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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  • tipoo - Wednesday, August 6, 2014 - link

    That was such bullshit. RSX was worth under 200Gflops, Cell about the same and much harder to extract that much from, Xenos was over 200, Xenon was around 100. Nothing was near the terraflop range except in marketing bullspeak.
  • LanceVance - Saturday, June 25, 2005 - link

    #59

    "Does every xbox game needs to be playable? No."
    "How many of you still play your old games? Market research shows not a lot."

    Backwards compatibility is a feature. It's just like any other feature on a mass market consumer product. Some people value it and others don't.

    You clearly don't value that and won't consider it when making consumer decisions.

    Other people clearly DO value that and you are trying to persuade them not to. That's none of your business. If people value a specific feature they have every right to consider it in their buying behaviors.

    Sorry, I know this post has now gone way off topic from the original article of technical analysis. Beautiful article; but any open forum on such a political topic is doomed to degenerate into this.
  • knitecrow - Saturday, June 25, 2005 - link

    software emulation is difficult and takes a lot of man power to get right.

    The main advantage for microsoft was that they didn't have to stuck with poor business and engineering design choices of the past.

    Does every xbox game needs to be playable? No. I don't care for games like "big rigs"
    I abviously want halo to work, but also the lesser known good titles on xbox ... like Panzer Dargoon Orta, Kingdom Under Fire, Otogi 1 & 2 and so on.

    How many of you still play your old games? Market research shows not a lot.I have an 80+ games library for the xbox. I don't mind.
  • BenSkywalker - Saturday, June 25, 2005 - link

    milomnderbnder21-

    They are flipping consumers off. Sony and Nintendo at this point are both adding costs to their consoles to incorporate hardware to make certain that their systems have full compatability with the prior generation. MS has decided that you and I are not good enough to offer that same assurance. They have decided to save themselves a couple of dollars and render useless all of their games they can't get running on their new platform so they can save a few dollars. They will take a shot at software hacks- if they don't work we are out of luck. They are also stopping production of current gen XBox hardware. I have about thirty games for my XB currently, what do I do with them if my XB dies and they aren't supported by XB360(which there is no assurance they will)? I keep my legacy hardware around, back to my 2600, and my games.
  • Olaf van der Spek - Saturday, June 25, 2005 - link

    > Compared to the built in 5X CAV DVD drive in the Xbox, the hard drive offered much faster performance. With the Xbox 360, the performance demands on the hard drive are lessened, the console now ships with a 12X CAV DVD-DL drive.

    Aren't all read-only DVD drives dual-layer?
  • Starglider - Saturday, June 25, 2005 - link

    I'm a game programmer and I take issue with the statement on page 4 that BSP collision detection benefits from branch prediction. It doesn't; it's one of the rare types of code where the branches are effectively impossible to predict. The algorithm /does/ benefit heavily from speculative execution, but as I understand it neither the XBox360 or the PS3 are capable of this. As such this is one area where PC style processors have an advantage; neither console is going to beat a modern PC at SuperPi.
  • devilzblood - Friday, June 24, 2005 - link

    altho this is my first post at anandtech, i have been reading ur articles from the geforce 3 launch.
    newayz.....im posting here coz im wondering if neone knos this.....what degrees do Anand and Derek hold?? they seem to be such a bank of information, i never thought it was humanly possible to know so much about computers..needless to say im impressed by u people..and all i would like to say about the article is that it was an informative and enjoying read
  • milomnderbnder21 - Friday, June 24, 2005 - link

    #46

    MS is by no means "flipping off it's supporters" with regards to backwards compatibility. They have flat out stated that it is there goal that EVERY Xbox game be compatible on the 360, but they simply cannot guarentee it. In any case, look for a majority of them to be so. And if they can't get everything working, I'm not going to miss outlaw golf on my 360...
  • MDme - Friday, June 24, 2005 - link

    #50

    Sony WILL support 1080p. They are supporting it so that they can BRAG about it. It's all about the hype, even if they only have 1 game supporting it, they will BRAG about it. heck, if you really think about it, if sony played a video (H.264) at 1080p then ran the game at 720p they will still claim, WE HAVE SUPPORT FOR 1080p. It's all marketing. Even X360 can claim this.
  • finbarqs - Friday, June 24, 2005 - link

    bla bla bla, which one is better?

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