System Costs

One thing that a surprising number of people seem to overlook is the idea that consoles are built to take a loss on the hardware itself.  If the Xbox 360 retails for $299, it may very well cost Microsoft $399, or even more.  This has been the way consoles have been manufactured for quite some time now, and it has not changed with the latest generation of consoles. 

However, given the very high system costs of the original Xbox, it isn’t surprising to see that Microsoft is quite concerned with keeping costs down to a minimum this time around.  There are a number of decisions that Microsoft has made in order to limit their loss on the 360 hardware.

First and foremost, Microsoft owns the IP in the Xbox 360 and thus they can handle manufacturing on their own without having to re-negotiate contracts with ATI or IBM.  It remains to be seen how much of a money saver this will be for Microsoft, but it does present itself as a departure from the way things were done the first time around for the folks at Redmond. 

Assuming Xenon is nothing more than 3 PPEs put on the same die coupled with twice the L2 cache, it looks like Xenon is a smaller chip than Cell. 

The Xenos GPU features a higher transistor count than the RSX (332M vs. 300.4M), but a lower clock speed. 

Microsoft didn’t skimp much on the CPU or GPU hardware, which isn’t surprising, but it is in the auxiliary hardware that the console ends up being cheaper in.  The best way to understand the areas that Microsoft didn’t spend money in, is to look at the areas that Sony did spend money in. 

The Xbox 360 is using a tried and true 12X dual layer DVD drive, probably very similar to what you can buy for the PC today.  A very popular drive format with mass produced internals is a sure fire way to keep costs down.  Sony’s solution?  A very expensive, not yet in production, Blu-ray drive.  As we mentioned earlier, the first Blu-ray players are expected to retail for more than $500.  The PlayStation 3 isn’t going to be successful as a $800 console, so we’d expect its MSRP to be less than $500, meaning that Sony will have to absorb a lot of the cost (initially) of including a Blu-ray player, until production picks up. 

Both the Xbox 360 and the PS3 feature wireless controller support, although Sony supports a maximum of 7 Bluetooth controllers compared to Microsoft’s 4 2.4GHz RF controllers. 

The PS3 also ships with built in 802.11b/g and three Gigabit Ethernet ports so the system can act as a Gigabit router right out of the box.  Adding wireless support isn’t a huge deal, but the physical layer as well as the antenna do drive costs up a bit.  The same goes for getting controllers to drive the three GigE ports on the unit. 

Sony also offers built in support for more USB 2.0 ports (6 vs 4), media card slots (Memory Stick, SD and Compact Flash) where the 360 has none and two HDMI outputs where the 360 only offers component.  Again, not major features but they are nice to have, and do contribute to the overall price of the system. 

The one difference that favors Microsoft however is the inclusion of a 2.5” HDD with the Xbox 360 console; Sony’s hard drive will be optional and won’t ship with the system.

In the end it seems that Microsoft was more focused on spending money where it counts (e.g. CPU, GPU, HDD) and skimped on areas that would have otherwise completed the package (e.g. more USB ports, built in wireless, router functionality, flash card readers, HDMI support in the box, etc...).  Whereas Sony appears to have just spent money everywhere, but balanced things out by shipping with no hard drive.

Storage Devices Final Words
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  • calimero - Wednesday, July 6, 2005 - link

    http://arstechnica.com/news.ars/post/20050629-5054...

    btw Anand article was "full of shit" (sorry but that is the right phrase) and it's not odd that Anand pull it. It's quite embarassing for Anand; someone already told: one thing is to write test of CPU speed and speed of graphics card in games... and another to analyse CPU architecture.
  • jwix - Tuesday, July 5, 2005 - link

    Creathir - the article was reposted on other forums around the net. Here is the story in summary - Sony & Microsoft have both overhyped the processing power of their cpu's by using clever marketing speak. It turns out the processor designs are uneccessarily complicated, inefficient at crunching today's game code, and unlikely to be useful when game code finally becomes fully multi-threaded in the coming years. Why microsoft and sony didn't go with an Intel or AMD design, I don't know. The article speculates that both companies wanted IP rights to the cpu, maybe that's the reason.
    The GPU's on the other hand look plenty powerful. They should both be relatively equivalent in performance to the R520 and the current 7800 GTX.
    Bottom line - the new consoles will be quite powerful compared to the previous generation. However, PC's will still be more powerful, and wil remain the platform of choice for high end gaming. Something I was glad to read as I just built a new pc.

  • steveyoung123456789 - Friday, December 9, 2011 - link

    wow your so smart! faggit
  • creathir - Saturday, July 2, 2005 - link

    jwix:
    I had read a good portion of the article, but had been pulled away (thought to myself I'll just reread it later) and was upset to find it was gone. I have never seen this here at Anandtech, and Anand has not made a single comment on his blog about it. I suppose some fact was incorrect? Maybe Sony/Microsoft decided they would SUE him over the article? I bet the most logical answer is this, Tim Sweeney saw the article, and even though Anand referenced the "anonymous developer", he had earlier mentioned in his blog he had been waiting for some answers from Tim. I would bet this "outed" his source, much like the LA Times outed their source recently for a Grand Jury. This outing probably was followed by a request by Tim to pull the article. I would have to bet we will see it soon enough, reworked, reworded. Whatever the case, Anand, it was a good article, you should be sure to repost it.
    - Creathir
  • steveyoung123456789 - Friday, December 9, 2011 - link

    o someone can read!! yay!
  • linkgoron - Thursday, June 30, 2005 - link

    blckgrffn, THIS IS NOT i repeat NOT the article you think it is.
  • blckgrffn - Thursday, June 30, 2005 - link

    Yes it is back up! :D

    Nat
  • jwix - Thursday, June 30, 2005 - link

    Last night, around 10:00pm EST, I surfed over to the Anandtech home page to see what was happening. I was greeted by Part II of the article (Xbox 360, Sony PS3 - a hardware discussion). Did anyone else read this article last night. I was only able to read the first 2 pages before the article was pulled off the website. Why would they post it and then pull it so quickly? And why has not been reposted since?
    The story it told was unbelievable - basically, the floating point processing power of both the Sony and Xbox processor was less than half of your average Pentium 4. Anand went into detail on how and why this was the case. His sources apparently were confidential, but definitely industry insiders (ie...game developers). I wish I could have finished reading the article before it was pulled. Did anyone read the whole article?
  • ecoumans - Thursday, June 30, 2005 - link

    Physics Middleware will be Multithreaded and heavily optimized for Cell's 7 SPE's. This makes life easier for gamedevelopers, and it changes the story about CPU usage... Same story for sound etc.
  • Houdani - Tuesday, June 28, 2005 - link

    29: In order to turn off the "sponsored links" go to ABOUT in the top left menu and turn off INTELITEXT.

    I think this setting is stored in a cookie, so you will need to do this everytime you clear your cookies.

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