Cells are expensive

Ace Pace · Post by **Ace Pace** » 2005-11-19 12:15pm

SO, HOW MUCH DOES a Cell cost? Other than the fact that you can't buy one right now, and the Playstation 3 is about a year out, it does cost money to make. From what we understand, each wafer run through the fab costs $9-10K, and IBM gets about 65 good chips per wafer. A quick look at the wafer shown at MPF shows that if these numbers are true, yields are not all that hot.

This would put each raw Cell on sale at a price tag of almost $150 give or take a bit. Toss in $25-30 for the packaging, and you are at a non-trivial number for a console. Assuming $175 for a 'solder to the board' working Cell, and you are at about half the cost of the console with just the CPU. Add in the GPU, RAM and a HD, and you are in loss-leader territory.

Hopefully yields will go up before the PS3 launches, there are about 200 good sites on the wafer, 2 per 'square', so there is room for IBM to knock $100 or so off the cost. Either way, it looks like IBM and Sony have a long uphill climb for the next console. µ

PS3 is looking more expensive by the second.

Death from the Sea · Post by **Death from the Sea** » 2005-11-19 12:29pm

rumor has it that HALO3 will be released on the same day as the PS3, in an effort to slow PS3 sales. not sure if it is true though, that is why it is a rumor.

Praxis · Post by **Praxis** » 2005-11-19 02:34pm

Um, okay, so the Cell processor costs a lot of money to produce one year before any products actually using it will come out.

And this is unusual how? In a year it will cost less, and when they get ready for mass production the costs will also drop.

Ace Pace · Post by **Ace Pace** » 2005-11-19 02:37pm

Except, remember, if they make CELLs the day it comes out, its atleast a few months before it reachs market.
And they need it mass producing quite a few months before the PS3 sells, processors take time to make, they arn't quick processes.

Post by **Mr Bean** » 2005-11-19 02:47pm

Death from the Sea wrote:rumor has it that HALO3 will be released on the same day as the PS3, in an effort to slow PS3 sales. not sure if it is true though, that is why it is a rumor.

Its not rumor its a certian someone coming out and saying it and crowing about the fact.

If HALO 3 is acutaly ready is another question. (Ready not in the sense that its ready to ship, it will be... but if the game itself is finished)

Plus which PS3 Launch? The Japanse one in March-May Timeframe or the American one in the July-August timeframe?

Praxis · Post by **Praxis** » 2005-11-19 02:49pm

Mr Bean wrote:
Death from the Sea wrote:rumor has it that HALO3 will be released on the same day as the PS3, in an effort to slow PS3 sales. not sure if it is true though, that is why it is a rumor.
Its not rumor its a certian someone coming out and saying it and crowing about the fact.

If HALO 3 is acutaly ready is another question. (Ready not in the sense that its ready to ship, it will be... but if the game itself is finished)

Plus which PS3 Launch? The Japanse one in March-May Timeframe or the American one in the July-August timeframe?

The actual quote is:

"Note to the hard-core faithful: the next version of Halo will not, repeat not, be ready in time for the launch of Xbox 360. It will be part of the all-important second wave next spring. 'It's perfect,' Gates says, radiant with bloodlust. 'The day Sony launches [the new PlayStation], and they walk right into Halo 3.'"

He basicly just said they'll launch it in the Spring and the PS3 will launch around the same time and walk right into it.

The Kernel · Post by **The Kernel** » 2005-11-19 03:44pm

Ace Pace wrote:Except, remember, if they make CELLs the day it comes out, its atleast a few months before it reachs market.
And they need it mass producing quite a few months before the PS3 sells, processors take time to make, they arn't quick processes.

Worse, they are probably already mass producing for the Japanese launch. Either Sony is going to have to sell the PS3 for $500 or they are going to take one hell of a hit for every console sold.

Praxis wrote:Um, okay, so the Cell processor costs a lot of money to produce one year before any products actually using it will come out.

And this is unusual how? In a year it will cost less, and when they get ready for mass production the costs will also drop.

By the same token, in a year the X360's chips will be cheaper as well, which will allow Microsoft to undercut Sony with a price cut. Imagine what would happen if they lowered the X360 Core to $199 and the Premium to $299 right before the PS3 launch.

Praxis · Post by **Praxis** » 2005-11-19 04:04pm

Also true. Although I doubt it will be that dramatic (a full 1/3rd of the price). The Cell's price drop I would think would be more dramatic since in the case of the 360 we're comparing its price at launch to its price later, versus the cost of the PS3 prior to full production to its price at launch.

Also, there's the fact that most of the components in the 360 are common stuff. A normal DVD drive, a normal hard drive, a fairly normal processor (granted, tweaked how they want it), etc. The PS3's stuff on the other hand are brand new to the market- Blu-ray, Cell, etc. So we can imagine that as the technology becomes more common, the PS3's price will drop more dramatically than XBox 360, but it will have a higher price at first (unless other things ship with Cell and Blu-ray before PS3 does).

And if Blu-ray dies out, so does the PS3.

Post by **Mr Bean** » 2005-11-19 04:26pm

Praxis wrote:
"Note to the hard-core faithful: the next version of Halo will not, repeat not, be ready in time for the launch of Xbox 360. It will be part of the all-important second wave next spring. 'It's perfect,' Gates says, radiant with bloodlust. 'The day Sony launches [the new PlayStation], and they walk right into Halo 3.'"
He basicly just said they'll launch it in the Spring and the PS3 will launch around the same time and walk right into it.

Pretty much, thanks for finding the acutal quote.

Praxis · Post by **Praxis** » 2005-11-19 04:48pm

Gotta love Google.

It's interesting that analysists keep proclaiming PS3 for $500, while Sony keeps saying under $400.

I haven't posted this here yet so some might be scratching their heads. Multiple quotes:

In keeping with the PlayStation business model, PS3 will roll out at a loss for the first six months, then rapidly turn profits on game-license fees. PS3 will be bundled with a selection of preloaded films, TV programs and games and sell for between $300-$400.

http://arstechnica.com/news.ars/post/20051105-5530.html

and the much older one,

Japanese Web site Impress PC Watch reported that SCE has told its business partners that the PS3 will be under 40,000 yen ($370) at launch. The news has spurred speculation that the company might launch the machine with the same price it set for the PlayStation and PlayStation 2. Both machines were priced at 39,800 yen ($368) when they launched in 1994 and 2000, respectively.

http://www.gamespot.com/news/6126410.html?q=PS3%20price