FILTHY J NASTY
07-09-2007, 06:39 PM
Here’s a trade secret that Microsoft is unlikely to publicly acknowledge.
Sony’s cutting the price on the PlayStation 3. How will Microsoft react? We’ll find out soon. But a key part of the strategy is going to be a project code-named Falcon.
Falcon is the name for the latest internal electronics in the Xbox 360. It will have an IBM microprocessor and an AMD/ATI graphics chip that are manufactured in a 65-nanometer production process. These are cost-reduced chips that do the same thing as their 90-nanometer predecessors, but they’re smaller.
With smaller chips, Microsoft gets a bunch of benefits. They won’t generate as much heat. So the risks of overheating — one of the main reasons behind Microsoft’s billion-dollar write-off for repairs and extended warranties — are much lower. The chips may also cost half of what it took to make them before because they use less material and fewer manufacturing steps to produce.
Everyone knows that console makers cut the prices and costs on their consoles over time. But you may not be aware that the primary chips – microprocessor, graphics, and the Ana video processing chip – are the bulk of the cost of the machine. Microsoft started making the Xbox 360s in August, 2005, with a 90-nanometer process. It is overdue to switch to the newest technology, 65 nanometers, but that day has finally come. It may be some time — a year, maybe two — before it moves on the a 45-nanometer process.
But it’s worth it. I recall that Ken Kutaragi said that by moving along the semiconductor manufacturing cost curve with the PlayStation 2, Sony was able to reduce the size — and therefore cost — of the PlayStation 2’s original chips to just 13 percent of the original over the life cycle of the PS 2.
Link-[Full Story] http://blogs.mercurynews.com/aei/2007/07/microsofts_next_move_code-name_falcon.html
Also:
Wedbush Morgan Securities analyst Michael Pachter stated in a note to investors today that Microsoft (http://forums.xbox-scene.com/index.php?showtopic=611866#) will announce an Xbox (http://forums.xbox-scene.com/index.php?showtopic=611866#) 360 price cut tomorrow at the start of the revamped E3 Media & Business Summit, which takes place all week.
He said that the price cut will affect all three Xbox 360 models. The $299 Core pack will drop to $249; the $399 Premium pack will drop to $349; and the recently released $479 Elite model will drop to $399.
Such a price cut would be a likely move for Microsoft following the PS3 (http://forums.xbox-scene.com/index.php?showtopic=611866#) pricing announcement today. Sony dropped the price of the 60GB PS3 from $599 to $499 and announced an 80GB PS3 with MotorStorm bundled for $599. The price drop appears to be in response to lower-than-expected sales of the console.
Link - http://www.next-gen.biz/index.php?option=com_content&task=view&id=6299&Itemid=2
Sony’s cutting the price on the PlayStation 3. How will Microsoft react? We’ll find out soon. But a key part of the strategy is going to be a project code-named Falcon.
Falcon is the name for the latest internal electronics in the Xbox 360. It will have an IBM microprocessor and an AMD/ATI graphics chip that are manufactured in a 65-nanometer production process. These are cost-reduced chips that do the same thing as their 90-nanometer predecessors, but they’re smaller.
With smaller chips, Microsoft gets a bunch of benefits. They won’t generate as much heat. So the risks of overheating — one of the main reasons behind Microsoft’s billion-dollar write-off for repairs and extended warranties — are much lower. The chips may also cost half of what it took to make them before because they use less material and fewer manufacturing steps to produce.
Everyone knows that console makers cut the prices and costs on their consoles over time. But you may not be aware that the primary chips – microprocessor, graphics, and the Ana video processing chip – are the bulk of the cost of the machine. Microsoft started making the Xbox 360s in August, 2005, with a 90-nanometer process. It is overdue to switch to the newest technology, 65 nanometers, but that day has finally come. It may be some time — a year, maybe two — before it moves on the a 45-nanometer process.
But it’s worth it. I recall that Ken Kutaragi said that by moving along the semiconductor manufacturing cost curve with the PlayStation 2, Sony was able to reduce the size — and therefore cost — of the PlayStation 2’s original chips to just 13 percent of the original over the life cycle of the PS 2.
Link-[Full Story] http://blogs.mercurynews.com/aei/2007/07/microsofts_next_move_code-name_falcon.html
Also:
Wedbush Morgan Securities analyst Michael Pachter stated in a note to investors today that Microsoft (http://forums.xbox-scene.com/index.php?showtopic=611866#) will announce an Xbox (http://forums.xbox-scene.com/index.php?showtopic=611866#) 360 price cut tomorrow at the start of the revamped E3 Media & Business Summit, which takes place all week.
He said that the price cut will affect all three Xbox 360 models. The $299 Core pack will drop to $249; the $399 Premium pack will drop to $349; and the recently released $479 Elite model will drop to $399.
Such a price cut would be a likely move for Microsoft following the PS3 (http://forums.xbox-scene.com/index.php?showtopic=611866#) pricing announcement today. Sony dropped the price of the 60GB PS3 from $599 to $499 and announced an 80GB PS3 with MotorStorm bundled for $599. The price drop appears to be in response to lower-than-expected sales of the console.
Link - http://www.next-gen.biz/index.php?option=com_content&task=view&id=6299&Itemid=2