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PS4 initial costing analysis [Updated]

I think that Kotaku's $429/$529 rumor may become reality. Along with a online subscription it could allow Sony to soak up the hardware BoM.
 

Recall

Member
Sony doesn't buy items at retail prices, they will have a set contract and obviously bulk pricing. I think it will be £359- £399 here in the UK.
 
Wholesale price, but without Sony's specific bulk discount just a generic one.

that's actually not bad at all. even worst case at $449, sony would make a healthy profit per system- and that's WAY out of the norm for them.

$399 is realistic for the entry level sku I think.
 
Well if you read the thread, that's what op is basing his prices on.

generic bulk discount though, not sony specific bulk discount rates. those are likely better- but the OP forgot a few things (PSeye) in his calculation. I figure it's a wash at the high end of the estimate.

Don't forget also that Sony will be using Gaikai network features as a HUGE carrot to get gamers to sign up for PS+, or whatever it will be called. a year or more subscription with every system is pure profit for them, and will do quite a bit to offset losses- much as a premium sku does.
 
I think that Kotaku's $429/$529 rumor may become reality. Along with a online subscription it could allow Sony to soak up the hardware BoM.

No, it will be $399 or $449. The $429 price point makes no sense whatsoever.

FWIW at the office everyone thinks $399 is locked from these specs, we figure Sony will eat $50-60 up front to get to $399 since that is just one accessory/online subscription and one game away from profitability which is not a big jump like PS3 which required 6 games and two accessories.
 
If the $529 upper SKU price is real, that would mean with an extra controller @ $50, a game @ $60, and if I buy local with an 8% sales tax (Georgia state sales tax plus city/county sales tax), I would pay around $690 out the door. $640 on Amazon.
damn, not really interested in paying those prices tbh.
 

DaBuddaDa

Member
I think that Kotaku's $429/$529 rumor may become reality. Along with a online subscription it could allow Sony to soak up the hardware BoM.

Yep, I agree. I posted the same in a similar thread last night. $429 for ~200GB HD and $529 for a 500gb HD and the playstation kinect sensor or some other sort of pack-in, maybe a 6-month PS+ card.
 

AngryMoth

Member
I really thought they would build a system they could sell for $399, but that doesn't seem likely anymore. Can definitely see them offering a subscription model.

Someone told me they're packing in a PS eye with every console, but I haven't seen that confirmed anywhere, is it true?
 
400€ may be ok if I have a game and everything controller related in the pack (headstet, move 2.0 sensor bar...) and free online.

But not sure for day 1.
 

Portugeezer

Member
So a couple of us at the bank have done a costing analysis this morning. I won't be able to give exact figures, as if we ever decide to release them publicly it will definitely blow my cover.

All figures in USD.

APU (CPU/GPU) - 85-90
8GB GDDR5 - 110-140
OS Chip (supposedly ARM based) - 12-18
Video encode/decode chip - 8-12
Blu-ray drive - 18-25
Hard drive - 38-50
I/O - 9-12
Wireless chip + antenna - 4
HDMI+HDCP - 11-15
Other - 25-35

Total - 320-401

These figures are preliminary, and do not include assembly costs, power costs, cooling or shipping as the final design has not been shown and can't be estimated at this time.

Please, please, please remember that this is based on the specification only and cost prices that we know, without a PS4 in the hand there will be mistakes.

Well that sounds promising nonetheless, around $400 would be great.
 

mclem

Member
The PS4 will not be cheap. I see it as a gamble, they go all-in. Either they sell cheap or they take a significant loss. Again. In my opinion, they're trying to kill the bee with the bazooka.

I did wonder a while ago - over a year, I think - if we'd get into a situation where one of MS and Sony decided to go full-on with hardware but sell it at a *massive* loss to them to try to get the machines out there. It'd be a risky situation but it could well bear dividends. Only thing is, in that situation I imagined it'd be MS who plumped for that strategy.
 

1-D_FTW

Member
I don't really have issues with the 429/529 rumor after seeing the hardware. But I don't see how they can split the hard drive size in SKUs. It's in Sony's economic interest to get people buying stuff to fill those hard drives. Putting in a small hard drive hurts Sony in the end. Plus, nobody really sells small hard drives anyways. At a certain point, it saves you nothing.

Assuming they do have a split SKU, I would say it's more along the lines of a 500GB / 1 (2) TB split. And the extra 100 dollars would get you a year (or 3 months) subscription to their premium network service. You really can't dip below 500GB for the entry level or else you're not only not saving money, but you're costing yourselves future revenue in DD sales.
 
I feel like Sony will deliver a good price, hoping for $400 and i would expect no more than $500.

I did wonder a while ago - over a year, I think - if we'd get into a situation where one of MS and Sony decided to go full-on with hardware but sell it at a *massive* loss to them to try to get the machines out there. It'd be a risky situation but it could well bear dividends. Only thing is, in that situation I imagined it'd be MS who plumped for that strategy.

Why do you think that? Sony actually went for that exact strategy this gen.
 

Curufinwe

Member
If they can't make that many units for the first six months or so they may as well price it at US $500. There's no point pricing it so low that it completely sells out, and scalpers make all the profit reselling PS4s on Ebay.
 

B.O.O.M

Member
I really wish they would bring it around $399. However I also think that lower the price tag, higher the chance of a online play subscription fee
 
I think they'll price it at $450. $100 up from the Wii U is a totally valid price point.

Nintendo will cut the price by the end of the year (maybe even in spring).
249 WiiU basic and a 449 ps4 basic woul be difficult for sony, even with an extremely better hardware in everything.
I think that they have to aim for 399 price point for the basic sku, but it's non easy
 
No, it will be $399 or $449. The $429 price point makes no sense whatsoever.

FWIW at the office everyone thinks $399 is locked from these specs, we figure Sony will eat $50-60 up front to get to $399 since that is just one accessory/online subscription and one game away from profitability which is not a big jump like PS3 which required 6 games and two accessories.

Agree, plus the premium SKU will probably be profitable on HW alone if it's $499.

EDIT: I think they should start doing what MS is doing and offer subsidized PS3/PS4/PSV on their sony stores and then expand that model from there.
 

EvB

Member
Sony doesn't buy items at retail prices, they will have a set contract and obviously bulk pricing. I think it will be £359- £399 here in the UK.

Do you think that the PS4's features and specification mean it's only worth £30 more than a Wii-U?
 

McHuj

Member
So a couple of us at the bank have done a costing analysis this morning. I won't be able to give exact figures, as if we ever decide to release them publicly it will definitely blow my cover.

All figures in USD.

APU (CPU/GPU) - 85-90
8GB GDDR5 - 110-140
OS Chip (supposedly ARM based) - 12-18
Video encode/decode chip - 8-12
Blu-ray drive - 18-25
Hard drive - 38-50
I/O - 9-12
Wireless chip + antenna - 4
HDMI+HDCP - 11-15
Other - 25-35

Total - 320-401

These figures are preliminary, and do not include assembly costs, power costs, cooling or shipping as the final design has not been shown and can't be estimated at this time.

Please, please, please remember that this is based on the specification only and cost prices that we know, without a PS4 in the hand there will be mistakes.


IMO, those two will be integrated into the APU. I believe they only mentioned dedicated hardware, not necessarily that they are separate chips.

Keeping that stuff in the APU should allow for a simpler motherboard as well.
 

Returners

Member
Basically I think it's 399/499 with a 3-month PS+/W trial to rope in the consumers.

The subscription will earn them money.
 
IMO, those two will be integrated into the APU. I believe they only mentioned dedicated hardware, not necessarily that they are separate chips.

Keeping that stuff in the APU should allow for a simpler motherboard as well.

Maybe, but there are advantages to keeping them off-die, you get a yield bonus on the APU and you get easier power gating for the low power mode they talked about. It will come at a motherboard complexity cost, but given that ARM chips are not very power hungry and video encode/decode hardware isn't either Sony would do well to keep them separate.
 
Around $400 seems reasonable then.

How so? Maybe you mean for production costs, but to market this thing and sell it, not to mention shipping and other overhead costs, Sony would be taking a HUGE loss selling it for $400. I'm predicting $500, but requiring a subscription to make up for the loss they would still be taking.
 
So a couple of us at the bank have done a costing analysis this morning. I won't be able to give exact figures, as if we ever decide to release them publicly it will definitely blow my cover.

All figures in USD.

APU (CPU/GPU) - 85-90
8GB GDDR5 - 110-140
OS Chip (supposedly ARM based) - 12-18
Video encode/decode chip - 8-12
Blu-ray drive - 18-25
Hard drive - 38-50
I/O - 9-12
Wireless chip + antenna - 4
HDMI+HDCP - 11-15
Other - 25-35

Total - 320-401

These figures are preliminary, and do not include assembly costs, power costs, cooling or shipping as the final design has not been shown and can't be estimated at this time.

Please, please, please remember that this is based on the specification only and cost prices that we know, without a PS4 in the hand there will be mistakes.

So this is gonna be $499.

Also, I don't see the controller or the camera anywhere?

I think that Kotaku's $429/$529 rumor may become reality. Along with a online subscription it could allow Sony to soak up the hardware BoM.

I really think this could be a pricing option also.

Kotaku really did knock it out of the park with their rumors.
 

McHuj

Member
Maybe, but there are advantages to keeping them off-die, you get a yield bonus on the APU and you get easier power gating for the low power mode they talked about. It will come at a motherboard complexity cost, but given that ARM chips are not very power hungry and video encode/decode hardware isn't either Sony would do well to keep them separate.

I think the video encoder/decoder will definitely be on the APU. AMD GPU's already have the decoder, not sure about the encode, but chances are that's where you want it since you're going to be encoding game play, maybe there's some intelligence that the encoder can "see" the frame buffer as it's being written to memory by the GPU and encode the game play without having to pull it from memory again.

The background hardware could be kept as a separate chip. It would make power gating cheaper, it would be less then a 1W to run. IMO, you only need a single core ARM.
 

Hiltz

Member
With Sony selling PS Vita at a loss for 2-3 years, it would come as no surprise to see them do it with PS4.
 
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