In Theory: Can Microsoft produce a new, cut-price Xbox One?

Discussion in 'Xbox One' started by zt1903, Feb 3, 2014.

  1. zt1903

    zt1903
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    interesting article from Leadbetter at Eurogamer in light of recent rumours of diskless, kinectless Xbox models.

    In Theory: Can Microsoft produce a new, cut-price Xbox One? • Articles • Eurogamer.net

    TLDR version is - no they can't, at least not anytime soon. Only component that could be cut that would give a decent cost saving is Kinect and that probably isn't a good idea.

    Have to say I agree with this sentiment ....

    For better or for worse MS have built the XBO around Kinect and media functionality, they need to show that this really is a differentiating feature set. I still believe the tech is interesting and has potential, but they just haven't made it compelling yet.
     
  2. AudioSlim

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    Yep. My original Kinect is in the loft. If the XOnes kinect ends up in the same place/same usesage it'll kill the xone stone dead. Put simply MS have to make it work or its game over (especially if they did drop it , all of us will be less than happy for sure!)
     
  3. jjgreenwood

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    The market was surprised X1 has sold as well as it has already, even MS themselves.

    Microsoft Reports Better-Than-Expected Results - WSJ.com

    I think a price cut is wishful thinking, but not for any of the reasons in the article. I also think that Sony selling more consoles doesn't automatically mean X1 is struggling. The article itself says that the attach rate was better than ps4, and I assume that doesn't factor in digital sales which I think are going to be more on X1 due to the lack of a PS+ type system.

    I don't think either console is massively expensive to produce so they could cut prices if they chose to. Its not easy to make money out of selling videogames consoles in this day and age and none of the big players will want to erode margins quickly. Consoles have been £200 for as long as I can remember, I guess they will want their products to hold price as long as possible.

    It wouldn't surprise me to see some generous bundles with games - especially if its likely to lead to DLC being bought and microtransactions being used. Graphics cards are bundled with games to push the latest thing so a package of Forza, Titanfall and Kinect Sports: Rivals for example in the autumn would not surprise, its a cheap way to add value and hopefully claw most the money back from selling cars, maps and whatever else goes with it.

    We all treat it as some sort of competition between these companies, and while that is a metric used, what they really want to do is make a profit out of it to keep it feasable. Most gamers will buy both in the end - its just a case of when and how much they will spend when they have it. As a result unless sales are well below expectations then its business as usual - who cares if someone else has sold more if your product is one which is actually being used and achieving a consistent drip feed of profit back to you.

    Personally I'd love a price cut as I want a second one for upstairs.
     
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  4. turk3y

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    disk less I can easily see given the original digital push, save on raw materials packing and shipping and I suspect also save on royalties they no longer need to foot the bill for. They probably had this half designed at reveal, but Kinectless would be shooting themselves in the foot and remove any unique selling point they had, plus the leaked roadmap seem to suggest there is more to come and it all build on top of each other, that could all be pie in the sky but I would not be surprised if there was at least some element of truth or research in there.
     
  5. iwb100

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    I mean an article basically saying "there isn't anything MS can take out of the box to make it cheaper, apart from the OD or the Kinect and both have drawbacks......" is somewhat stating the obvious.

    They are correct that MS can and should just suck up a price cut. I think this will happen personally.

    I'm also glad they make the point that MS aren't sitting there like internet console warriors do, worrying about every little data piece that suggests the PS4 is outselling the X1. They will know that a cheaper console will outsell a more expensive one given in the grand scheme of things there isn't much difference between them. MS know the score, knew the score before launch and still have managed to sell numbers that nobody was predicting before. It is about perspective.

    The problem MS have is the dichotomy of their mass market vision and the current price tag. The current price tag is representative of a mid-range tech device and frankly that is what the X1 is. But given it's primary function is to play games, that isn't going to sell outside of gamers to the mass entertainment market in the volume they'd like as it stands.

    People can talk about "make kinect compelling" but for me it is compelling enough as it stands. There is nothing out there that I know of, where I can use voice to search for "bing Bill Murray films" and get a list of films via a range of providers that I can rent or buy instantly and watch that second. That is hugely powerful as an entertainment device. Add that I can watch my TV through it, instantly switch between functions, and game on it and you're looking at something very marketable to every single person in the world with a living room and a TV who want a box that gives them entertainment. Add into the mix Xbox fitness and KSR (in a month or two) and you've then got a very appealing living room product for the family, the wife, the guy, the kids, everyone, to use. For a variety of purposes. Watching films, listening to music, getting fit, watching TV, skypeing, playing games. All from the comfort of the living room sofa. Most of which you don't even need to get up and pick up a controller to access at all. There is absolutely no way that isn't an attractive package.

    The problem is that the mass-market MS would like to hit, will see it now as simply an expensive games console. If you're interest in game is limited £429 is too much. Way too much. In my view if they marketed these properly and sold them at a lower price point they'd absolutely smash all previous records for sales. But it would involve them taking a hit on the console price OR finding a more inventive way of packaging it all up. Perhaps around a subscription model whereby the base unit price is heavily discounted.
     
  6. messenger

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    My Kinect came out the box on day 1 for an hour & has lived back in the box ever since.

    I bought an X1 purely for gaming & therefore Kinect serves no purpose...
     
  7. Det

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    Tbf Iwb... a lot of that stuff I can do from my phone and using Google which edges out Bing in almost everything search providers can edge each other out on, lol. Add to that I just need to plug in a $35 USB addon to my TV and I can watch all my entertainment from my phone.

    Granted I have to change the source on my TV to watch uh... TV, but the mass appeal just isn't there for one in every home as a media device... yet.

    Personally though, I think the XB1 is brilliant with it (I just wish my cable had an HDMI port so I could watch it through the XB1 and use the cable stuff).
     
  8. iwb100

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    Interesting. Can we explore this? Lets say on a Friday evening you want to watch a film, lets say "Despicable me" for some imaginary (in my case) kids.

    With Xbox the process would be....

    "Xbox on" Xbox Turns itself on along with my TV and Soundbar.

    "Xbox bing despicable me" Xbox finds despicable me, I click on it and view all the X1 apps through which I can watch despicable me with listings for whether I can rent or buy it.

    I then select where I want to watch the film - netflix, Xbox Video, Wuaki or whatever, choose SD or HD and away I go.

    I can also pause and play without moving simply with a voice command.

    The kids get bored half way through so I say "Xbox go to Kinect Sports rivals". We have a quick game of tennis or whatever. After burning off some energy we go back to the app we were watching the film with and finish it. As it finishes I get a skype call from my sister who lives in New Zealand and the kids get to see her on the Telly and chat before they go to bed.

    Now, I know that with google you can find anything and with a tablet you can watch stuff on TV and with apple TV or a smart TV there are elements of the X1 experience you can recreate. But my argument is that nothing that I've used or know of comes close to integrating all that stuff into one place, or making it as seamless or as easy to use. I get that dedicated hardware might do each individual thing "better" in some way. But it isn't replicating that complete living room experience with one device that is voice and gesture controlled and has a vast array of media that is as easy to access as saying "xbox bing......"!

    My wife is a prime example of someone who likes the odd casualish game, likes to use skype, likes to watch films but normally cannot find anything she wants to watch (and she wants to watch them on the TV) and once you hand her a remote or show her a menu completely gets lost and gives up (try finding films on Sky, it isn't easy IMO). But with the X1 all of that is taken away. It is one device, it switches the TV and soundbar on for her (that in itself is an operation) and away she goes. I know it works for that market, I've seen it actually do so.

    I have had friends round who are massively impressed with it and would buy it for the voice/media/casual games like Peggle and kinect for their kids. They love the way it sits under your TV and offers all that stuff up very easily. So I'm sure it works for that market. But the price is too high for that currently and IMO MS simply haven't marketed it into those markets effectively. Sure, initially they were selling to gamers, but now, the average person who might be interested, simply doesn't know about all this stuff. MS have to somehow reduce the price and reach those people.

    That is my view.
     
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  9. Det

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    I don't disagree with you. Especially that bit about "But the price is too high for that currently and IMO MS simply haven't marketed it into those markets effectively."

    So it is essentially still just a gaming console that does media really well, but not well enough for the majority of households to buy into a $500 machine that they will then have to pay another $60 a year to use anything on it. When most households have a PS3 that has access to Netflix and can play 3d Blu-Rays or a Roku player that has access to just about every streaming service ever made, or Google Chrome, etc. And then the people that are flush have a harmony remote that will turn everything on and optimize everything so the ladies just have to push a button and viola, they are browsing their favorite shows.

    It's just not that appealing to the mass market as a media center yet. I bought into it for its media stuff (but then again I don't have all that other extraneous crap like a Harmony remote or whatever).
     
  10. jjgreenwood

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    The mass market has many other options for a media machine so I think Ps4 and X1 have a long way to go to convince none gamers to buy a console for that use. Most prepared to spend good money on that sort of hardware will have Sky and/or high end BR & Smart TV capable of most if not all of the X1/PS4 functionailty.
     
  11. Det

    Det
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    Honestly if they made it so you could record and playback TV then I think it would be a much greater sell to the greater populous.
     
  12. jjgreenwood

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    I doubt it, most the UK already has that functionality through sky/you view or humax. I have it on my tv with a usb hard drive plugged in, can't see anyone buying it for anything other than games and a new toy tbh.
     
  13. Det

    Det
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    I guess what I'm trying to say is if they are going to try and sell it as a media device then it needs to suck up all other media products into it.

    DVR, Harmony Remote, all the streaming apps you would ever need, etc etc. It does some of that stuff already which is a good sign, but there is still a ways to go (like pausing live TV, changing channels, etc which you would still need your remote for)... but if they can get their IR blaster in sync with all the companies out there then it should be closer to what it needs to be. And to be able to record to your 500gb hard drive would be a pretty good start (and let you decide which clips of gaming you want to record via Kinect by saying something like "Yes" or "No" instead of recording every goal or chip in shot which takes up an exhuberant amount of space!)
     
  14. turk3y

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    ahh you want the xbox to be the DVR, I think for most just having access to the DVR we already own would be enough, make it seamless through the xbox and it wouldn't matter if it was local to the xbox or remote (pass thru).

    for price cutting Microsoft stand to make big cost saving with reducing the chip process size, a big cost to them is ESRAM and that will come down a lot when the new chip fabs reduce the die size, this should be a big win for Microsoft as they probably can attack price harder here than Sony in the advances through manufacturing.
     
  15. Det

    Det
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    Ah but I mentioned giving the xb1 more substantial harmony remote esque features so it shouldn't matter if its via the xb1 or the dvr youre renting through your provider.

    Personally tho I already have the xb1 and I share the dvr with other people due to my living situation so it would be ideal if I could record via the xb1 so nothing would be deleted without my knowing. Lol
     
  16. zt1903

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    Not sure I agree with that. Of all the next gen components I would have thought GDDR5 had the biggest potential cost saving through improved fabrication.

    ESRAM and DDR3 are already pretty mature.
     
  17. jjgreenwood

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    I doubt it matters too much market forces will dictate when a price cut happens rather than movements in the price of the chips. If people stop buying either console then they will cut the price, if steam machines look a lot more powerful for similar cost they will cut the price, if a cheap android console starts giving the same kind of experience they will cut the price. There are many scenarios where they might cut the price but they will try and maintain the price as much as they can.
     
  18. tonyk79

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    I think Microsoft are smart with the direction they are taking Xbox 1, Sony have the by gamers for the gamers tag, which is working at the moment but what if those gamers switch to a steambox? I think this why Microsoft are looking at with the XBox services and media features. I don't think they will introduce a new mainstream spec console for a few years, they will do titanfall, halo special editions without doubt.
     
  19. zt1903

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    Don't disagree with you, but you're slightly off at a tangent.

    The point of the article is really that, objectively, the XBO is a more expensive and less powerful console than it's main rival and MS actually have very little room for manoeuvre when it comes to addressing that "problem". If indeed it really is a problem. Both consoles have had very successful launch windows, the question is where it goes from here and whilst there might be a couple of causes for concern for MS the doom is certainly premature and overdone.

    Ditching Kinect is a bit of a Catch 22 for MS as whilst it is realistically the only change they can make to compete on price (without taking a hefty hit on each unit) they end up losing their main USP. Remaining $100 more expensive with a USP few people care about isn't a great option either.

    In the short term what MS have to do (and what I've been saying all along) is to demonstrate that the experience provided by the bundled Kinect is worthwhile. IMHO they still have a lot of work to do on that score - although the technology itself is mostly good and has potential.

    I think the Steambox and Android consoles are red herrings at this stage. Steam box does not look like competing with consoles on price, in the end of the day they are PCs that run on Steam OS and are competing with Windows PCs. Android consoles have no audience as evidenced by the complete failure that is Ouya.
     
  20. turk3y

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    Yes I think GDDR5 might come down more than DDR3 in terms of % so in that regard Sony will do better on main memory but I believe the chips they are using are only in use in the PS4 and perhaps the Titan so whilst they are a huge buyer there might be little competition as no factory without a contract will start production given its niche atm, so it might be harder for them to force the costs down as sellers will not really want to make less profit if they think they have a captive market. I suspect Microsoft might also be in a similar position with their DDR3 given its at a speed that nearly nobody else uses, its got to be a fairly niche chip but I suspect is still slightly more competitive in terms of suppliers than GDDR5 atm.

    The ESRAM is a size function as well as cost and reducing the size will mean a square (I think) function on how much they can get on their wafer and thus chip yields. Kind of like 720 to 1080 being such a massive jump as its a square function pixel wise. Sony will also get this but as they chip they have is smaller to start with the savings would be less. The mature part of ESRAM is what will help them drive the cost down as its a well understood area (just not scale) where they can use multiple chip foundry techniques to reduce die size.


    Its a really interesting time tech wise as it seems AMD is serious with HUMA and the trend to GPU compute is hotting up, it seems just as consoles go x86 we are on the cusp of the next great leap in pc tech, possibly the greatest change since the dawn of the dedicated gpu units in the first place. What happens with console could well be affected by this trend and resulting manufacturing trends as much as other things. Memory may well have hit its peak where we start relying on it less as before it was propping up performance which now looks like it might be less hindered. Will PC go compute heavy and reduce its need for crazy amounts of memory keeping niche chips expensive, will they ditch ddr3 and go full for gddr5 if they can now share that pool anyhow so might as well go for speed. It seems like tech wise consoles are ahead and PC looks like it might actually change for once (slowly). Might they even go esram for the APU and keep ddr3 and a small pool of gddr5 for traditional discrete gpu use, the splatter gun approach lol. This is before all these new techniques like virtual page textures and funky procedural generation takes off which is probably going to become more popular once "legacy" support can be dropped and certain compute and hardware "features" can be relied on.

    Ultimately tho either side are producing these consoles at a profit right out the gate for the first time ever (I believe Sony is, or with the PSN+ they are), we know from historical evidence the console model supports high console subsidization so if they really wanted a price war they need little more than to bite the bullet and subsidize their console, but following the traditional model they have reduced the size and cost over its lifetime to get into profit, now as they have started with profit and the main costs are the chips which they can shrink I think the prospect of price reduction is probably more possible this time than previously.

    Cost is not the issue with the Xbox as your last post points out, if they ditch Kinect for a few dollars saving they will be basically going head to navel with their competition stat wise and thats not a fight they should pick. Disk drive sure sell a unit without it if they want, I would probably have picked that version if it was there at launch and cheaper, digital all the way here. Sony will probably do something similar, they have experience via the PSP and broadband is probably able to support pure digital now over a decent area for those who choose it, choice being the key to a success there.

    Microsoft need Kinect games, at this moment I think just some jumping round hand waving games core gamers will hate just to satisfy the family market and to try to drive improvements in the api and such and then hopefully core games will come. If I was them I would do a remake of police 24/7 or something similar, time crisis would also work due to the movement. I would pay to play that with Kinect, I think it will work well and is somewhere between arm waving sillyness and serious gaming, It should be fairly quick / cheap and will bolster the system.
     
  21. jjgreenwood

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    Apologies they were just generic examples, my point was there are many other pressures which can affect price and they are unlikely to cut the price just because the unit costs less to make for whatever reason.

    I'm also not convinced that the console is much, if any, more expensive than a ps4 to produce. A similar discussion on the sony side of the forum resulted in some saying the GDDR5 chips would not be cheap. We don't know exactly what they cost but do know that a couple of years ago when the HD7970 was released they were around $18 a chip. While I don't believe they cost anywhere near that figure today, its probably fair to say they are several times more expensive than the ddr3 in the X1. The ESRAM I don't know much about so couldn't comment on the cost of it, again I find it hard to believe that this will make the memory cost more than the ps4's gddr in total. Then we have the ps4's more expensive chipset, its more expensive cooling system and case.

    So what we are left with is Kinect and power supplies and whether they are going to be expensive enough to make a difference. The chip is designed by MS inside kinect, the case and cable not especially expensive and the two HD cameras are widely found in phones and other low cost devices. All the tech inside kinect is the sort of stuff which is fairly common - chip apart and likely to fall in price fairly quickly anyway.

    I imagine MS probably spent a lot more on R&D of X1 but I can't see the unit itself costing a huge amount more. Its more expensive at retail and I think its a higher margin product than ps4. I suspect a lot of the press assume its price means it costs MS more to produce, in fact there is very little online to suggest anyone knows what it costs apart from some speculation by isuppli.

    The biggest problem with the article, bearing in mind my thought process, is the assumption that kinect represents a huge cost to the device. There is no way of knowing that this is true and considering I can buy a cheap hd camera phone for £99 including retailer margin on Pay as you go which includes screens and lots of third party chips is speculating at best. Also if kinect were removed, then logically X1 should be much cheaper than ps4 as it doesn't have all the fancy gddr5, cooling systems and extra graphics chips as mentioned in the article. This suggests to me that it is off target and nothing more than click bait because the assumption that a kinectless X1 selling for the same price as a ps4 based on the logic of the article is plain wrong.

    All this leads me to conclude MS prices X1 at £429 because it thinks it can sell it at that because it has enough value to deliver. The price isn't based on how much it costs to produce, but rather what MS think they can get away with. Its for those reasons that I think the market will dictate the price rather than whatever the hardware costs MS.
     
  22. jjgreenwood

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    after today you may have spoken too soon

    Microsoft promises to support Killer Instinct after Amazon buys its developer • News • Xbox One • Eurogamer.net
     
  23. alphaomega16

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    Its the only reason I have not got an Xbox One yet.
     
  24. King Tones

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    I would buy a Diskless version of the X1
    Not a Kinectless one though.
     
  25. jjgreenwood

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    I'd buy one without the disc and without the kinect - would be great for my study
     
  26. col_edinburgh

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    I'll only consider buying an XB1 when it comes with a 3.2-GHz PowerPC Tri-Core Xenon CPU, 512MB GDDR3 RAM and HDMI 1.2a.
     
  27. Boozehound

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    Was that a joke? Because if it was then it's hilarious.
     
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  28. djstu_d

    djstu_d
    Active Member

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    As and when external/network storage is sorted out, how's about a box with no disk or hard drive ???

    I'd buy one !!
     
  29. zt1903

    zt1903
    Distinguished Member

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    We have a product for you, it's called the Xbox360

    :rolleyes:
     
  30. turk3y

    turk3y
    Well-known Member

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    warning warning, we have Don hiding in our midst..... it all falls into place. ZCT is DON ! :p
     

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