AMD needs the money. It's unfair for AMD who supply and always stay in the red because of such criminal practices.
I wouldn't buy a next-gen console for $300 because it's dirty cheap.
"Criminal"? How? It's not like it's anticompetitive; it is how the console market has always operated, everyone does it and it's a perfectly viable business model. Hardware is sold as a loss leader to allow for profits through software licencing (FIY, this is also done in a lot of other industries, from movie tickets being sold at a loss with profits made on candy and drinks, to TVs sold at a loss with profits made on accessories, cables, insurance, etc. Don't get me started on capsule coffee makers.). For most current console games there's a ~$10 licencing fee per game (which is why console games have used to be $60 instead of $50 on PC). It would be very different if someone did this in a market where the software licencing part didn't exist or they had a dominant market position and the money to force competitors out through doing this, but that's not the case here. And besides, AMD's margins aren't affected here - if MS and Sony sell their consoles at a loss doesn't mean AMD are selling their chips at a loss, it just means that AMD's margins are a part of the BOM cost of the console. AMD isn't likely to have fat margins on a part like this (ordering 10-50 million chips is likely to give you a decent amount of leverage in price negotiations), but they're nowhere near losing money on this. Semi-custom has been one of AMD's most profitable departments in the previous console generation, no reason to expect that to change.
No, consoles always perform way better than PC counterpart, because games are tailored for them, while PC gets abstract "scaling slider" that does "some things".
Sure, there are some titles that are optimized in amazing ways and use a lot of clever tricks and smart utilization of the specific console hardware to look far better than anything comparable on PC, but for the majority of cross-platform games the console ports just run at a lower detail level (normally somewhere roughly equal to medium or medium-low on PC). Just watch a few Digital Foundry analyses and you'll see this clearly. Low-level hardware access is mostly a thing of the past, as modern consoles use PC-equivalent APIs (or even just PC APIs; Xbone uses DX12) for ease of development. They do demonstrate very well how much can be done by abandoning the rather silly "Ultra or nothing" mantra of many PC gamers, but that's about it.
There is no way Sony can justify $399 price tag because this would cover less than 50% of the manufacturing/R&D cost of the components inside:
1. Processor;
2. Graphics;
3. SSD;
4. Main board;
5. Case;
6. Power supply and delivery circuit;
7. Etc related costs.
1: Very expensive, yes, both in R&D and production.
2: Same silicon as 1, no additional cost. Same R&D.
3: Flash is expensive, otherwise this is cheap, likely using off-the-shelf parts with semi-custom firmware.
4: Medium cost, but cheap in the long run due to mass production. Highly optimized for cost with few PCB layers and likely a single-sided board.
Much cheaper than the cheapest PC mobo, and produced in >100-1000x the quantities for much lower R&D costs per board.
5: Cheap AF. Initial tooling is expensive (likely hundreds of thousands of dollars, possibly millions), and the design work and certifications isn't free by any means (though I guess the latter goes under point 7), but amortized over >10 000 000 consoles all of this amounts to a few dollars per console at most, and production costs are very low thanks to a simple stamped steel frame with injection-molded plastic for aesthetics.
6: very cheap, likely requires near zero design, just tweaking of specs and layout/form factor from an existing OEM solution. MS/Sony will just go to Delta/MeanWell/whoever and say "we need an internal PSU in roughly this form factor, at this efficiency level, rated for this temperature, at this level of output noise and ripple, with x Amps on the 12V rail and a 5VSB rail", and the OEM likely has a suitable solution already that just needs some layout/form factor tweaks.
7: FCC testing and other certifications do cost quite a lot, but again, amortized over millions of consoles it's next to nothing per unit.
That being said, $399 is unlikely due to the size and performance level of the SoC - as that's
by far the most expensive component of the build.
As for people saying that consoles don't sell due to price: don't be silly. A basic off-the-shelf gaming PC is ~$1000, with deals down to ~$700 if you're lucky and know where to look. They can be built cheaper, but that requires knowledge that the average user isn't even close to. So cost is definitely one of the main reasons for consoles being popular. Simplicity is another - they're mostly plug-and-play, and don't require any real skill to configure, and no assembly. Using them is also dead simple, and the software is relatively easy to learn. A third reason is that you can buy any game for the platform and expect it to work (at least in theory ... these days, yeah ...), unlike on PC where you have to know if your PC is powerful enough and/or start tweaking settings for it to run properly. A fourth reason is the couch experience - they fit smoothly into a contemporary TV-centric living room. PCs can too, but most don't whatsoever, and the UX is poor. So let's stop trying to point at
one reason why consoles are popular - as with anything the answer is complex and consists of many discrete parts. Break any one of them, though, and it becomes a lot less attractive - raise the price too much, complicate the software, make game compatibility complicated, or mess up the UX; any of that can turn users off a console.
