News
November 5th, 2005, 03:58 AM
By Frank Ling, GN Writer
Friday, November 04, 2005
Merrill Lynch is not only an investment organization which advises stock picks for its customers; it has recently put its two cents in regarding the next-gen “Console Wars” and who they think the winner will be.
According to a report released by Merrill Lynch about the match up between the Xbox 360 and PS3, they said, “PS3 will not only be significantly more costly than Xbox 360 at launch, but will continue to operate at a cost disadvantage for several years. As volumes ramp up, Microsoft should see an improved ability to lower hardware costs.”
A big reason why the Xbox 360 has a lower production cost is because it is primarily made of processing chips that can be obtained “off the shelf” as opposed to the PS3 having a custom chip at its core -- Sony has selected the “Cell” processor (expensive) for its unit whereas Microsoft is using readily available PowerPC chips (less expensive). Additional costs which drives up the price of the PS3 are its plans to incorporate the new Blu-ray DVD technology. Microsoft’s Xbox 360 will use standard DVD disk formats.
Lynch remarked on the high cost of the PS3 by saying, “All of this might not matter were Sony in a position to take large losses on the PS3, but the company’s financial situation raises questions about just how much money Sony is going to be willing to lose.”
Clearly, Merrill Lynch has thrown in its vote for the 360 over the PS3. However, it must be noted that this is from a business point of view where production costs and initial bottom lines determine a successful product. In the gaming community, what matters the most? It’s the games and not necessarily the hardware. In the long run, this will determine which new-gen console will sell more units.
Friday, November 04, 2005
Merrill Lynch is not only an investment organization which advises stock picks for its customers; it has recently put its two cents in regarding the next-gen “Console Wars” and who they think the winner will be.
According to a report released by Merrill Lynch about the match up between the Xbox 360 and PS3, they said, “PS3 will not only be significantly more costly than Xbox 360 at launch, but will continue to operate at a cost disadvantage for several years. As volumes ramp up, Microsoft should see an improved ability to lower hardware costs.”
A big reason why the Xbox 360 has a lower production cost is because it is primarily made of processing chips that can be obtained “off the shelf” as opposed to the PS3 having a custom chip at its core -- Sony has selected the “Cell” processor (expensive) for its unit whereas Microsoft is using readily available PowerPC chips (less expensive). Additional costs which drives up the price of the PS3 are its plans to incorporate the new Blu-ray DVD technology. Microsoft’s Xbox 360 will use standard DVD disk formats.
Lynch remarked on the high cost of the PS3 by saying, “All of this might not matter were Sony in a position to take large losses on the PS3, but the company’s financial situation raises questions about just how much money Sony is going to be willing to lose.”
Clearly, Merrill Lynch has thrown in its vote for the 360 over the PS3. However, it must be noted that this is from a business point of view where production costs and initial bottom lines determine a successful product. In the gaming community, what matters the most? It’s the games and not necessarily the hardware. In the long run, this will determine which new-gen console will sell more units.