OK... a different video *RANT* than last time...

[Superdoopercooper]

Last time I was complaining about "why are video cards so danged much?". Well, now I have a new rant. People rebutted my last rant pretty well... so here is a new one for ya to pick apart:

If the the M$ Xbox is only $299, and has an NV20 chip in it, why the HECK is a GF3 car alone almost $299 and it only has an NV15 (I think) chip, and no Intel processor, no 64MB ram, and no etc.... what the heck?? The Xbox has a new gen. NVidia chip and some other hardware crap like an Intel (should have gone AMD IMHO) 733Mhz and 64MB ram, plus a controller... and is ONLY 299. But, if I want a GF3, then I have to shell out 200+ and only get the card. ugh.

*RANT*... fell free to pick apart. There must be something I'm missing here.

 

[QuestionsandAnsweres]

First it does have a NV20.
Second it does have 64mb of memory (OF HIGHER SPEED MEMORY AS WELL).
Third Microsoft is loosing $50 - $100 on each xbox they sell. But they will make up for it with licensing the games

 

[Superdoopercooper]

Ok... losing 50-100. Does that make up for the cost of a 733Mhz processor, 64MB of ram (I guess the Xbox shares this 64MB between the processor and video... so this is a wash in a comparison between Xbox and GF3), controller, and whatever else the Xbox comes with??

Does the Xbox come with a HardDrive? So... I guess what I'm thinking then is: the Xbox is a souped up GF3?! LOL.

 

[QuestionsandAnsweres]

There are a few basic business ideas behind the reason that the X-Box is cheaper than a comparatively equivalent Geforce 3. Let's first look at it from the Graphics card industry point of view.

1) The computer game market is an already established video game market with only 2 major competitors invovled in the Graphics card industry, that being ATI and NVIDIA. Therefore their pricing is more than likely determined from whom is considered their nearest rival, which is not a console manufacturer. Basicaly, they compete with each other, not with consoles.
2) Nvidia is making the chips for the X-Box directly, and Microsoft is having the system built in Mexico by a company named Flextronics. That's it. From Nvidia to Flextronics to you. On the Graphics cards front it goes like this, from Nvidia to the card manufacturer (like Hercules) then that card is sold to a wholesaler (who raises the price) who then sells it to retail (who increases the price also). So you have a lot of people tagging on their livelihoods onto the price of a Hercules Geforce 3.

Now from the X-Box point of view:
1) At the most our system can cost the same as the PS2, and that is $299. Otherwise people will go for the PS2, since it can play all of the old PS1 games, DVD's and developers are ALREADY making games for it. We need market share fast, so we have to have good price point.
2) If we have to lose $50 to $100 doing it for $299 then so be it. We are Microsoft, we have billions. We can stand to lose $500 million because we sold our system for less than it cost to manufacture them, and we can spend $500 million on advertising becuase we believe that we can dominate this market and will recoup this money by 2004. This is no joke, it has been published in Wired and a few business magazines.
3) We have a great business plan, and manufacturers are dying to make the chips for our system. Since we take most of the risk if the system fails, our chip suppliers only stand to gain from working with us. There for NVIDIA, 3DFX, and ATI probably all fought to get in the X-Box, as well as Intel and AMD.
4) AND THIS IS THE BIG ONE.
OH SH*T. Everyone will have a PS2 with a harddrive, keyboard, mouse, and broadband connected. They won't need Microsoft anymore. They won't need windows. We have to build our own Trojan horse to get into the living room before Sony does!

 

[PressureXP]

It's a fact that microsoft is selling them with a loss which they hope to gain later on via merchandise, games and such.