I don't understand

[Gamekid]

Some things that I don't understand fully 100%

1) I have heard that developing for the ps3 is getting too costly even though there is newer technology in the machine. Why is this?

2) When launch day comes around, Sony like Microsoft and Nintendo will lose money on every console that is made. If people buy 2 million ps3's on launch day, assuming that will happen, then how can Sony lose money. If ps3's are sold, then Sony makes money, they wouldn't lose money. Explain.

[AV_Integrated]

1. There is tens or hundreds of millions of research and development that goes into a new game console. That is an expensive thing to develop and the company won't get any of that money back until the games for the system start to sell in earnest.

2. The hardware for the game system at COST runs about $800 or so (per estimates) which means that Sony sells each unit at a net loss of about $300 per game console. 2 million units, losing $300.00 per unit = $600,000,000 in losses. They make up some of those losses immediately on game sales and add-ons like extra controllers or cables to go with their gaming system. But, typically 5+ games need to be sold per console on average to make up for the losses on the actual gaming system. This is normal and X-Box 360 is sold at a hardware loss and Nintendo will be as well.

[Gamekid]

To make some strong points:

1) It is true that the ps3 is an expensive console. The CPU chip alone is about 4 million dollars in the making due to the fact that the chip is eight layers of metal I think. The materials required to make the ps3 aren't cheap plus the console has to be imported over here to the states so that adds to the cost.

2) You're saying that if the ps3 sold for $800.00 then sony woudn't lose money on every ps3? We are not charged the full prize as sony knows that if the price is too high like $800.00 then no one will buy it so they set the price at $500.00, knowing that they will lose $300.00 per console. It costs $800.00 to make a ps3?

[Applefiend]

Developing for PS3 isn't as costly as people think, developing a AAA game for 360 or PS3 is costly full stop.

People bash PS3 because it's got those 7 SPUs, but PS2 development has always been about parallel programming, so these guys have been coding for these kind of systems for a long time.

The difficult to code for tag has been put on PS3 mostly be people coming from a PC background. PC and PS3 architecture are very very different, but the gaming world doesn't revolve around PC... It kinda revolves around Playstation and Gameboy if anything... Getting your serial PC game running fast on a parallel based gaming console is a huge pain in the ass.

Actually you could use the same argument to bash 360. How many PCs do you know with three processors and a unified shader architecture/EDRAM...?

$800 comes from analyist estimates based on how much Sony are expected to lose in the first year. It may be on the money, who knows what Sony are paying for parts except Sony.

But as far as losses goes PS2 is very different from PS3. PS2 you buy a game... Sony get about 5 bucks, more on own brand games, that's that. PS3 is very different, it's based around an online marketplace. People buying downloable games, songs for singstar, extra levels for games, yadda yadda. Lots of ways to get your losses back on PS3.

[phloyd]

The discounting of the player to get the users out there is just like the discounted or free cellular phones they hawk to get you to use their service (I can't wait until they pay you to take the phone ).

Software is effectively a subscription service, especially on the game platforms. The cost of each copy of each title is very small. They make up their development costs and then the rest is pure profit.

I once worked at a largely software company and they always talked in revenues because they didn't want us to see how revenue and profit was close to the same number

[partridge]

On the developing side it is worth noting that Sega have pretty much made the PS3 their preferred system as it used Nvidia developed graphics chips, and Nvidia also make the chips that Sega uses in its arcade games machines.

A UK mag reports one Sega developer claiming that the PS3 version of Virtua Tennis has the graphical edge over the 360 version. Simply because they are finding it easier to develop for.

So it's a nonsense when you read that PS3 is hard to code for, it all depends on the developer and their experience.

[Shadowself]

Originally Posted by Gamekid

Some things that I don't understand fully 100%

1) I have heard that developing for the ps3 is getting too costly even though there is newer technology in the machine. Why is this?

The issue here was the Cell processor. Traditional development environments, compilers and linkers (even with a final stage compiler from IBM -- the house doing the Fab work for Cell) were not well suited for Cell's requirements. This caused a LOT of extra work for developers.

Then along about a year ago, IIRC, IBM started shipping a development environment tailored to Cell. This was a huge upgrade/shift in the development environments used for Cell and eased the burden on developers greatly.

While it is still not a trivial thing to develp for Cell, it is no where near as difficult as it was more than a year ago. The problem is that virtually all the guys out there knocking the PS3 are pointing to (or still retelling) statements made by developers from over a year ago.

It's long past time for the rumors about how it is nearly impossible to program for the Cell processor to just die.

Originally Posted by Gamekid

2) When launch day comes around, Sony like Microsoft and Nintendo will lose money on every console that is made. If people buy 2 million ps3's on launch day, assuming that will happen, then how can Sony lose money. If ps3's are sold, then Sony makes money, they wouldn't lose money. Explain.

It's the old Shick schtick (sorry). Loose money on every razor, but make it up on the blades.

Over the expected 10 year life of the PS3 Sony will more than make up for the losses due to selling the initial 10-15 million at less than what it takes Sony to make them.

I would expect that by the end of next year Sony's cost to produce the PS3 will be at or near the break even point. Then Sony will be making money off the games, either through games Sony has developed and sold by them or off royalties from other game developers.