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PS4 initial costing analysis [Updated]

The £300 rumoured in The Times the other day certainly looks a lot less likely after last night.

The Times said Sony was considering pricing the console at least £300, so in this case a £350 price tag would mean The Times were spot on. It's just that trash publications such as MCV thought that read "hurr £300 launch price for Christmas durr"
 

jagowar

Member
If that price list is accurate I don't see it being any cheaper than $499. I really don't see sony taking a loss on the console this time around with what the larger sony corp doing financially and adding all the ancillary stuff will drive the price to at least $500.

IMO the best hope for a cheaper ps4 price is the rumored xbox if its true and ms prices theirs at $399 because of the cheaper internals. Don't think sony can or would let xbox be that much cheaper at launch.
 

Hiltz

Member
Yeah, the $430 and $530 PS4 price rumor may very well be true. The same source stated that the PS4 would have a PS Eye included which turned out to be true. Although, we have yet to learn about its new online service and if it will be subscription-based.
 

hteng

Banned
marketing will cost them a ton, they are most likely gonna make a loss early into the game, not many gonna buy into the whole $599 console thing, they've already burnt their customer once they won't risk it, does sony has alot of hard cash on hand at the moment?
 

grumble

Member
I'm expecting 499. It's a hundred bucks cheaper than the last one (which cost too much), and the console should be cheaper to make this time around. 499 allows them to sell it with a minimal loss.

Also, 499 now is the equivalent of selling it at 438 in 2006 dollars...
 

KungFucius

King Snowflake
The big cost is not the parts but R&D.

That's not really true if the device is sold at a loss. They are going to sell 10s of millions of these things.

Sony can also get a good volume discount because they work in millions of units. Heck they may be able to make it themselves, though I think they only fab basic stuff plus CMOS image sensors.
 

amar212

Member
I'm expecting $499.

I also concur, 499€ for Europe if single-SKU.

If 2 SKU - 399-€449€ for entry SKU and 549€ for premium.

Have no problem with any of those.

And expecting anything lower then 499X is really optimistic.
 

matmanx1

Member
Sony's not going to do a $499 unless it's a Premium SKU. The base SKU needs to come in at $399 or $429 and based on these numbers I think that it will.
 

Kyon

Banned
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.

Um where are you seeing this from? Link? I don't remember anyone ever saying they were taking a loss on Vita also the vita has only been out a YEAR.... What kind of made up BS.. Ch..
 

mclem

Member
Um where are you seeing this from? Link? I don't remember anyone ever saying they were taking a loss on Vita also the vita has only been out a YEAR.... What kind of made up BS.. Ch..

It's possible to have a costing strategy lasting several years spoken about when only a smaller number of years has elapsed, you know.

Not that I recall a profit/loss comment on the Vita earlier either, I should point out, but there's nothing inherently wrong about the principle behind that statement.
 

GashPrex

NeoGaf-Gold™ Member
Would need to see BOM costs for launch of other consoles to determine how this correlates to prices

My understanding is that BOM costs is not a 1:1 correlation for price.
 

Midas

Member
$499 = 3202 Kr
€499 = 4222 Kr

So Im guessing the swedish price to be around 5000-5500? Seems about right.

Yeah. 4995:- or some weird price like 5195:- (Thank you Nordisk Film!). But I will import, don't want to wait until 2014 and the price including shipping, taxes and custom fees will basically be the retail price when it's out here.
 
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.

Do you have a source for this? IIRC they were breaking even/making money on hw until this recent price drop where Kawano said they are losing money on HW. I think the 2-3 years figure was to recoup the R&D cost put into the vita.
 

thuway

Member
The 429 and 529 price points sounds reasonable now. I also believe the "tard" pack will actually be quite function. I see it shaking down like this:

1. 429: Standard HDD, Eye/Controller/Mic, less Premium looking unit
2. 529: SSD, Eye/Controller/Mic, 6 months to one year of PS Plus, Piano Black or glossy.
 

GashPrex

NeoGaf-Gold™ Member
For comparison, according to Merrill Lynch for PS3 ($900!!) - the costs for the cell and blu ray are crazy, my guess is those costs were very high compared to actual

ps3_cost.jpg


iSuppli broke it down for the 360 at $525

http://www.xbitlabs.com/news/multimedia/display/20051123214405.html
 

Effect

Member
Easily looking at possibly around $500. Even more once you factor in at least one game and an extra controller and sales tax and different models. Not even factoring in something like PS+ at the start. A subscription model won't bring the price down overall either. In the end you'd be paying more for the system just making lower payments over time.

I can see one walking out the door having had to drop close to $600 for the cost of entry in the end. Yikes.
 

x-Lundz-x

Member
I foresee a $399 / $499 pricing structure for the console. Even with all this amazing tech packed in the box they surely will not repeat the $599 mess they had the last time.
 

AgentP

Thinks mods influence posters politics. Promoted to QAnon Editor.
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.

I would guess the APU is more and the GDDR5 is less. Some of those other prices look high, ARM for $12? I'd cut all the little thing in half. The HD and BD drives are known quantities. What would "other" be? $25 is a lot of money in a console for unknown things, unless it is the controller which isn't listed and that should be ~$30.

Assuming no camera in the box I bet they can easy build a PS4 for $400 including assembly and shipping.

Edit: Looks like some B3D folks are reading this thread and adding their own estimates.

http://forum.beyond3d.com/showthread.php?t=63125
 

AirBrian

Member
R&D + shipment + marketing.
Yeah I can see $399 if Sony is willing to sell this at a loss for some time.
Otherwise $449 is still fine if the games are worth it.

R&D and marketing are not factored into costing analyses. This analysis is basically the bill of material component of COGS for a PS4. Add the labor/LOH and MOH and you have the complete COGS.
 

artist

Banned
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.
Shave some off the GDDR5 figure into the APU and it's more reasonable. You also forgot to include the cost of the controller plus pseye. I think $400-449 is the minimum we can expect.
 

Sky Chief

Member
Wow, a lot of the costs of those components seem excessive, particularly the little things. The price of the HD in particular seems extremely high to me but I am not an expert on the price that manufacturers pay for these things (but I did buy a 320GB HD for my PS3 on Black Friday for $30 shipped).
 

SmokeMaxX

Member
Wow, a lot of the costs of those components seem excessive, particularly the little things. The price of the HD in particular seems extremely high to me but I am not an expert on the price that manufacturers pay for these things (but I did buy a 320GB HD for my PS3 on Black Friday for $30 shipped).

A lot of black friday "doorbusters" are sold at a loss. Not all of them, but a lot of them are. 320gb for 30 could translate to the numbers in the OP for more space as well.
 
I can't see this going for less than £450 minimum with the other SKU being £550. And at that price, despite the power under the hood, they're going to struggle to shift those consoles given the current economic climate. Looks like they haven't learnt any lessons from the PSP, PS3 and Vita.
 

PistolGrip

sex vacation in Guam
Not a bad assessment. Manufacturing cost is probably a little above $500 right now and will probably be around 450 when they start shipping and once they get mass production going.

The retail price will need to be $499 to cover the shipping/packaging/marketing and storage cost. They will lose on every machine, they even have to give the retailers their cut.

I say they do an Online services (includes free games, backwards compatibility, streaming gameplay, insta-demo on all new titles etc... etc... ) contract for 1 year at $19.99 - $29.99 and selling it at $399.
 

kaching

"GAF's biggest wanker"
I really hope Sony realizes they have to hit the $399 price in the US. That doesn't seem negotiable to me. I'm sure they'll want to go for a $499 "premium" package as well, but they've got to have the $399 option this time.
 

Noirulus

Member
With the cost of the controller, PS Eye, various cables and the headset that is reported to come with every console, I think the manufacturing costs will be about $50 more than OP's estimate. Add to that various production, shipping, and handling costs and we get an additional $30 - 50 cost.

All in all, I think they'll start at the $450 or $500 price range. with a premium 1TB model for $550 / 600 maybe.
 

kingocfs

Member
Not a bad assessment. Manufacturing cost is probably a little above $500 right now and will probably be around 450 when they start shipping and once they get mass production going.

The retail price will need to be $499 to cover the shipping/packaging/marketing and storage cost. They will lose on every machine, they even have to give the retailers their cut.

I say they do an Online services (includes free games, backwards compatibility, streaming gameplay, insta-demo on all new titles etc... etc... ) contract for 1 year at $19.99 - $29.99 and selling it at $399.

No way, man. The new service will be at least $60, unless its tiered.
 
And that doesn't include a controller, which doesn't look cheap to me.

Doesn't include the controller, the double eye camera, the cabling (power and AV), or the headset. They're either going to lose a shitload on each console, or it's going to be upwards of 500 dollars at launch. Even at 500 they're going to lose a lot of money. They'll be making up for this somewhere else. As others suggested, it's going to be from services.
 

RyanDG

Member
Interesting breakdown. If you don't mind me asking, what are you classifying as being potentially "Other" in the cost break down if you aren't including the cooling, etc. in the numbers listed?
 
I'm still thinking $400. I think with their bulk discounts and relationship with manufacturers they can get the total cost down to ~450ish (including shipping, assembly, and controller). Sell for a modest loss of $400.
 

JJD

Member
Doesn't include the controller, the double eye camera, the cabling (power and AV), or the headset. They're either going to lose a shitload on each console, or it's going to be upwards of 500 dollars at launch. Even at 500 they're going to lose a lot of money. They'll be making up for this somewhere else. As others suggested, it's going to be from services.

They won't lose that much money. if 450 is the entry price they will reach profitability with 1 or 2 games sold.

All accessories are probably going to be profitable, specially controllers.
 
If I were betting on it I'd say for base and premium models $399 / $499 or $449 / $499. Anything higher than that would be a disaster in the US imo.
 
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