I don't think a lot of you understand costs...

#41Xeeh_BitzPosted 12/7/2012 3:38:28 AM(edited)
So none the less the cost of research would be the same for Microsoft even if they used components 10x better. That would ultimately decide the cost to manufacture the console, not research it since they would have to do that regardless of which components they use.

Unless they're designing completely new technology that never once existed.

So glad we settled that, Research and Development of the console is really the same across all companies

=)
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#42brainlackPosted 12/7/2012 5:09:19 AM
dart246 posted...
DemonDog666 posted...
1. Both Sony and MS can mass produce cheaper then Nintendo

2. It will be a year or two later so the costs will go down.

3. Neither will have a money sink tablet controller so they'll have like 50 to 100 more to put towards the cpu/gpu

Also for the record R&D don't get factored in when pricing a console


Again yes they do, in fact they must get factored into the cost of the item.

1.) Where exactly did you get that!? I would love to see that, becuase as it stands neither of them have their own manufacturing plants and in fact contract all their projects to companies such as Foxconn for their cheap labor and high operations capactiy.

2.) More than likely not...the BoM on most items is typically the second cheapest next to labor (thank you China), and in fact to say that is quite ridiculous becuase the final specs can have a tweak in them over the next year and are probably STILL being worked on for proper optimization.

3.) If you really think that a controller, with a single input resistive screen is the cause for the price, please do some research. While yes the screen is larger at 6", you can see that it is VERY easy to get a tablet with a resistive MULTI-TOUCH screen and actual internals (not just a wifi or bluetooth or whatever they use to transmit the singal and video) inside of it for $99.99. The cost of the controller is increased due to the controller, but not by the astronomical numbers you are putting in.


this if you plan to sell an item would you sell it a lost if you dont factor employees just like gdp does companies submit gdp because they like it? like the gdp of toyota they only submit how much is the raw cost and not the one that is assembled and was research research its like saying a company selling a second hand product you still need to submit a gdp
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#43RyuuHou25Posted 12/7/2012 5:16:03 AM
TC is claiming a lot of things and providing no sources = no credability, no matter how smart they may sound or seem.

No sources, no credibility sir! They should have taught you that already.
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#44darkjedilinkPosted 12/7/2012 7:50:23 AM
RyuuHou25 posted...
TC is claiming a lot of things and providing no sources = no credability, no matter how smart they may sound or seem.

No sources, no credibility sir! They should have taught you that already.


I'm assuming you want sources for the numbers TC uses.

The numbers aren't the point at all. The POINT is, the argument has always been that Nintendo would never sell a console at a loss, meaning that by default Nintendo's consoles will always be less powerful than their competitors consoles, that usually are (the SNES, N64 and GameCube always proving this theory wrong in the first place is somehow irrelevant). However, the Wii U IS being sold at a loss, meaning that, by troll logic, the next gaming systems either need to sell at a much higher loss to significantly outpower the Wii U, or these consoles will have to sell at a higher price and sell at a similar loss.

Either way, their logic is wrong, as the consoles I listed all outpower their competition while being sold for profit, and the Wii U is being sold for a loss in the first place.
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#45SorsShinjoPosted 12/7/2012 9:38:55 AM
nice read TC but 2 big mistakes:

1. no sources and many numberguessing, means you cant convince anybody who doesnt share your POV anyway

2. bad vocabulary. "selling at a loss" which is the core of your post, has always been sales price - production cost. and while there certainly is a relistic relative price for each wii U which is above procudtion cost, we also know that consoles which provided great tech at the cost of "selling at a loss" didn't need all these other numbers to convince anybody of their "real price". As it stands right now the Wii U is selling low tech for a medium amount of money. not a good deal, but early adopters of nintendo hardware only want the first party games, so this will only become a problem in a few months if they don't cut the price like they did for the 3DS when the rest of the market decides if they are interested or not.
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#46Bigmac909Posted 12/7/2012 9:40:44 AM
Even if this is true, TC doesn't understand the idea of "long run".
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#47JonnyBigBossPosted 12/7/2012 9:47:20 AM
As an IT and hardware specialist let me at this.

The people who want amazing next gen PC like graphics are going to be humbled when they see Sony and MS' consoles. I guarantee you theyll have low specs why? Because the hardware required for a noticeable jump in graphics over last gen is extremely pricy and puts out a ridiculous amount of heat.
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#48nickvd8Posted 12/7/2012 9:48:50 AM
stekim40 posted...
I'm sorry but theres NO WAY Nintendo can lose money, the hardware simply doesn't cost that much. 300 Wii U premium of mine probably has a base cost of 100 MAX.

I simply cannot believe they are not making money, either their are lying or they are incompetent. I prefer to think its the former.


I don't think they're the incompetent one. The gamepad is a good portion of the cost, I don't think some people realize how many bells and whistles are really in that thing.
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#49kissdadookiePosted 12/7/2012 10:28:59 AM(edited)
dart246 posted...

TL;DR: Buying $300 of materials mean nothing for how strong the new system is.


See, your post has many erroneous assumptions in it but at the end, you really don't understand how consoles are priced and their profit margins. I'll break it down in the following:

1) You assume NIntendo has a big loss on the systems being sold but we do not know WHICH of the system Nintendo is losing money on, it could very well be just the Basic option. Secondly, Nintendo already stated that they make a profit when just ONE game is sold, this points to Nintendo in practical terms, actually just breaking even on the hardware only sales. So their talk about how they will be selling at a loss is really them preparing for investor's backlash in case the system ends up like how it was for the 3DS most of the first year. It's also a strategy for them to employ to shake off the awful taste of the 3DS price drop (basically giving them a reason NOT to drop the price on the Wii U this time around).

2) It's a WELL KNOWN fact that the 360 was sold below cost and so was the PS3 (the PS3 actually cost $900 to produce, thus Sony actually loss $300 per unit sold).

3) It IS true that we can build a computer which is 4-6 times more powerful than current Wii U/PS360 for $500-$600. Due to that, MS is EASILY able to bring out a $400 next gen Xbox and be in the same profit margin scenario as Nintendo is with the Wii U or at worse, they will be in the same scenario as they were with the 360 (they lost money on each system sold, then additional costs incurred for the faulty RROD machines and extending warranties to 3 years, HEAVY losses their yet they are VERY MUCH in the green in terms of profits for the Xbox division, so this shows you that making money on the hardware is not of utmost importance to them because that's now how they make money from the Xbox, Nintendo however, the bulk of their revenue comes from hardware sales, it's the opposite business model compared to Sony and MS). So for MS, they will NOT be paying ANYWHERE near $500-$600 to build a console with the kind of guts that you and I spending that much to build a computer will have. Bill of materials for MS would fall somewhere in the $300 mark thus giving them at least a $100 buffer for a $400 machine. So they can actually bring out a VERY POWERFUL machine for $400 while STILL being able to maintain the same business model and profit margins of the original launch 360.

4) You obviously WRONGLY assume that Nintendo has the same business model as Sony and MS, thus in you're ridiculously inaccurate make believe land, they all price hardware with similar profit margins in mind. This is wrong because Nintendo builds their systems TO A BUDGET. That means, they have a price point in mind with a specific profit margin on the hardware in mind, then they use components that would fit their pricing model. Sony and MS both SPEC OUT what they want and then think about pricing AFTERWARDS. Both Sony and MS are also perfectly fine with not making money or actually losing a fair amount on the hardware, because they know that they will make it back in the long run with licensing. That's how Sony and MS makes their money, then the hardware later gets refined to lower the production costs and eventually they would even start making money on the hardware. But the important thing to remember is that Nintendo builds to a budget whilst Sony and MS builds to a spec sheet. Simple as that.

So yes, all in all, your post is ridiculous because your basing it on your assumption that all three of these companies operate similarly. The fact that you couldn't even figure out that MS and Sony DO NOT OPERATE like Nintendo, clearly shows your complete incompetence at commenting about this subject.

Bottom line, a $300-$350 Nintendo Wii U is going to fall far behind in specs to a $400 MS or Sony next gen box, due to them building to spec as opposed to budget.
#50Rasputin77Posted 12/7/2012 10:36:53 AM
Nyyark posted...
dart246 posted...
Stealthlys posted...
Can you please cite your sources?


Standard Managerial Based Accounting and GAAP Standards?


Best Post, you should have closed the thread TC.

Haha, exactly. And did you catch the feeble response?

Stealthlys posted...
Except all of you are wrong.

XD... hee hee... e-peen sure can be a b****, can't she? ;)
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