the Dreamcast.  This didn't occur again until the Xbox was released and saturated the market via price dumping.  Then their next console reversed this.  Then the PS3 came out, taking the highest hit since the Dreamcast.
> ...



Yes, give me links; direct me to the information.  I was looking for something to support either your argument or mine last night and if you could finally give me proof as to what the true answer is, I'd greatly appreciate.

I don't want blog links, I want links to valid data.


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## themocaw (Aug 2, 2007)

If I recall, the PS2 was originally sold at a loss, but eventually, as the manufacturing stepped up and tech improved, the loss margin dropped.  However, the majority of Sony's profit on the PS2 came from the licensing the tech to developers.  Remember, every game that is sold for the PS1, 2, or 3, Sony gets a cut.  It's like how Coca-Cola makes it's money: bottling and canning costs are such that they actually make minimal profit on canned and bottled Coke.  Where they make their money is when people buy fountain drinks at restaurants: they make a better profit just selling the syrup.  The bottled and canned market is mostly to help maintain brand loyalty.


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## Rhainor (Aug 2, 2007)

Exactly.  They take a loss on the price of the console and make up for it with their profits on game sales.  Standard Operating Procedure for almost every videogame system maker in history.


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## Janglur (Aug 2, 2007)

That man's _site_ had links, and explained it.  Again, stop denying stuff just for your own position.

Humoring you:
http://www.scei.co.jp/corporate/data/bizdataps2_e.html  Unit production.  Notice there's a lot more made, than sold.  If they were taking such a huge loss how could they afford to exceed demand?  WHERE IS THE PROFIT COMING FROM?
http://www.engadget.com/2007/07/26/sony-profits-soar-despite-ps3-losses-ps2-hot-as-ever/  Article discussing how their profit has doubled despite PS3 losses, solely as a result of PS2 sales.  If they were selling PS2s at a loss how the hell could PS2s make a profit?  LOGIC, MY FRIEND.  USE IT.
http://news.yahoo.com/s/afp/20070726/bs_afp/japanelectronics  Another of the same.
http://www.forbes.com/home/feeds/afx/2005/10/27/afx2302512.html   Takao Yuhara stating the PS2 was doing very well.
http://kotaku.com/gaming/silver/silver-ps2-announced-211100.php  Another article stating their sales, and announcing the $130 super-cheap PS2.  If they were already selling at $240 loss, MSRP less than half the production cost, why would they even think about dropping it another $70?!
http://www.sony.net/SonyInfo/IR/financial/fr/2004-7-28/pdf/sony20040728.pdf  Sony's consolidated fiscal report.
* http://www.red-mercury.com/mmceo/mmceo_current.html   States only Xbox is sold below cost.  *
* http://money.cnn.com/2007/03/08/technology/personaltech/harrison/index.htm  States Sony is not losing money on the $130 PS2.  That means production costs are below $130. *

Finally, Sony's 2000 Q4 report stated the estimate of $175,000,000 if they sold 1 million PS2 units, including peripherals and games.  Extrapolate that (as most of it is from games, and some from peripherals) and you get ~$20-$50 per console.  If they were selling at break-even for hardware, that would mean the average gamer buys enough to net $175 of profit.  Assuming a controller costs $25 in stores and $5 to make, and we double the industry's standard estimate of 1.4 controllers per system, that makes $8 per gamer spent on controllers.  Now, Sony has stated they make $4 for third party and $6 for second party in liscensing fees, and if we assume that 1/3 of all the games we buy are first-party sony titles at $50 each, and 2nd and third are also 1/3 of all games bought..  we'll assume for simplicity's sake they have $0 total-free production cost for their games, and pocket every penny.. plus the controllers' $20/ea profit...

The average gamer purchases a PS2 for $199, then EVERY THREE MONTHS buys $525 in games and peripherals.  That's pretty hard to beleive.  And this is just how much would be required to realistically support Sony's financial figures, if they sold AT COST.  If they sold BELOW cost, that would make gamers have to buy even more games and peripherals.  And I severely doubt the average gamer buys ~11 games every 3 months.  That's a lot of freaking money.
Now do you see why your opinion isn't matching up with the facts, logic, or credible sources?

So, how many of you purchase around 3 games a month for your PS2 alone?  Or ever have?
'Cuz unless a WHOLE LOT of people can, honestly, answer 'me', then math has declared you wrong.



Edit:  Plus I just sent an email to Sony America asking for a direct quote.  We'll see if they reply.  Doubt it though.
Edit2:  Added more links.  Bolded.


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> That man's _site_ had links, and explained it.  Again, stop denying stuff just for your own position.
> 
> Humoring you:
> http://www.scei.co.jp/corporate/data/bizdataps2_e.html  Unit production.  Notice there's a lot more made, than sold.  If they were taking such a huge loss how could they afford to exceed demand?  WHERE IS THE PROFIT COMING FROM?
> ...



Thanks for that wealth of links.  I think you missed the entire point I was trying to get across.  I never said that they don't sell the PS2 at a profit, I said that it was sold for a loss *at launch*.

I agree that the PS2 is sold for profit now, I've never thought otherwise.


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## Janglur (Aug 2, 2007)

Ah, then we misunderstood.
Yeah, EVERY product ever MADE was sold at a loss at first.  =D  R&D costs and marketing and all that rot!  Plus the PS2's hardware costs have been dropping.  When they went from the original gens' 50000 to the 70000 that dropped the weight a couple pounds by using plastic where there was metal, and re-arranging internals a bit, making it cheaper.  Then the third generation consolidated two chips together, a $1bil investment that paid off by, according to Sony, cutting costs $24 per console, the single largest production cost cut in console history during a console's normal lifespan.  (The NES revisions that came out in 2001, 2005, and 2007 are neat but way too late.  But an NES that's consolidated to a single chip is pretty cool.)  A really considerable drop!  Now the latest generation $130 PS2 is the closest to cost the PS2's ever been.  I have no concrete evidence on that besides Sony stating it IS still making profit per console.  So for all I know it's only a buck.

But the PS2 paid itself off at the 20m mark.  It's over 50m now.


IT'S OVER TEN MILLIIIOOOON!


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> Ah, then we misunderstood.
> Yeah, EVERY product ever MADE was sold at a loss at first.  =D  R&D costs and marketing and all that rot!  Plus the PS2's hardware costs have been dropping.  When they went from the original gens' 50000 to the 70000 that dropped the weight a couple pounds by using plastic where there was metal, and re-arranging internals a bit, making it cheaper.  Then the third generation consolidated two chips together, a $1bil investment that paid off by, according to Sony, cutting costs $24 per console, the single largest production cost cut in console history during a console's normal lifespan.  (The NES revisions that came out in 2001, 2005, and 2007 are neat but way too late.  But an NES that's consolidated to a single chip is pretty cool.)  A really considerable drop!  Now the latest generation $130 PS2 is the closest to cost the PS2's ever been.  I have no concrete evidence on that besides Sony stating it IS still making profit per console.  So for all I know it's only a buck.
> 
> But the PS2 paid itself off at the 20m mark.  It's over 50m now.
> ...



I believe the component cost for the PS2 is around $90 or so.  I read some industry reports prior, but I don't have any links to them.  I know that the EE chip for PS2/PSone emulation in the PS3 cost a pretty penny and now that they've begun cutting it, those manufacturing costs dropped considerably.

An FYI, the Wii actually sells for profit now and it did at launch too.  It's sold for much more than its manufacturing cost.  I think there was a report that estimated a $60 - $70 profit.


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## Janglur (Aug 2, 2007)

Yeah, they're going to cut the PS3's manufacturing cost for the UK PS3 by, they _say_ $103 each unit by integrating the GPU and CPU.
Sounds hokey, IMHO.  I bet it's something else.  I mean, that is NOT a minor revision.  That's a total redesign, and the restructuring and R&D cost is going to be legendary for a mid-release change like that.

I really just don't think the PS3 has a chance.  It'd take an absolute miracle by this point.


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## Silver R. Wolfe (Aug 2, 2007)

Janglur said:
			
		

> Yeah, they're going to cut the PS3's manufacturing cost for the UK PS3 by, they _say_ $103 each unit by integrating the GPU and CPU.
> Sounds hokey, IMHO.  I bet it's something else.  I mean, that is NOT a minor revision.  That's a total redesign, and the restructuring and R&D cost is going to be legendary for a mid-release change like that.
> 
> I really just don't think the PS3 has a chance.  It'd take an absolute miracle by this point.



I've never heard anything about integrating the GPU and the CPU of the PS3, that is strange.

As for the PS3, I think a lot of people are being overly critical because the Xbox 360 had a full year to get the lead in market share and because of the high price tag now.


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## Janglur (Aug 2, 2007)

http://en.wikipedia.org/wiki/PlayStation_3

My bad, was actually the removal of the  EE+GS chip


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## Poink (Aug 2, 2007)

Xbox360 for the win!

The silly stuff, is, you can hack playstation games to get them on xbox


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## TehSean (Aug 2, 2007)

What'll happen to it? I dunno. Its price will drop eventually and people will use it to play games on. Or, people will find a game that they worship and shell out the current burden it costs to play the game they like. If there are simultaneous, multi-platform releases, they'll likely already have one of the consoles the game's to be released on.

To me, the only reason I would consider buying or renting a PS3 is Metal Gear Solid 4. Why? I'm a metal gear fan. That's all there is to it. To me, the PS3 is a huge premium.

However, I'm spending over 1000 USD upgrading my computer. Why? I chose to. A PC is more flexible than any console on the market. A console doesn't have open access to mods.

On a more dark note, it gives a lot more freedom than a console does... For the most part. I'm waiting for the PC scene to revive because it seems like it has become rather quiet of late.


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## TehSean (Aug 2, 2007)

(Also, aren't console component costs subsidized or something in order to allow the company to generate a profit? Are the values you guys are using for the components the consoles are made of the commercial retail values that only everyday people like us pay for? 

.. 

Aside from that, don't the companies actually make money through licensing fees, getting some money from each piece of game software sold on their system? So isn't the cost of the Console and its Components irrelevant in the end when you look at the larger plan? Sort of like an RTS game, where you present your own expensive units to be vulnerable. Your enemy attacks your expensive units, thinking that they are making you pay dearly in numerous resources and time. During that moment, you can destroy their buildings and resource gathering equipment and undermine their infrastructure, gambling your expensive units for something else worth far, far more than what you had originally presented as the crown jewel.)


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## Janglur (Aug 2, 2007)

TehSean said:
			
		

> (Also, aren't console component costs subsidized or something in order to allow the company to generate a profit? Are the values you guys are using for the components the consoles are made of the commercial retail values that only everyday people like us pay for?
> 
> ..
> 
> Aside from that, don't the companies actually make money through licensing fees, getting some money from each piece of game software sold on their system? So isn't the cost of the Console and its Components irrelevant in the end when you look at the larger plan? Sort of like an RTS game, where you present your own expensive units to be vulnerable. Your enemy attacks your expensive units, thinking that they are making you pay dearly in numerous resources and time. During that moment, you can destroy their buildings and resource gathering equipment and undermine their infrastructure, gambling your expensive units for something else worth far, far more than what you had originally presented as the crown jewel.)



My posts are the VERY subsidized ones.  IBM is selling it's cell CPU for over $500 for the CPU _alone_.  So you can see that Sony isn't paying jack for it in comparison.  And it's STILL that expensive.


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## PROSTSHOCKERERER (Aug 2, 2007)

AHHHHHHHHHH IM SO ANGRY. YOU IDORTS, NINTENDO WILL REIGN SUPREME.

Gad. Look, as technology stagnates, the ps3 will become matched with the 360 and with that it will become a two way race to the finish that I assume the 360 will have in the bag.


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## ADF (Aug 3, 2007)

Frankly with dual system development forcing the exact same games on all systems, I don't see either the 360 or PS3 taking the lead in visual quality. It takes exclusive games to fully utilise a systems hardware and they are getting rarer these days.


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## Janglur (Aug 3, 2007)

Because exclusives generate less revenue, ALWAYS.  Fantards will refuse to get the game just out of principle


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## TehSean (Aug 3, 2007)

It's pretty obvious that the formula has worked in the past for them to have gotten to where they are today. A lot of posts make it sound like Sony's entire well-being hinges on their game console when they manufacture a wealth of other electronic products elsewhere.

So, the console will eventually be replaced by whatever they build next, success or no. They're that rich. If it were a total failure, then production would cease almost altogether and a completely unique model would be built with affordability in mind I suppose. These are all just musings though, so make what you will of the guess.


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## ADF (Aug 3, 2007)

To add to my above post there was actually a article writted in 2005 that predicted all this. It is based on old information (refers to Wii as Revolution with unknown specs) but they predicted the problems faced today quite well, even issues with multicore processors and software becoming more cross platform orientated.


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