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PS3 modchip = Sony gets pwnd?
November 24, 2006 8:02 AM   Subscribe

Will Blu Ray make the modding of a PS3 that much harder? I seem to remember that it only took a few months after the original PlayStation and the PS2 came out, for people to figure out the way to mod them and make them play cracked games. Now, I'm far from an expert, but since every PS3 sold actually costs money to Sony it seems to me that once it becomes possible -- say, in the pring -- to mod the PS3 and people start sharing games like there's no tomorrow (the way it happened with the previous consoles) it could very well be a disaster for Sony. As I said I'm not an expert, though.
posted by matteo to Technology (31 answers total)
 
"in the spring", of course

damn
posted by matteo at 8:04 AM on November 24, 2006


Until people have Blu-ray burners, it will make pirating games difficult, or at least the ones that are too large to fit on a DVD.

but since every PS3 sold actually costs money to Sony

This isn't really true. If you check the breakdown the most expensive parts are the Bluray drive (manufactured by Sony) and the custom chips (designed for Sony). There's no reason Sony would be paying anything like fair market price for these, and more importantly, no way to know what they actually are paying. I doubt they're losing much on it, and if they are, only in the short term.
posted by cillit bang at 8:35 AM on November 24, 2006


The best estimates suggest that Sony loses about $250 per console on the cheap version sold in Japan (which is the lowest of all the prices), and about $145 on the expensive console sold in the US. Sony has hard manufacturing costs, and they expect to post a GIGANTIC loss for the next few quarters as they sell units for a lot less than they cost to make. And, of course, don't forget that they spent billions creating the Cell chip in the first place, which doesn't directly show in the unit costs, but must still be amortized.

The Blu-Ray drive may not make modding the PS3 itself any harder, but it will probably make it harder to load pirated games. When PC games first went to CD-ROM, there was a few years where hardly anything was pirated. I imagine something similar may happen here. And, since Blu-Ray looks entirely likely to suffer the same fate as all the other doomed Sony formats, it may *never* have much piracy. It may also never have very many games... it's too expensive for a broad base, and too hard to program for. Between the higher development costs and the lower installed base, the cost per potential customer is likely to be much higher. I've seen estimates that claim cost per unit sold may be as much as 8 times higher than the Wii.

My guess is that the PS3 will be a gigantic faceplant.

But, yes, I think your fundamental assertion is a good one.. with Sony losing that much per console, if pirates DO figure out a way to get games loaded from some kind of media, it will hurt Sony a lot. They have to sell a LOT of games to make up for the losses they're taking on the hardware.
posted by Malor at 8:50 AM on November 24, 2006


Blech, I should have spent more time editing, that's way too repetitive. Sorry.
posted by Malor at 8:51 AM on November 24, 2006


Even if it was modded and you could buy a blu-ray burner, you'd be looking at gigabytes of ISO to download.

I don't know about ISP's in the USA, but here in the UK even those that have no cap would be pointing you at their Acceptable Use Policy if you downloaded only a couple of games.
posted by mr_silver at 9:05 AM on November 24, 2006


Malor, you're repeating a big pile of gamer website bullshit there. Can you provide a link that backs up "they expect to post a GIGANTIC loss for the next few quarters"? On the PS3 hardware alone maybe, but as a company, no, even if the iSuppli figures are accurate.
posted by cillit bang at 9:07 AM on November 24, 2006


This week's Economist has an article on the PS3 launch where they mention that the average number of games sold so far is below the number of consoles sold. Sony, they argue, should worry about those people who are buying the PS3 primarily as a highly subsidised blue-ray player.
posted by rongorongo at 9:08 AM on November 24, 2006


rongorongo- perhaps, but if blu-ray succeeds and wins the format war, just about any cost addition on this kind of scale would be worth it. i don't see how people wanting their product is really going to hurt them regardless.
posted by haveanicesummer at 9:40 AM on November 24, 2006


Malor, you're repeating a big pile of gamer website bullshit there. Can you provide a link that backs up "they expect to post a GIGANTIC loss for the next few quarters"? On the PS3 hardware alone maybe, but as a company, no, even if the iSuppli figures are accurate.

cillit: No offense, but you're posting lots of, well, general nonsense with no backup whatsoever. I've seen that claim all over the press, from people who have disassembled the unit and counted the chips inside. You're just spouting speculation about what "Must!" be true with no evidence at all, and since your claims are "extraordinary" (i.e. out of the mainstream) the burdon is on you to back up your claims. Anyway as for evidence (found doing a quick google search) here you go:
Researchers from electronics supply chain iSuppli have performed their latest 'teardown analysis' on Sony's new PlayStation 3, and have calculated the manufacturing cost of the 20GB model at at $805.85 - over $300 more than its retail price.
posted by delmoi at 9:59 AM on November 24, 2006


That's not evidence, that's press release hype. iSuppli are doing exactly what you accuse me of doing - writing down a list of what Sony "must" be paying for each component. As far I'm aware, they don't claim to have inside knowledge of Sony's manufacturing contracts, so at best they're making educated guesses. Pointing out something iSuppli openly admit is not contradicting anything.
posted by cillit bang at 10:17 AM on November 24, 2006


serious pirates will not bother burning blue ray disk they will play games off of hard drives, just like they have been doing with the xbox and ps2. getting up and switching disk is a pain in the ass after all.

it is worth noting that just because blue ray has an expanded capacity developers do not have to use it all. i would be surprised if games where all that large, at least to begin with. if size does become a real problem people will just downsample the large video/audio files, again another common and long standing practice.
posted by phil at 10:36 AM on November 24, 2006


If you check the breakdown the most expensive parts are the Bluray drive (manufactured by Sony) and the custom chips (designed for Sony). There's no reason Sony would be paying anything like fair market price for these, and more importantly, no way to know what they actually are paying. I doubt they're losing much on it, and if they are, only in the short term.

Blu-ray players are expensive as shit after the markup (which, you're right, may be significant), so even if Sony's not losing a lot of money on the actual manufacturing, there's a massive opportunity cost to including them inside PS3s.
posted by danb at 10:39 AM on November 24, 2006


cillit: see this response on the blue.
posted by delmoi at 11:27 AM on November 24, 2006


It may also never have very many games... it's too expensive for a broad base, and too hard to program for.

I’m told by a friend in the business that the thing is multi-processor, and the endianness among the cores differs. Which should be one of the more insane things I’ve ever heard, but I’ve been in this field too long. Anyway, yeah, apparently difficult to program for.
posted by Aidan Kehoe at 11:33 AM on November 24, 2006


My opinion is that Sony's primary marketing goal for PS3 is to use it to build up a large customer base for the BluRay disk format. While I don't think they'd be happy if PS3 overall ended up being unprofitable, it wouldn't necessarily be a disaster for Sony as a corporation if it successfully bootstraps BluRay and that ends up as the victor HD format. And I think that's the primary marketing goal.
posted by Steven C. Den Beste at 11:39 AM on November 24, 2006


Wait, what's your actual question?

Blu-Ray will not make modding any more difficult. It may make piracy of larger games more difficult. I don't believe modding is likely to have a significant impact on Sony's success one way or another.
posted by aubilenon at 11:39 AM on November 24, 2006


mr_silver writes "Even if it was modded and you could buy a blu-ray burner, you'd be looking at gigabytes of ISO to download."

Much piracy of disk based console games is from the rental market. You rent BallStick2008 from Blockbuster, rip it and then play it in your modded machine. Which nets you the game at a 90-95% discount and there is approximately zero change of getting caught (unlike warez).
posted by Mitheral at 11:44 AM on November 24, 2006


This week's Economist has an article on the PS3 launch where they mention that the average number of games sold so far is below the number of consoles sold.

That should concern Sony, not because they're paying for a subsidized Blu-Ray for consumers, but because they're selling a huge percentage (25%? 50%?) of PS3s who are buying them for the purpose of quick resale on eBay.
posted by MegoSteve at 12:08 PM on November 24, 2006


Re: modding:

It's always existed, but never been all that widespread, and I can't see why things would suddenly be different. If anything, it seems to me that people would be more reluctant to crack open a $600 box than they would a $300 one.

Re: gigabytes of ISO:

A gigabyte of storage costs, what, fifty cents, probably less? People are already swapping DVD rips, and full seasons of television shows, and ISOs from every disc-based video game system ever manufactured. I don't see any reason to think that PS3 ISOs will be any different.
posted by box at 12:08 PM on November 24, 2006


That is, to people who are buying them for the purpose of quick resale.
posted by MegoSteve at 12:09 PM on November 24, 2006


Even if it was modded and you could buy a blu-ray burner, you'd be looking at gigabytes of ISO to download.

Downloading is only one option. Borrowing or renting are two others. Sharing via snailmail "trees" is viable when bandwidth is unavailable to share electronically.

I don't know about ISP's in the USA, but here in the UK even those that have no cap would be pointing you at their Acceptable Use Policy if you downloaded only a couple of games.

I'm in Canada. I regularly download 200 GB+ every month and I have two housemates. God only knows what they download. I haven't heard word one from my ISP. I don't see this as an issue in any way or shape.

A gigabyte of storage costs, what, fifty cents, probably less?

About six cents here; I pay about $0.20 per 4.7 GB DVD. So even if BluRay disks end up being $20 a pop at retail, I can send a game to someone in my "tree" for about three bucks, including shipping, and then he can unzip from five DVDs and burn to a BluRay disk himself.

But this is really just an intellectual exercise. I agree with box in that the size of the files doesn't really matter.
posted by solid-one-love at 1:57 PM on November 24, 2006


One thing to note is that the original Playstation was popular specifically because it was so trivial to buy and play pirated games on it. Sure, early adopters loved the processing power, compared to the Saturn, and the size of the games, compared to the N64, but by the time the Dreamcast arrived, Joe Average was buying a Playstation because he could fly to Bali (or whatever) and come back with 20-50 games for the price of one or two legit copies.

Now, popularity and profitability are different things, but modding will not kill the PS3. The most likely cause of death for the PS3 will be developers abandoning it due to poor initial sales.
posted by krisjohn at 2:32 PM on November 24, 2006


There is no way to predict when the PS3 will be hacked. Just because the PS2 and X-Box were hacked in relatively short amount of time, that does not guarantee that the next generation system will be available for modding in 5 months or 5 years. The modification on the X-Box 360 is slowly progressing, just now getting backed up games to run. It still lacks the ability to run unsigned code however.
posted by dendrite at 2:35 PM on November 24, 2006


It may seem like modders must have an impact, if you're in the scene and thus know lots of modders - it seems like a huge slice of the population uses mods, but my impression is that in the big picture, modding is so rare compared to normal useage, as to be fairly insignificant.
posted by -harlequin- at 3:54 PM on November 24, 2006


harlequin is probably right; otherwise, Sony et al. wouldn't have any incentive to lock down their systems.
posted by danb at 7:16 PM on November 24, 2006


danb: the incentive is there to be sure of getting game royalties. they don't want studios making games without titheing to mama sony.

Sony's openness to Linux on the PS3 suggests that they're not selling it at as much of a loss as other consoles.
posted by rbs at 7:55 PM on November 24, 2006


Yes, people modding the PS3 would be bad for Sony. They've spent a shit-ton of money on R&D, and they spend a lot of money each box, and they expect to get that back in the form of Game Sales (and Bluray movie sales, since they own the format.)

It's a concern, probably, but they have a lot of other issues to deal with which are a lot more real and pressing right now. Like getting boxes on shelves.

Having a 'special' disk (like the Gamecube) helps stave off piracy/'modding'. Better code-authentication would help preclude people from blowing the thing wide open, (to the point that they are playing games off the HDD) like the Xbox 1.

The PS3 Linux-on-day-one thing (which is super-cool, btw) is really interesting. My theory is that it accomplishes a few things: 1> it takes some of the steam out of the mod community, since it enables a large class of non-piracy activities, and 2> it adds value without cost (and if people use it as a DVR, or to play MAME or Nintendo games on emulators, that doesn't hurt Sony any,) oh and 3> it builds Cell processor mindshare, since it gives people the chance to dev for Cell in their living rooms.

I doubt, in practice, anyone is _really_ going to buy a PS3 and not buy at least three or four games for it, even if they do end up using it primarily for Linux. And, before another year or two, they'll probably be in the black on each console they sell, anyway (which is what iSuppli projected happened to MSFT.)
posted by blenderfish at 8:46 PM on November 24, 2006


I doubt, in practice, anyone is _really_ going to buy a PS3 and not buy at least three or four games for it, even if they do end up using it primarily for Linux. And, before another year or two, they'll probably be in the black on each console they sell, anyway (which is what iSuppli projected happened to MSFT.)

The current 'attach rate' is something like 0.82... in other words, most people who buy the console buy less than one additional thing. Obviously, the EBay sellers are a big factor there, but when the console is $600, a lot of people may have trouble spending another $240 on four $60 games.

You may be suggesting that, over time, most people will buy three or four games, and I'm sure you're correct about that. But with the sheer magnitude of what they're losing ($150ish per console, best case), that's a heck of a lot of games to sell each person before breaking even, much less showing a profit. If you assume Sony profits $15/game (probably not unreasonable), that's on the order of 10 games just to break even on the most expensive console, and close to 20 on the cheapest one sold in Japan. And that's just on the hardware costs themselves... that doesn't include amortizing the cost of Cell development.

Add to that the fact that the console is extremely expensive and hard to program for, and I think it may never hit critical mass. To get the economies of scale, Sony needs to move A LOT of units. They need the PS3 to dominate the gaming industry, and to be much, much bigger than the PS2 -- just to break even -- but they've crippled the console's price point to try to fight the format war instead. They are, in essence, trying to fight on two fronts at once, and I think they're going to lose badly on both because of it. They can't make the console cheap unless they move a lot of units, and they can't move a lot of units because it's too expensive to start with.

In terms of game consoles sold, the Wii is going to destroy the PS3, and the 360 is going to outsell it by a large margin. And, because Sony won't move that many units, I don't think it's going to establish Blu-Ray, either. They're trying to be all things to all people, and I just don't see it happening.

I think it's entirely possible that Sony will be bankrupt within 5 years.
posted by Malor at 7:15 AM on November 25, 2006


You may be suggesting that, over time, most people will buy three or four games, and I'm sure you're correct about that. But with the sheer magnitude of what they're losing ($150ish per console, best case), that's a heck of a lot of games to sell each person before breaking even, much less showing a profit.

Correct, long/medium term.
It would not be unreasonable to project that they will be in the black, per console, in a year or two. It's not like Bluray drives are made of solid platinum or anything; they're just a bit expensive right now. Also, of course, as you pointed out, the ebay flippers don't buy games, either. But the guys who pay 1500$ to get a system from them on ebay probably will. (Otherwise, I guess they could wear them around their neck as bling or something.)
posted by blenderfish at 6:54 PM on November 26, 2006


to mod the PS3 and people start sharing games like there's no tomorrow (the way it happened with the previous consoles) it could very well be a disaster for Sony

Wait - modding wasn't a disaster for the PS or PS2, and it wasn't a disaster for the Xbox, and it doesn't seem to be a disaster for the 360 - why, exactly, is it going to be a disaster for the PS3?
posted by obiwanwasabi at 1:12 AM on November 27, 2006


Malor writes "They are, in essence, trying to fight on two fronts at once, and I think they're going to lose badly on both because of it."

Sony has got to be one of the most schizophrenic companies I can think of. They are always crippling themselves like this. Take a look at the DVD player vs. movie studio fight.
posted by Mitheral at 7:22 PM on November 28, 2006


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