Tech Focus: Can Sony Make a £99 PlayStation 3?

Digital Foundry breaks down the challenges facing Sony with its upcoming console revision

Good news, bad news. According to a recent report from VG247, the latest revision of the PlayStation 3 could well be released at a surprisingly price-point - £99 is being suggested, somewhat optimistically - but the platform holder won't reveal the new console at Gamescom, looking instead to sell-through more of its existing inventory. Our sources corroborate the Cologne no-show and while the entry-level 16GB model will be "aggressively priced", we have no confirmation on just how low that price-point will be.

The upcoming CECH-4000 model is definitely a very big deal for Sony however, representing the company's best chance to grab current-gen market share before more the technologically advanced replacements arrive next year. More than any other PlayStation 3 model released to date, this revision is all about getting as many boxes in homes as possible, and based on leaked photography from Brazil's equivalent of the FCC, we have a pretty good idea of what Sony has done to get its build costs down to a minimum.

"The new model introduces a number of new cost-cutting measures, but it's the move towards flash memory for the entry-level unit that offers the most potential for a meaningful price-cut."

Superficially, overall size issues aside, the most obvious change to the core PlayStation 3 design comes from a top-loading Blu-ray drive, replacing the more expensive slot-loader we've seen in all PS3s to date. Curiously, the lid appears to be raised vertically in relation to the rest of the top elevation, suggesting that perhaps it slides across the face of the unit, rather than popping up. Other than that, the basic hardware make-up looks to be much the same as the existing Slim: dual USB ports remain (Sony couldn't really cut-down any further here) while the reverse of the unit retains the multi-AV port, HDMI socket, Ethernet and Toslink digital audio outputs.

A look at the power supply rating offers us our first hints of what may - or may not - have changed within the console: Sony has reduced the load it is capable of down to 190W from the current Slim's 200W. That's a very meaty PSU bearing in mind that the launch version of the Slim - which has since been made much more efficient - only drew a maximum of 105W when I first tested it back in 2009. It also suggests that the core of the PS3's components hasn't changed that much from the existing Slim, which currently uses a 45nm Cell CPU combined with a 40nm RSX graphics core. Combining both chips into one - as Microsoft has done with the Xbox 360S - or dropping either component down to a lower fabrication node would surely have brought about more comprehensive power-savings, allowing Sony to incorporate a smaller, cheaper PSU into the new machine.

However, the various interconnects between PS3's two types of RAM, and the complexity of Cell itself makes integrating GPU and CPU into one part immensely challenging, and while a 32nm shrink for the main processor could be achieved, there appears to have been some uncertainty if it would happen at all. For RSX, the next logical shrink is down from 40nm to 28nm, but with production on the lower process still ramping up, right now it's probably more cost-efficient for Sony to stay where it is.

So far, what we seem to be looking at is a machine that rolls up all the gradual changes Sony has made to the Slim since its 2009 debut, but with only superficial changes to the chassis, offering limited cost-savings. So it's safe to say that the notion of a £99 PlayStation 3 doesn't really add up at this point. However, the most fundamental difference comes from revisions to the attached storage. According to the leaked documentation, three different SKUs are in the offing: 16GB, 250GB and 500GB. To begin with, many thought that the 16GB option was a typo, and that the entry-level PS3 CECH-4000 would be a 160GB model that's more in line with the current offerings on the market.

However, Sony's strategy here is to mitigate its losses on mechanical hard drives - which have seen prices double since the Thailand floods which wiped out HDD production volume last year - by replacing them with flash memory. In a world where branded 16GB USB flash drives cost around £7, the potential for cost savings here is enormous, especially when 160GB HDDs aren't actually that much cheaper than the 250GB and 500GB units. This is where the lion's share of the savings originates from, and it's a masterstroke from Sony, creating the perfect entry-level offering for those interested in light gaming and media streaming from NetFlix, Lovefilm etc, with just enough storage for handling a few playable demos and the odd game.

Sony's leaked documentation confirms that the entry-level unit is identical to its stablemates still using mechanical hard drives, so if the 16GB of flash is too constrictive, there's no reason why the user can't simply add a hard drive in their own time. For the more committed gamer, such an upgrade would be inevitable sooner or later. Factoring in the PS3's use of mandatory game installs, which sometimes even reach 8GB, combined with the requirement for a cache for games (our guess would be that this would be around 1.5GB to 2GB of space unusable to the owner), the lack of storage could be a real issue.

"Sony is in an excellent position to reduce costs and increase value with free games via a bundled PlayStation Plus subscription, but Xbox 360 is the console more likely to breach the £99 price barrier."

Questions remain over how the 16GB flash has been implemented in the new machine. Microsoft's approach is simple - for its 4GB model, the chip is mounted directly onto the motherboard. Sony could follow the same approach, or it could simply source 16GB drives that link directly to the existing SATA port for the hard drive. There are plus and minus points for both approaches, but I would hope that Sony opts for the former, at the same time opening up the system completely for installing games onto attached media, as Microsoft did with its own USB storage update. Hacked PS3s already do something very similar, and there's no reason why it couldn't be achieved in a secure manner officially - there could also be performance benefits for many games by allowing them to run from flash media, or at least hosting install content there.

Clearly, the changes brought about the CECH-4000 revision could extend beyond just the inevitable price-cuts, but can Sony truly afford a £99/$150 entry-level price-point? Looking at the bare figures, it seems unlikely. To kick off, £99 and $150 may be equivalents in exchange rate terms but in the real world, things are very different - mostly because a UK retail price includes 20 per cent VAT, whereas a US MSRP doesn't factor in sales tax. To put things into perspective, we would be looking at Sony manufacturing, packaging and shipping the new PS3, and offering retail some kind of profit margin at a base cost of £83 before VAT is added. This stretches credibility somewhat: there's little evidence that the new model features the smaller, cooler CPU or graphics core that would be required in order to significantly cut costs.

However, looking at the price of the 4GB Xbox 360, it's clear that a budget-orientated SKU can be sold at a very cheap price: recommended retail price for this unit is £139.99, but a quick look at Amazon price history demonstrates that prices fluctuate considerably - in May, it was available for £115, and just a couple of weeks ago, the unit could be bought from UK online retailer Zavvi for around £113.

In the short term at least, matching the existing Xbox 360 price-point with a higher value offering (more storage, Blu-ray) makes sense, leaving room for retailers to fight it out in the race to the bottom, if they should so choose. Sony can also introduce extra value by bundling in something along the lines of a three-month PlayStation Plus subscription - a zero cost in terms of physical goods, and effectively offering newcomers to PlayStation 3 an impressive range of discounts and actual free games. Again, this is something that Microsoft is unlikely to offer.

However, in the race to the bottom, it's the Xbox 360 that is best equipped to reach a £99 price-point sooner. DVD drives remain cheaper than Blu-ray, and in creating the 360S, Microsoft already did all the hard work in shrinking down the major components: CPU and GPU are already in one package at 45nm and a 32nm process reduction seems feasible. In the most basic terms, the 360 is significantly less complex design than the PS3. With selected retailers already in the habit of knocking as much as £25 off the entry-level RRP when it suits them, it's surely only a matter of when - not if - the Xbox 360 crosses the £99 threshold.

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Latest comments (20)

Bruce Everiss Marketing Consultant 9 years ago
The clunky fundamental design of the PS3 coming back to haunt Sony.
This is too little, too late. And the games will still be £40. The market has moved on.
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Dan Howdle Head of Content, Existent9 years ago
Maybe Iím being a little naÔve here, but at this stage in a consoleís lifespan, who exactly thinks itís a good idea to now go out and buy one when they have dismissed it as too expensive for the last seven years? Certainly nobody who is into games enough to outlay worthwhile monies on software and services.

If Sony takes a loss on these, it surely cannot make that money back through the once-a-month gamers who this type of deal is likely to attract?

What am I missing here?
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Curt Sampson Sofware Developer 9 years ago
Offering a couple of months of free PlayStation Plus certainly makes sense: if you start the consumer out with more than half a dozen free AAA full games it seems to me he's going to be pretty tempted to spend $5 a month to keep that from going away.

But I'm not sure how much sense it makes on a 16 GB console, where you can have only oneóor maybe two, if you're luckyóof those games downloaded at the same time.
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Andrew Goodchild Studying development, Train2Game9 years ago
@Dan, someone who has held off either HD console may not be worth much recurring income, but there are plenty of people with either an Xbox or ps3 who would by the other when it is down in price, and who do spend money on games and services.
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Dan Howdle Head of Content, Existent9 years ago

Not sure I agree. Never met such a person myself. Everyone I know either has both or has no interest in the other console, or like me used to own both but sold one because there was not enough unique content to justify it.

If anyone did as you say, they may do so only to play Uncharted and Heavy Rain. No Xboxer gives a hoot about the inferior Gran Turismo 5. Sony would make no money on such a catch-up, especially since most would do so via the pre-owned route.

Edited 1 times. Last edit by Dan Howdle on 25th July 2012 12:14pm

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Robin Clarke Producer, AppyNation Ltd9 years ago
@Dan Howdle

Same as whenever a console's price dips into impulse buy territory. People who want a cheap Blu Ray player and to catch up on the PS3 games they've missed will snap it up.

I seriously doubt they'll be pricing it at a loss either.
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Dan Howdle Head of Content, Existent9 years ago

Which I guess was my original point. How can this not be a loss? And if it is, what on Earth is Sony doing?

Edited 1 times. Last edit by Dan Howdle on 25th July 2012 12:39pm

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Aleksi Ranta Category Management Project Manager 9 years ago
For a games console, blueray player, entertainment box, a £99 pricetag would be a good value proposition. Never underestimate the power of pricing.
And one might look at it as getting people into the playstation family in preparation for the next-gen, for £99, which isnt really what they are paying for each new consumer. At break even point, it seems like a fairly valuable deal for sony.
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not to mention a massive back catalogue of games, this could help stem the haemorrhage at Sony and even provide a healthy profit. The games afoot and all to play for!
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John Jennings Senior Producer, Machinegames9 years ago
The PSone and PS2 Slim sold in vast numbers. It must be worth the gamble that it'll work a third time too
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Thomas Luecking9 years ago
I am one of those customers who would buy a PS3 for 99 bucks. If The Last of Us will deliver it will be a no brainer for me. Plus a great line up of exclusive titles such as Heavy Rain, Uncharted, God of War, Shadow of the Colossus, which will only cost 15 - 20 bucks each... Especially great during next summer, when the Nextboxes have been announced and no AAA title will come out for a while.

Edited 1 times. Last edit by Thomas Luecking on 25th July 2012 4:32pm

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Antony Johnston Writer & Narrative Designer 9 years ago
Dan, the PS2's last hardware rev came after the PS3 was launched. The PS2 is still being sold around the world, mostly in the BRIC countries, and by now Sony's economies of scale on the PS2 must be the envy of Henry Ford himself.

Don't underestimate the buying power of the market outside our tiny English-speaking world.
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Dan Howdle Head of Content, Existent9 years ago

Now that I can agree with, so why all the talk of it swinging the balance in the console war and yadda, yadda?
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Tom Kleinenberg 3D Artists 9 years ago
I think it may well be worth Sony's while, they're playing a long game. Although there are a lot of countries moving over to downloadable games, there is still a market for disc-based games where broadband hasn't got the same level of adoption.

Of course it $150 dollars is also a much more attractive price for somebody like me who hasn't joined this console generation but could be tempted into buying now. If I get one "new" title (FIFA 13 say) and 2 or 3 platinum titles, Sony's already made a profit they wouldn't have otherwise
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Andrew Jakobs Lead Programmer 9 years ago
@Bruce: You're a little bit biased because of the mobile-apps you make, but the design of the PS3 isn't clunky, it might be a bit difficult yes, but for a real developer it isn't a real problem (these days a lot of developers have become soooo lame and lazy, they don't know how to develop unless it's with a garbagecollecting language or some other crap)..

It isn't too late, the gap between the PS3 and the xbox360 is sooo small especially if you consider the much higher price of the PS3, AND the almost 1-1.5year later release, and yet it's only a couple of units behind. That says to me there is nothing wrong with the PS3, it sells great.. Well, yes games may be much more expensive than those crappy mobile games, but they are still in a completely different league. I (and a lot of other gamers) still prefer the much MUCH better real controls of the dualshock than ANY touchbased onscreen controls for any action/platform game.

I would suspect the PS3 to go around for 99 pound exclusive tax, but even including tax that's still a bargain, let's not forget there aren't many blurayplayers out there that sell below the 99 pound mark, and certainly none which can also play a lot of games.. As a mediaplayer it's still lacking (and I can't seem to understand why Sony isn't supporting mkv on the PS3 even though they support it in most of their new devices, so I guess it must be a licensing thing as they haven't licenced the latest DivX which supports mkv for the PS3), but in combination with a mediaserver it's still a great mediaplayer.

It's still at least a year away before we see any of the real nextgen consoles (I don't call the Wii-U a next gen console), so this new unit can still sell a lot.. For me the only downside of this new model is the toploader instead of a slotloader, but then again, for me it's not really interesting as I still have my 80GB Phat, which I still think is much MUCH nicer than the slim or the new one..
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Dominic Jakube Student 9 years ago
Another market is replacements for early models that have failed, users could even hopefully re-use their existing hard drives.My launch 60 GB fat model died(yellow light of death) a couple of years ago and its replacement slim model optical drive is starting to skip occasionally, so a cheap replacement would be appreciated.
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Greg Wilcox Creator, Destroy All Fanboys! 9 years ago
@DAn: a LOT of people on budgets (including families who don't give a hoot in hell about console wars or being the first on the block to have the best system) buy into consoles when they reach that sweet spot. Try working retail one day or asking those who've worked in retail and see for yourself. Granted, Sony isn't making much of a provision for those who don't have broadband access (still a MAJOR issue no one is addressing that's going to hit the upcoming gen harder than some believe), but hey, Sony will make some money on the new slim console (provided they can convince more folks like you that this is a good idea)...
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Curt Sampson Sofware Developer 9 years ago
Andrew Jakobs writes, "...but for a real developer it isn't a real problem (these days a lot of developers have become soooo lame and lazy, they don't know how to develop unless it's with a garbagecollecting language or some other crap).."

Yeah! And even worse, a lot of them are working in these inefficient high-level languages such as "C" rather than just coding directly in assembler as God meant them to. (Actually, God meant you to write in machine language, and assemblers are for wimps, but let's not bring up that here.)

Going back to a real conversation, Sony's cross-whatever-they-call-it interface isn't totally brilliant, but it's not bad especially if you have a dozen rather than hundreds of games on your console. I find it easier to use that any of MS's Xbox interfaces, though I'll be the first to say that might be just because I'm more used to the Sony UI.
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Simon Lawrence Production Manager, SEGA Europe9 years ago
Who'd buy this? I'd seriously consider it. Iím a 360 gamer, but the idea of a £99 blu-ray player coupled with a vast back catalogue of games (very cheap if buy pre-owned!) is attractive. Plus, I donít have enough time to play online so I donít pay the MS gold subs. With a PS3 I can play the odd game of Fifa online if I find a spare ten minutes at no cost.

Plus, Iím a PS Vita fanboy and like the idea of the interconnectivity. So for me a cheap PS3 looks like a good deal.
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Ken Varley Owner & Freelance Developer, Writer, Devpac9 years ago
Waits for someone to buy a 16gb £99 PS3...

Someone buys a game and while loading, sees an error message "Hard Drive Required."

Is it wise of Sony to release a HDDless PS3, after all developers have developed games based on the fact that its there.

It reminds me of the original arguments of the original Xbox 360.
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