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Xbox, PlayStation 5 Release Rumors Claim 2020: Are Sony And Microsoft Ripping Gamers Off?

Xbox, PlayStation 5 Release Rumors Claim 2020: Are Sony And Microsoft Ripping Gamers Off?

The next Xbox and PlayStation 5 release dates are reportedly arriving much earlier than expected, perhaps even as soon as 2020 or thereabouts. But are Microsoft and Sony ripping gamers off in the process?

In a related report by The Inquisitr, Sony Worldwide Studios President Shuhei Yoshida says the cloud gaming service PlayStation Now is intended to allow Sony to “shift to [being] service-oriented.” In essence, the upcoming launch of PlayStation Now — which is based upon the streaming technology purchased with Gaikai — is testing the waters for an eventual change to the PlayStation 5 becoming an online-only digital distribution platform that simply receives video and sound from a cloud server. Although this would mean the PlayStation 5 would not necessarily require faster hardware, Yoshida says they’re keeping their options open:

“It’s really up to the game creators. If they still feel that we need more machine power — ‘We want to realize this and that and that, but we cannot do [it] with PS4′ — if that’s the case, there’s a good reason to have PS5, so that developers can create their vision. So, we’ll see.”

AMD CPUs and GPUs power all of the current generation consoles, even the Wii U. Senior Vice President and Chief Financial Office of AMD Devinder Kumar has confirmed that the next generation Xbox and PlayStation 5 could be coming much earlier than expected:

“The life cycle of the products are probably going to be shorter. Our customers are already thinking about what comes next. These are long life cycle products and as you know in the semi-custom space, you start with — three years before you introduce a product, a decision is made to use a particular company. In this case it was AMD. And then you go ahead and co-develop the product with the funding dollars frankly, mostly coming from our customers. And then when you introduce the product, there is really no expenses from R&D standpoint, no sales and marketing dollars and whatever dollars you generate from a gross margin dollar standpoint, falls to the bottom-line and that’s what excites us.”

Considering that the Xbox One and the PS4 were launched eight and seven years after the Xbox 360 and the PS3, if the launch window is now six years out that would mean the PS5 and the next Xbox would be coming out around 2020. Now gamers probably would not be pleased at the prospect at having to drop several hundred dollars so soon, but there are other reasons I’m saying Sony and Microsoft are ripping us off.

The first reason is that both the Xbox One and PS4 are not intended to be loss leaders except in the short run. For example, at launch the cost of building a PlayStation 4 was only $18 away from having a profit margin, and now CEO Kazuo Hirai has confirmed that every piece of PS4 hardware sold is now netting Sony a small gain. While we do not know what the PS4 or Xbox One profit margin is, we do know the ESRAM makes the X1 almost as expensive to build. If the Kinect 2.0 is removed it should be assumed that Microsoft also willing be profiting from every unit sold.

The second reason is that if you compare the retail price versus the performance this current generation is lacking. If you look at console prices adjusted for inflation the Xbox 360 cost $348 in today’s dollars and the PlayStation 3 cost $567. The previous generation definitely gave a better bang for your buck because the PlayStation 3 was estimated to cost about $805 to make in 2006 (never mind the fact that standalone Bluray drives started at over $1,000 retail at the time). Even as late as 2010 the PS3 was still a loss leader for Sony and the PlayStation Slim was sold at a $31.27 per unit loss.

The third reason is that both the Xbox One and PS4 GPU are relatively slow and will hold back gaming. While developers will of course be working on optimizations, even the Watch Dogs PS4 version could not handle 1080p, 60FPS. If we had been given the same value for our money for this generation then the GPUs probably should have been capable of outputting in the 2.5 to 3.0 TeraFLOPS range or higher. For example, an AMD Radeon R9 270X video card outputs 2.69 TeraFLOPS and is around $150 now.

All in all, this is quite a departure from the PS3 and Xbox 360 since it took many years for those consoles to become profitable based upon their relatively higher performance levels. So it might be assumed that if the same business strategy is adopted for the next Xbox and PlayStation 5 then both Sony and Microsoft may be planning on reducing the console cycle in order to maximize profits on hardware sales.

Would you feel ripped off if the next Xbox and PlayStation 5 release date was set for 2020?

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6 Responses to “Xbox, PlayStation 5 Release Rumors Claim 2020: Are Sony And Microsoft Ripping Gamers Off?”

  1. Jesse Kaylor

    There are a few issues here. First, prior to the Xbox 360 and PS3, most console life cycles were 4 to 5 years. It is something that many gamers have come to expect. The length of last generation was actually beginning to cause disinterest in many gamers and hurt the industry. This is coupled with the fact that after waiting for so many years, many gamers were expecting these consoles to be more "powerful". No, I assure you many gamers probably hope that this generation is a 4 to 5 year cycle again.

    Second, this industry can't and really won't support a loss leader model anymore. This is one of the reasons why the hardware is being perceived as considerably weaker than expected. These manufacturers can't live on the old model.

    Finally, stable platform environments allow developers to improve over time as they learn and develop better optimizations and techniques. Console hardware setups are not directly comparable to PC setups. These are relatively young and fledgling systems/APIs that these developers are learning to work with at the moment. This is a huge contrast to PC development and 360/PS3 development, the latter being 8 years into their life cycles. The 1080p/60fps metric is a ridiculous hot button issue right now, and no where near as important to gameplay design as other areas. These are choices best left up to those who make games and how it pertains to their vision.

    This is nothing particularly new for purchasing a brand new console. You most likely won't get all of your value up front, although I've more than played through my the value of my purchase at this point. It is roughly 8 months into the lives of the XB1 and PS4. The value potential has only room to grow from here.

    Now, if you had made a case that Nintendo was ripping its customers off with the purchase of a WiiU considering the paltry support it's seen until recently, then you might have a point.

  2. Jeffery Winborne

    Not particularly. Before the 360 and PS3, the life cycles were much shorter. It's amazing how long those systems stuck around. (Not counting PS2, Sony milked that cow bone dry.) So a shorter life cycle isnt unheard of.

  3. Matthew Young

    Cloud gaming for AAA-caliber games will never work unless they start leaning on ISPs to drop data caps. I use Cox communications because they're the only game in town (Fios is available 5 miles up the street, but they can't bothered to come to my apartment complex), and they limit my data to 250gb a month – the same as it was 10 years ago; even though speed has gotten faster and use has drastically increased. It's hard enough staying under the cap while watching HD video, using VOIP, downloading large games (XBox Games with Gold, PS Plus, Steam), etc. But adding streaming as my main method of gaming?

    Not happening. PS Now is an interesting, promising service as a SUPPLEMENT to traditional gaming. But as a REPLACEMENT? No thanks.

  4. Rigo Contreras

    As someone that plays PC games I'm used to hardware upgrades every few years. I won't feel ripped off if theres a new console in 2020 especially if its backwards compatible. Honestly I don't think these consoles will last til 2020. I think by 2018 theres a new console generation.

  5. David Pechacek

    But I don't want it to be a cloud gaming system either.