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How the Writer's Strike could cost iTunes subscribers
Macworld (the magazine, not the party that many of us are missing out on this week) has an interesting note up about how the writer's strike is going to be bad news for iTunes subscribers, and it's not what you think. Sure, the whole strike is supposedly about television writers getting paid for their work from online sales (which means that if the writers win, networks will likely claim they have to charge more for sales on iTunes and other digital outlets), but there's another negative: no writers means shorter seasons, which means iTunes subscriptions aren't worth as much. Desperate Housewives and Prison Break had both of their seasons cut short, and that means that anyone who bought either of those seasons isn't getting as much as they expected for their money.As MW says, the closest thing they've heard to an answer from Apple on this is an example of The Daily Show and Colbert Report subscriptions-- subscribers of those shows were told that their subscriptions would resume when the shows did, so people who have subscribed to Desperate Housewives may just expect to have part of the next season paid for already as well (or may get refunds of iTunes credit for other shows that are available).And it'll be interesting to see what effect this has on the keynote at Macworld tomorrow-- will Apple promote television shows that are headed off the air for a while? Or maybe the rumored movie rentals will draw attention away from iTunes TV subscriptions anyway.
Teardown reveals iPhone parts cost two bills
Unlike video game consoles, phones are typically profitable to manufacture from day one and it turns out that the iPhone is no exception -- far from it, in fact. Teardown specialists at Portelligent claim that the 4GB iPhone runs Apple just $200 worth of components, while the 8GB adds an extra $20, not far off at all from iSuppli's slightly higher estimates from January. Granted those tallies don't include the actual cost of assembling the device -- but even so, those numbers are very far cries from the $500 and $600 asking prices at the register, leaving a healthy $299 and $379 respectively (of which an overwhelming majority are $379) for profit and miscellaneous costs. Interestingly, Portelligent's unceremonious destruction of an iPhone in the name of research revealed no further proof that Hon Hai / Foxconn is the ODM responsible for assembling the darned thing.
Pricing "expert": Apple could've charged more for the iPhone
It's great to know there's someone out there looking out for the big guy, making sure prices stay high, profits stay fat, and iPhones cost the better part of a grand. That's Rafi Mohammed's job, author of "The Art of Pricing" and head of the dubiously-named consulting firm Culture of Profit. In a recent interview with Blogging Stocks, Mohammed commented that while Apple was on the money with the 4GB iPhone's pricing by keeping it under the psychological barrier of $500, it could've realistically charged far more for the 8GB model in light of the tremendous buzz it's been treated to. His advice to Apple for future iterations of the iPhone, then? "I'd advise Apple to moderate its discounting and consider setting higher prices when it rolls out models with new features." Alright, dude, enjoy your $800 3G iPhone down the road.[Via Tech Digest]
Pachter poses Manhunt 2 costing Take-Two millions
Industry fortune teller, Wedbush-Morgan's Michael Pachter, says Manhunt 2's freedom of expression will cost publisher Take-Two millions -- good thing Take-Two may have gotten that GTA IV advance money! Pachter believes the game would have generated $25 million in revenues this quarter, along with another $15 million in reorders. He sees three options for Take-Two at this point: Ship the game the way it is. Edit the game, bringing it in line with UK morals and the ESRB's M rating criteria. Cancel the game. Pachter believes canceling isn't a reasonable outcome. The other two options leave Take-Two with either lower sales because of the AO rating and the banning, or increased development costs due to the edit. Pachter guesses that either option costs the company half their potential revenue. He also goes on to say that this incident hurts the longevity of the franchise, which is funny for those who feel Manhunt 2 came out of left field anyway. Take-Two can probably cut their marketing budget by half, look at all this yummy free advertising. We already know FOX News has a story locked and loaded for public consumption closer to the Manhunt 2's July release.
Toshiba's HD-A2 HD DVD player going for a mere $199
Now this is more like it. Sure, we've seen the prices of HD DVD players slowly but surely sinking over time, and while there's been more than a few inconvenient rebate offers of late, it looks like a new precedent has been set. Crutchfield is now offering up Toshiba's HD-A2 HD DVD player for a mere $199 after a $100 instant rebate, but we wouldn't count on this thing showing up anytime soon. According to the site, not only is inventory sitting at zero, but it also admits that the ship date is unfortunately "uncertain." Still, $199 for a second-generation HD DVD player ain't too shabby (have you seen one for less?), so be sure to check out the previous impressions before grabbing your place in the ever-growing line of customers trying to take advantage.[Thanks, Andrew]UPDATE: Too bad -- looks like Crutchfield was forced to jack the price up by a Benjamin or face an order backlog beyond belief.
GameFly rate increasing by $1 due to mail and game cost
GameFly announced today that they'll be increasing their subscription fee by $1 across all plans. It was bound to happen, and after five years it isn't so bad. GameFly says the increase is due to the postal rate hike and higher cost of console games ... and we're sure the new distribution center had a little something to do with it.A $1 hike isn't really something we can complain about, considering the service saves us, at least, $120 to $200 in game purchases per month. They've even updated the GameQ to more efficiently order your games -- and if you want to just buy, their store deals are the best. There's also a silver lining in the understandable, but still bad, news. GameFly is offering loyal customers the option to lock in discounted rates at 3, 6 and 12 month increments. That way, if you pay upfront, you can get a subscription for cheaper than what it costs now. A good deal if you know you're gonna stick with the service.We've placed the new billing structure after the break.
Petition for immediate PS3 price cut
I'm all for signing petitions. I did it once to save a tree in New York. Well it just so happens we found a petition to lower the cost of the PS3. Yet, seeing as how Sony took a major hit in the pocketbook with the PS3, asking them to lower the cost via signed petition is like haggling over a $0.10 candy bar that should've cost $1.00. Some Sony executives are still quick to point out the value in their PS3 price point, so asking for a price cut now is really just wishful thinking. Perhaps if Sony has a few major hits with their upcoming software lineup, it will escalate the call for a price cut but for now, the prospect is ludicrous. The mere act reeks of self indulgence with little regard for the cold facts on Sony's manufacturing costs. The PS3 parts will get cheaper to manufacture over time but they aren't quite there yet. It just doesn't make any financial sense to lower the PS3 right now. Maybe in five months, but not now. But hey, go ahead. Sign the petition. Can't hurt, right? [Via digg]
Jack Tretton says PS3 cost levied by abundance of planned content
Jack Tretton admitted the high price point of the PS3 console can prove a worthy "challenge," but he firmly believes the content lined up will justify its cost. A quick viewing of hot titles shown at Sony Gamers Day '07 should easily solidify his claim. He also projected a boost in PS3 sales over the next few months, stemming from the upcoming releases of a few stellar triple-A titles. While no specifics were mentioned by Mr. Tretton, we've got a pretty good idea what those triple-A games might be, judging from the mass of excellent footage from titles we've seen coming from SGD '07. We're most excited about the implementation of Home and titles like Eye of Judgement, Heavenly Sword and Uncharted. After checking out all of our extensive SGD '07 coverage, what triple-A titles are you looking forward to the most?
Analyst Michael Pachter says PS3 price drop this summer
Michael Pachter of Wedbush Morgan is one hell starter of an analyst when he's saying MTV bought the wrong company or Gamestop is a good stock, but he can also admit when he's wrong -- like he did with Bully. Well, now Pachter adds his voice to the choir that a PS3 price drop is possible as early as this summer.Speaking with GI.biz, Pachter says, "It is possible that Sony's cost of production for the PS3 has declined to the point that the company may consider a hardware price cut some time this summer, and we may see a price cut for the PS2 before the holidays."So, now Pachter has thrown his voice into the price drop echo chamber. Estimates for a PS3 price drop range in the $100 region. It hasn't been a pretty day for Sony, so anything that could drive sales would be worth considering.[Via PS3Fanboy]
Analyst predicts price cut for the PS3 this summer
var digg_url = 'http://www.digg.com/playstation_3/Analyst_predicts_price_cut_for_the_PS3_this_summer'; Videogame analyst superstar Michael Pachter expects there to be a price cut for the PlayStation 3 by the end of the year, and says that it might even come as early as this summer. GI.biz quotes Pachter, "It is possible that Sony's cost of production for the PS3 has declined to the point that the company may consider a hardware price cut some time this summer, and we may see a price cut for the PS2 before the holidays."As long as Sony's manufacturing costs have dropped to a reasonable rate, I'd heartily encourage Sony to drop the price of the PS3 as soon as possible. It's very clear that people desperately WANT a PS3, but just can't afford it. Dropping it to $500US and then marketing the hell out of the price drop would do wonders for their sales. Just look at what a 30 dollar price drop did for the PSP.
PS3 price could drop $100 due to Blu-ray diode supply
Hope springs again for gamers who just can't bring themselves to drop $600 on a PS3. DigiTimes reports that Sony's blue-violet laser diode manufacturing plant will increase production and this could, "according to Taiwan-based makers of game consoles and components," drop the PS3 price by $100. Now let's see if those savings are passed on to consumers. Despite what Sony says, this magical $100 reduction is being batted around due to tech upgrades in the console and other factors discussed by analysts.The article also discusses the production cost drop of the Xbox 360. According to research firm iSuppli the cost to manufacture the Xbox 360 is now $323.30, while it profitably retails for $399. The PS3 costs $840.35 to manufacture, in its current state of production, and retails for $599. We'll have to wait to see the NPD sales data later this month to see how well the PS3 sold in April and if more fuel gets added to the price-drop fire. Although, if the PS3 had a game other than Resistance it might be selling better. Oh well, the purchase of a PS3 was an investment in the future, wasn't it? At least the PS2 is still worth every one of the 13,000 pennies it costs to purchase.Update: DigiTimes used data from last November's iSuppli report and marked it as May data. The comparison of estimated material cost is valid for PS3 and the Xbox 360 in November of '06. Chances are production costs have declined further since. iSuppli plans to do a new cost analysis soon. [Thanks James]
PSP games not much more expensive than DS games
Think PSP games are expensive? You'd be wrong. Things have changed greatly since the system's release more than two years ago, with the $50 price point for some UMD games a thing of the past. Curmudgeon Gamer took a look at the upcoming releases on both handhelds, and noted that only one game currently has a $50 MSRP: Oblivion. The average cost of a PSP game is $29.89, only $2 more than the DS average of $27.29. Curmudgeon Gamer has a few other interesting statistics: EB Games lists 102 new games for the Nintendo DS and 94 new games for the PSP. There's no games for PSP? Incorrect. The median game price for each system is $29.99 About 33% of all PSP games retail for under $25. (DS has about 41%.) This doesn't come as surprising for long-time PSP fans. Hopefully, the rest of the gaming world will soon understand that although PSP games feature better graphics, they don't have to cost more.
How to make a better Nintendo DS
Next-Generation's Eric-Jon Rössel Waugh acknowledges that the Nintendo DS is an industry-changing system, but still sees the portable console as an "unfinished project." He wrote up a wishlist of improvements that he feels would fulfill the handheld's potential, extending its shelf-life. And while we've already seen dozens of message board topics filled with wild-eyed suggestions and what-they-should-really-do ideas in the past, Eric's revisions actually sound half-way sane.So what are some of his seven steps for making a better Nintendo DS? Slap on some internal flash memory, paving the way for firmware updates and a Virtual Console setup for handheld games (GB/GBA/NGPC/etc.). Allow for an expandable, customizable system interface. Flesh out its WiFi support by integrating Pictochat and developing a unified online service. They're all great recommendations, but one has to wonder how implementing those changes would affect the portable's retail price. The DS probably wouldn't have been such a success if it weren't for its impulse-buy pricing. Still, we would love to see Eric's suggestions make it into the handheld's next revision.We're sure that our readers have their own ideas on what the next Nintendo DS should have. VoIP capabilities? A flux capacitor? Maybe just throw some Ds on it? Drop us a comment and let us know what you think would make a better Nintendo DS!
How much longer can Xbox Live charge consumers?
As Xbox Live Everywhere ... Live for Windows starts to bubble up as a topic of conversation, we begin to recognize the absurdity of paying for Xbox Live. Live for Windows will charge the same fees as Xbox Live, but since when did we ever have to pay for easy-to-use matchmaking service on a PC?Australian site Screen Play asks the same question, "Microsoft has realized that most PC owners certainly won't pay for features they have become accustomed to getting for free, even with the sweeteners of a single Gamertag, Gamerscore and common Friends list. But they are still asking PC owners to pay $80 (Australian) a year just for cross-platform play and match-matching, surely the height of optimism."Now the question becomes: How long before the console rebellion begins? The PS3 is finally getting its online act together and despite Nintendo's never ending list of online incompetence, we figure they've got to turn it around eventually. When Sony and Nintendo finally get their ducks in a beautiful binary row at no cost to the consumer -- will we really keep paying for Xbox Live?
In Defense of the Virtual Console's pricing
We've surveyed your irritation with the Virtual Console's rates and even had you calculate the exact amount of Wii points you've been swindled out of so far, but VGamp's Chris Sinclair argues that the game downloads aren't expensive at all. Chris listed eleven reasons to support his claim, even admitting that he would be willing to pay more for the retro titles. While he might come across as an inflexible apologist, some of his points make sense.According to Chris, you're getting a deal whenever you make a purchase on the Shopping Channel. For example, let's say that you put out the cash for Soldier Blade, a title that sometimes sells for $50+ on eBay. You're scoring a discount on a relatively rare game that's guaranteed to work decades from now, and you don't even have to pay for the TurboGrafx-16 console or the controllers to play it with. As an added bonus, many of these emulated games look better than they ever did before.Alright, so we're still not entirely convinced that Altered Beast is worth the 800 Wii points Sega is asking for, but we can see where Chris is going with this. What do you think? Does the pricing seem justified after considering his points, or do you still feel like you're being fleeced?
Virtual Console cost calculator
According to the poll results we posted earlier today, 70% of our readers think Nintendo's Virtual Console pricing is way too expensive. If you're anything like us, however, you didn't let that get in the way of purchasing a few retro games anyway. Gunstar Heroes? The Legend of Zelda: A Link to the Past? Overpriced or not, how are we supposed to pass on that?We spotted an online calculator that adds up the total amount of Wii points you've spent or can expect to spend on the current Virtual Console lineup (Sorry, North American releases only!). If you have some Wii points saved up, the application will even display how much more points you will have left or will need to buy. So how much has Nintendo robbed you of so far? How many more Wii points will you have to shell out in order to complete your dream collection? Drop a line in our comments and let us know![Via The Tanooki]
Wii Warm Up: Adding up the costs
A reader dropped us a note about the money he'd thus far poured into the Wii, and at first our jaws dropped at the amount ... and then we started adding up our own costs, and boy weren't we red-faced. Let's look at some of the basic items:Console: $250Wii Remote: $40 (each)Nunchuk: $20 (each)Games: $50 (each) Classic controller: $20 (each)Component cables: $30So let's assume that we're Little Lisha Fangirl, and we head out to get hooked up with the Wii goodness. We buy a console, one extra controller and nunchuk, a couple of classic controllers, and two games, as well as component cables. With tax, we're probably looking at a little over $500. Not too bad; after all, you're not buying extra shinyz for a PS3 or 360 plus the console for that ... you're probably not even getting a PS3 by itself for that. But then you start laying in a few extras. Third and fourth controller, say. A couple of those nifty controller gloves so you don't have to play guess-which-remote-is-player-one. And you have to have some Wii points, so you break out the credit card and load up. You pick up an SD card. And suddenly your reasonable console, when you add in a couple more games, is slouching toward a cool grand. Ouch. We're even the inexpensive guys. How do you feel about the costs of gaming these days? It seems there are more games around than we could possibly buy and play and grok in fullness, but we do what we can. Still, do you ever feel overwhelmed by the hidden costs of gaming? That's today's question.[Thanks, RD!]
50-percent of your iPhone purchase to pad Apple's wallet?
Sure, LG's KE850 Prada handset will set users back a cool $778, and the Google Switch just might pop in to make things a bit more interesting, but a recent research report has unveiled that Apple's sure-to-be-sold-out iPhone is a lean, mean, profit-generating machine nonetheless. While Apple's well-known for selling its iPods (and to a lesser extent, its Macs) for much, much more than it cost to manufacture, even we're a bit taken aback at how hard those corporate buyers must be workin' those suppliers on this one. According to iSuppli (no affiliation with Apple, of course), the 4GB iPhone will yield a "49.3 percent profit margin on each unit sold at the $499 retail price," while the 8GB rendition will kick back a 46.9-percent margin. You heard right, they're supposing the $499 mobile only costs Apple $245.83 to produce, while the 8GB flavor demands just $264.85. Of course, this isn't the first time a hot-selling product has been broken down by the numbers to prove just how ripped off we're all getting (if these numbers are to be trusted, that is) -- but hey, unless you've got the means to buy capacitors and LCD touchscreens by the boatload, you're probably stuck paying exactly what they ask. Plus if all this sudden competition gets a bit too heated, don't think Apple doesn't have any room to introduce a (highly desired) price drop.
Rogue Amoeba begins "Should I Exhibit At Macworld?" blogging series
Paul Kafasis of Rogue Amoeba has kicked off a new series at their company blog titled Should I Exhibit At Macworld?, breaking down the finer yet lesser-known details of how much it really costs software developers to exhibit at Macworld. This first post examines the various significant and hidden costs of appearing at the Apple event to end all Apple events, including: travel, cab fair, internet access, pressing trial CDs and, of course, the big whopper: the actual booth or kiosk itself. Some of these costs might sound like pocket change to some, but Paul tallies everything up and - considering what the Moscone Center charges for some of these things ($1095 for 4 days of internet access on the floor makes even the $12/day I paid in the hotel look appetizing) - offers a good checklist that can act as a guiding light to some, or a ton-o'-bricks reality check for others. Stay tuned for the other three parts of this series, as Paul foreshadows where he'll take it with this first post.
For some, iPhone could cost up to $1349
For everything the iPhone offers, $499 and $599 really is a killer deal. But what if you have to shell out up to $1349 to get your hands on Apple's revolutionary do-it-all mobile device? Nick Starr points out that Cingular still charges a deposit of up to $750 for some customers who have bad credit. Add up $599 for the phone with a $750 deposit and you have one expensive little telephone. Of course, I have to point out that you can earn your deposit back after a year of good standing with Cingular, but still - that's one heckuva a barrier to entry. So never mind how much you have spent already - how much would you spend on an iPhone?
