Blue lasers coming down in price, PS3 to follow?
By Erik Hanson 
posted May 1st 2007 11:11AM
posted May 1st 2007 11:11AM
Sony's semiconductor subsidiary recently announced an increase in blue-violet laser diode production, with a monthly capacity of 1.7 million, and capability to produce up to five million with future upgrades. In June the diodes are expected to cost around $8 per diode in bulk, as compared to a price of $125 per drive (including the diode and other parts) when they came onto the market last year. Analysts predict that the lower cost of materials will likely drive manufacturers of blue-laser products to lower their own prices, with the PlayStation 3 benefiting from this reduction by allowing Sony to reduce the price, possibly even lower than $499, to be very competitive with the Xbox 360 Elite model. Of course, Toshiba could also theoretically take advantage of similar cost savings to reduce the price of their own HD DVD players. Perhaps that Wal-mart player isn't such a far-fetched idea after all.
Only Problem is that Sony has to first break even on the sale of a PS3 before they should consider a price drop.
you know better than that..........lol........
I dont even think they broke even on the PS2 before the price drop.............
The business model for the PS3 is not to break even on hardware sales, it is on software and BluRayDVD. This is why PS3 games cost $10 more on average and BluRays are $5-$10 more.
rpgSE.com: By that logic, why do XBOX 360 games cost $10 more?
Why do people think that Sonys ability to mass produce blue laser diodes will reduce the price of HD-DVD players?
Don't you think that they would go into Sony products first and BluRay second?
Sony COULD fuel a cheaper HD-DVD market early in the game use hard spend R&D dollar to ensure the competitions sucess at the hands of a Sony owned company but somehow I doubt that.
Also where does this bluray costs 5-10$ more than HD-DVD come from? I get my blue ray disks for between 20-30$. Do HD-DVD's cost between $15-25, the same as a new DVD?
This move by sony would lower costs for blue diodes in general, no matter who makes them and who uses them. Because there is competition at the supplier level, other suppliers would have to lower their prices as well to maintain competitive edge in order to match Sony's. Simple economics. When the supply is high, given a constant demand, prices will drop. In closing, yes, hd dvd could also see a price drop.
I think he means they cost more than the DVD version which is generally true.
Next-gen games $10 cost more than last gen games but that true for Xbox as well.
You seriously think Sony will sell blue diodes to Toshiba at market value? ROFL.
Here is the offical statement.http://www.sony.net/SonyInfo/News/Press/200704/07-037E/index.html There are making BD ONLY diodes. Before someone tries to jump all over me saying that they are they same read this ...http://www.engadget.com/2006/07/09/new-lasers-from-ricoh-read-both-hd-dvd-and-blu-ray/.... Interesting wording in this article though engadgethd.
ummm so diodes are expected to cost $8, what is their current cost??
How much does a DVD's diode cost? Anyone know?
DVD!?!? LMAO!!!
A Nickel maybe......
the same reason.........
They take a cut off the games too.......
and think back.......Most all Video games at release costed around $50.......thats been the same price basically since NES.......
Microsoft is actually racking up on Game Sells tho......they could EASILY sell Their Dual Layer DVD 360 Games for the SAME Price as regular XBOX games..........and probably will in a year or less
@Sy
You really think Sony will give a price drop (because of diodes) on the ps3? (A $200 per console loss)ROFL.
Blue diodes only cost $8 now. Hmmm, yet the ps3 is still hurting Sony by them taking big loses still. Just saying for a price drop to be a smart move you need to be in the black and cut more costs besides the blue diodes.
The blue diodes were one of the most expensive components in the PS3. Now that their cost and supply has been resolved to a geat extent, sony could be seeing black.
Let's not forget they also took out the emotion engine, and that it's highly likely other parts would cost less now then they did in october/november last year. (e.g. 60GB HDs)
If sony is still losing money, it can't be that much.
Come on guys, I love how everyone swings on Sony's sac. It doesn't say that Sony dropped the price, it says Sony's supplier has been able to drop the price, and guess what, the HD-DVD players all use the same blue diode that Blu Ray does, so this discount now applies to HD-DVD. (I love how that tid bit was an afterthought in the article), freakin sony whores...
This is a Sony subsidiary, why would anyone think HD-DUD would benefit from Sony having a cheaper source of up to 5 Million blue laser diodes. This might free up some of the resources that Sony had been using from third party manufactures but that doesn't mean the third parties can produce them even close to the yield and cost that Sony's new fab can. Any surplus from third party manufacturers could easily be taken up from other Blu-ray player manufacturers. If other blue laser vendors don't increase their yield the diodes are more likely to increase in price as the number of players for both formats increase. Simple economics. This is great news for Sony and any Blu-ray partners that get access to this new supply.
I think your the one swinging one your own sac. Read the offical press release. http://www.sony.net/SonyInfo/News/Press/200704/07-037E/index.html...Here's a clip just in case your to ignorant to read it......
"April 23, 2007, Tokyo - Sony Shiroishi Semiconductor Inc. (hereafter Sony Shiroishi), a wholly-owned subsidiary of Sony Corporation (hereafter Sony), "....and.......
"Sony had already installed front-end wafer process equipment capable of producing 5 million blue-violet laser diodes (BD playback-only equivalent) per month."
Who are you trying to fool. This is a co. owned by sony. Producing BD ONLY diodes for sony products. As well as other members of the BDA! You Toshiba whore!
The PS3 is one thing. This should make the cost of a stand alone cheaper as well!!
Well, you probably know by now that Microsoft hires tons of people to post online and complain about PS3 in online forums and blog comments and news followup comments. Only recently Sony has countered the threat and did the same to protect their image.
There are lots at stake. One is that Microsoft feels threatened that this playstation product line is taking a large percentage of the main reason people purchase computers (to play games and surf the internet). Sony enlisted the help of UK and now the battle
has begun. At the helm of Sony is a UK boss and you know that the US (where Microsoft is) and the UK split up a while ago (declaration of independence). Well, if you remember a while ago, England liked going to different countries and merging them into their
own (colonies or commonwealth, whatever you call it). At one point it had India, Hong Kong, Canada, United States, New Zealand, Australia, South Africa, and many others on almost all the continents. The United States rebelled and split up and soon after many
countries did the same, but not all. The US took this independence split so strongly it started going to other countries to split them up as well (West and East Germany, China and Taiwan, North and South Korea, and almost Vietnam). In fact the US almost split
itself apart during the US civil war. Right now it is trying to split Iraq into different parts based on ethnicities (I think they are building walls now). Japan is like the UK, it liked going to other countries to merge into itself. Well it is interesting that the UK and Japan
are now friendly with each other in Sony against the US in Microsoft. The "union"ist against the splitter. One liked to make slaves of people, the other create conflict within people to split them.
Sony seems to have great expertise in hardware and very skilled in game software. Microsoft seems to have great expertise in software (so so in games), and destroying competing companies. Sony doesn't go around destroying companies, they seem to
manufacture products that compete with their own products and destroy their old products to keep innovating. Microsoft doesn't try to innovate, they copy what is new out there, merge into their OS and destroy competing companies to keep the platform same and
stable. Some examples of Sony is the CD, then the DVD, then the Blu-Ray. The same with their digital cameras (many new models each year replacing older products) and camcorders, and walkmans, etc. Some examples of Microsoft is the destruction of netscape,
wordperfect, lotus, OS/2, doublespace, many many others. Now they are going after Adobe (flash) and Sony (games) and Linux (OS) and to a small extent apple (Vista is a copy of many parts of Apple's OS). Microsoft is going into the hardware business now (Xbox),
and is probably going to start manufacturing the PC themselves anytime now, and destroy Dell and HP (and probably lots of clone parts makers in the process). They own the IP to all the pieces of XBOX360 hdardware (which is basically runs windows inside).
Well, many people have quoted... "Microsoft is three times a charm", so they will probably not win with Xbox360 (the market that is, profitwise is another matter). It will probably take another iteration before Microsoft actually gets it right. In the mean time, Sony is
headed into the other direction. Instead of purely hardware and game software, they are trying to now innovate with software instead of just hardware. Sony is good at coming up with new stuff to make the past stuff obsolete. Microsoft is good at grabbing other people's
stuff and destroy the maker of those stuff. So what will happen when these two companies collide? One scenario is that Sony keeps making new stuff that Microsoft copies, but Sony doesn't stay still because it is in their blood to keep making new stuff and let the old stuff
go obsolete. So Sony will keep feeding Microsoft, and Microsoft will always be one step behind (take for instance blu-ray and hdmi, Microsoft is one generation behind).
Here are the other scenarios...
Microsoft wins. During the third time, Microsoft copies exactly Sony's business and merges it into the Windows. (which is what Microsoft is actually doing now... it is merging XBox into Windows and calling it XNA and Windows for Gaming). But in order to copy Sony,
Microsoft would have to innovate in hardware areas that Sony is good at, and this is a tough hill to climb.
Sony wins. Sony gets to 65nm and then 45nm process, reduces the chips and the PS3 sells cheaper than what Microsoft can do. Sony opens up the operating system, and moves into Microsoft's territory with basic apps. (They are already half doing this by making Linux
Yellowdog standard secondary OS, allowing any apps to run from linux).
Note that Microsoft has lots of capital. They are buying up all the game companies it thinks are important. But it seems many companies that do make good software (those that matter) are making PS3 games again after a honeymoon with Microsoft's money. So the
developer territory is not all that clear at this moment. But one thing is clear, the more powerful machine is the PS3 and once it is tapped when the price of the PS3 lowers then it will be PS2 all over again. So what will happen in the mean times is that Microsoft will
try to buy up all the developers to dry up Sony's base of software titles, copy the business model of playstation and put it into Vista or windows, and do their usual business tactics to drive sony out of the business (like the postings online and the media stuff, etc). Then
they will start manufacturing their next XBox PC's to run their own Windows Plus Games OS (Vista Game OS). It is like Windows Plus Internet Explorer after netscape died. but in this case Dell and HP and clone manufacturers will die this time as well. by then Sony
will most likely keep innovating in the Game and Media area with the next generation, and probably merge all the basic needs of computing into the PS3 or PS4. By the next generation the difference between Microsoft and Sony will be less clear if they attack each other
head on. Can an innovative hardware company that is just picking up software innovation :compete: with a software copying monopoly with lots of capital capable of destroying competitors (and just picking up hardware innovation)?
In other words, Sony is learning software innovation while Microsoft is learning hardware innovation. To even the competition, Sony should at a minimum copy the basic operating system of PC's so people can do regular stuff and install application in the XMB. They actually
went half way there by allowing people to do music, pictures, movie viewing, chatting, and webbrowsing. Once they open up the XMB a full war will start between Windows and XMB. Sony will have an advantage because consoles cost less than PCs and this time around
the monitor resolution of a PS3 is the same or higher than the average PC monitor. Microsoft in the mean time copied almost all of Sony's console features (but of the last generation).
Sorry the first one didn't work; here you are again you Toshiba whore!
http://www.sony.net/SonyInfo/News/Press/200704/07-037E/index.html
IF the sony diodes were a part of the general supply you could say that a large supply exists and the price will fall but that's not the case. Do you really think Sony will sell these diodes to non-BDA companies? If other vendors can't manufacture the diodes with at lease equal yield and costs the price will not drop. So if the general supply is constrained by big demand, everybody trying to get there high def players on the selves by the holiday season, the price of the diode is unlikely to drop. The reason the PS3 was delayed in the EU regions was there wasn't enough blue laser diodes to cover demand. That was with Sony and Toshiba buying all available diodes.
sorry, Kevin, but your statement is flawed, flawed, flawed. Companies do not sell products for a loss, ever...period. (with the exception of american farmers who have a lot of their business subsidized by the american govt, and console manufacturers who make all their money [typically] on the back end in licensing and games...but these are two very different examples.) Just because one company is able to get a new machine, and cut the cost of their product by 93% doesn't mean that all companies in the same field will quickly follow suit. Its not just simple economics. If you dont have the technology and R&D to compete, you wont compete.
Companies do not sell products for a loss, ever...period
What an idiotic statement. I'm sorry but I had to say it.
What would you call around $240 and $305 loss that Sony is taking on each and every PS3 console. It's not only the console they are taking a hit on, it's PSP, UMD and a few other things as they are trying to push their standards over hardware. This goes the same for XBox 360, fortunately for Microsoft their business strategy and a timely production of consoles before everyone else just allowed them to break even and start making money on a global level. Sony has a long long way to go to achieve that.
Microsoft willingly lost money as more consoles out there, more accessories and software they will sell and license. This is where the real money is.
There are plenty of examples where a company is taking a hit on hardware so they can penetrate the market to make money on their software. It's a common business approach, not just for farmers as you said it, especially in today's world with tough competition.
I guess i'm an idiot, you're right...xbox sony and many other console manufacturers have sold their consoles at a loss, only to make their money in licensing in games...
wait a minute, i thought in my previous post i said...."Companies do not sell products for a loss, ever...period. (with the exception of american farmers who have a lot of their business subsidized by the american govt, and console manufacturers who make all their money [typically] on the back end in licensing and games...but these are two very different examples.)"
oh wow, so maybe i did say that before hand, and your the well...no so smart person that didn't read what someone posted. then decided, hey i can be quik to the guns and call them out, but only to look like an ass JUST BECAUSE I DIDN'T READ...
anyways, i'll go on with my example if you are having a hard time getting it...
1) GM will not sell all its cars at a loss to compete w/ Toyota, just to make some of their losses back with their financing arm of the corporation
2) HP will not sell all its computers at a loss to compete w/ lexmark, only to make all their money back in ink
3) Fender will not sell all its guitars at a lost to compete w/ Gibson, only to make their money back in picks...
Anyways, i could really go on if you want me to. But as i said before, unless you're a sissy farmer, a console manufacturer, or even a theme park like six flags, or sea world (that whole buy a day, get a year free stuff...they make their money on people buying stuff in the park, not admission ticket sales)...you're not going to find any businesses that sell at a loss...period.
Sorry you are dead wron I remember my dad payin almost 200$+ for my ves I think it was like 190 or so then a game. So in acuallity the nes was far more expensive the say the wii or 360 core. Also any one remember atari that went for like 120 - 200 as well depending on the box you got. so todays prices are on par with inflation ps3 is a richmans console and will never go mainstream. The wii is mainstream already as well as 360 as far as installed base goes. the 360 elite same as a ps3 but for a well set person. Gaming is getting out of hand as far as pricing goes and I really dont see the PS3 going down just because sony saves a little. Trust me the will continue to rape people thats why we nolonger have a cheaper option. I today could go find 20 - 30 maybe more ps3 on store shelves in my area more 360s than that and guess what no wii's. It looks as if people are tired of needing to sell a kidney to be a gamer. So ps3 wont come down just for this Sony is to cocky and think they know better than we do as far as what consumers need or want. I really want a ps3 but too much to much and I say this with a pc dx10 vista so trust me I konw price and I have a 360 and the handhelds. Its just the ps3 for now does not justify the price compared to what you can actually do. I dont like trying to be sold on naught more but the pontential of a system that is showing much on the gaming fron that cant be done cheaper or elsewhere. But remember the nes in 85 was around to hundred ps1 was like 300-400 so we are still comprable as far as that goes
Well you are not right. You should've said companies that do not create software in any shape or form.
You see what you pointed out are all companies that exclusively produce hardware (whether it's a car or a computer or a guitar). There are companies on the market that produce both hardware and software and their long term business objectives are to distribute hardware even at a loss so they can gain software market share and get that lost money back. Even Apple (the snuttiest of all) loses money on certain hardware products in order to push their software in some areas.
In a world of software and services, more and more companies that deal with software in any way shape or form, might discount products at a loss to offer their services.
A good example are telecommunications companies. They often take a loss on cell phones or other devices they buy in order to get you to sign up for a service. They are not manufacturing consoles now don't they?
So your comment is flawed. You can't generalize companies, as in all companies except farmers and console makers. You see that don't you?
i'm sorry that i didn't get the 15 examples that i should of to the exception of this. i'm sorry i didn't explicitly say, "hey lots of people that sell hardware w/ software support do this". i was under the impression that most people would get the picture after two examples, evidently...you did not. you didn't fully read my first comment that i made on the subject matter, and you tried to bust me on it. because i didn't leave 5 examples, and a powerpoint presentation in my first quote doesn't make your reply any less wrong. companies which produce blu ray diodes WILL NOT sell their diodes at a lost just to match the prices of the sony subsidiary; they dont have anyone to subsidize their losses, and it is not the goal of a business to loose money.