- Joined
- Jun 13, 2005
- Messages
- 66,473
- Reaction score
- 38,219
Bullshit, what you said was this:I didn't say it's not a better PC at the price point, that's why noted that the the lowest priced high volume prebuild is this one, which leaves Valve plenty of room to raise prices if it's planning to compete with desktops. RTX 5050 doesn't do much volume for obvious reasons, hence I picked RTX 5060 desktops.
What I did say was substantially lower than $499 isn't likely, unless Valve intends on taking a bath on hardware. $599-$699 would be my guess, since that gives Valve more room for partners down the road, plus the uncertainty of NAND and DRAM supply right now. I
That was your initial assessment, and that's what I disagreed with.As always, the question is how much of a bath is Steam willing to take on hardware in order to protect its software moat. Interesting the GPU isn't bigger, guess they couldn't/didn't want to pony up for that big an order with AMD and compete more directly with console and PC.
As I've shown, the Steam Machine is clearly positioned to compete directly with the consoles. Not only in processing power, but more importantly, in terms of price. Only after I highlighted that the primary detriment of the original Steam Machines, apart from a less mature SteamOS, was their terrible pricing, did you begin talking about a $499 price which is the same as the PS5 Digital, and less than the PS5 ($549) & Xbox Series X ($599/$649). Yet your initial reaction that they couldn't "pony up" for a bigger GPU to "compete more directly" with consoles and PCs clearly doesn't make sense, especially in the context of that price. A prediction of $499-$599 clearly positions it as a direct competitor based on price range.
Furthermore, why would it require "taking a bath"? Sony has actually made money on hardware sales. That has been one of their new goals in contradiction to historical precedent; they seek to turn a profit on the consoles themselves. If they made a profit on the PS5 at $399/$499, and still apparently do at $499/$549, then why is it so inconceivable Steam could make a profit with a lesser machine than the PS5 while undercutting the PC market when they still have hundreds of dollars of room to spare beyond that $499 price point? The following was written before Sony's price hike:
Tweaktown said:Sony is indeed selling PlayStation 5 consoles at a profit. Or they were, as of August 2021. This profitability hasn't remained the same, though; on the contrary. Profits on individual PS5 sales have fluctuated and lessened as time goes by.
It's a fact that PlayStation 5 consoles are now more expensive to make than they were previously.
Sony has repeatedly said that PS5 console profit sales have "deteriorated" across multiple quarters (that is to say, lessened), leading to dips in operating profit during critical periods. These drops came at a bad time for Sony, right as the company was starting to pay towards the $3.7 billion acquisition of Bungie, which was actually approved earlier than Sony had originally expected.
2. Profit Maximization to Offset Losses - Sony makes a long-term strategy to sell PS5 at the highest profits possible
Sony has responded to these higher costs in a number of strategic ways.
The first was to make all PlayStation 5 consoles technically digital by default--something that is reflected with the PlayStation 5 Pro. Instead of having two separate console models, Sony has made a single PlayStation 5 Slim model that has an interchangeable disc drive. This can reduce costs in the long term and alleviate the need for dual SKU production.
The second major strategic innovation was the introduction of the PS5 Slim's new revised form factor, which emphasizes size and weight reductions.
Sony has significantly reduced the weight of its new PS5 Slim models in an effort to reduce costs across manufacturing lines--lighter consoles were achieved through reductions in specific extraneous cooling solutions.
Lighter consoles also mean less weight to ship overseas, which lowers the cost of freight shipping. When Sony ships hundreds of thousands of pounds of consumer electronics to multiple regions worldwide, every ounce matters.
There's also the new 6nm Oberon Plus N6 SoC that's found in the PS5 Slim. The N6 Node is actually part of the N7 family at TSMC, but it has better yields and can be produced more efficiently, thereby effectively reducing long-term costs through the reduction of wasted chips.
This is the main purpose of any console revision. The first line of systems are always meant to get the consoles out the door and fill out the installed base, and then the new models aim at maximizing profits through cost control. This is something that Sony has been doing for decades.