Microsoft concentrates innovation to control costs. We take a look inside its latest console.
So, who's winning the console war, Sony or Microsoft? Right now the correct answer is, of course, AMD.
According to numbers released for the PlayStation 4 and the Xbox One during last month's Consumer Electronics Show, Sony has the greater volume. Its claimed PS4 sales of 4.2 million, since the two consoles finally arrived, are well ahead of the three million claimed for Microsoft's rival. But that's not the whole story - we have to add a few caveats.
First, the PS4 had a wider launch in late 2013 - 48 countries against 13 for the Xbox One. With the exception of Japan (which gets the PS4 this month) and China (which recently announced a temporary moratorium on the ban on all foreign-made consoles), the two rivals have already gone head-to-head in most of the biggest volume markets, but the Xbox One's slower international roll-out should still be noted.
Second, Sony does have the lower price point. The PS4 retails at pre-tax prices of $399 in the US and '290 in the UK. The Xbox One costs $499 (US) and '357 (UK). But Sony is selling less to its customers. Microsoft is now bundling the Kinect motion-sensing bar with its console, while the equivalent Sony hardware is a separate purchase.
So the only outright winner, we can declare so far, is AMD. It has replaced IBM as the key silicon technology supplier in both products, supplying very similar 'console on a chip' engines based on its Jaguar x86 architecture.
"Although the AMD chips are'unique in the two consoles, they appear very similar in many'ways," says Andrew Rassweiler, senior director, IHS teardown service. "Both chips are built in the 28nm process geometry, have the same number'of CPU cores [eight], and'possess similar silicon die surface area between the two, suggesting similar amounts of functionality and processing power.
"Even the net power requirements for the two consoles are very much alike, which further underscores functional similarity. The two consoles are not clones, but are definitely related."
According to a preliminary analysis by IHS iSuppli, Microsoft is paying slightly more for its AMD SoC than Sony: $110 against $100. But going deeper into the Xbox One, it is interesting how economically similar the two design strategies have been.
As with the PS4 and PS3, the cost to manufacture each Xbox One is lower than the High Street price. IHS calculates that Microsoft is paying $457 for the hardware and a further $14 for manufacturing on each of the new consoles at launch, a total of $471, $28 less than retail. The PS4's hardware/manufacturing against retail difference was $18 less.
This does mean that Microsoft is initially subsidising the Xbox One, given the extra investment needed for software development and marketing. However, assuming that Microsoft also wants its new console to last for around a decade, there is plenty of scope for further cost-down revisions that will ultimately make the entire product profitable in its own right.
The IHS analysis also suggests that, like Sony, Microsoft has concentrated its hardware dollars in specific areas, controlling costs around those with off-the-shelf components. Apart from the CPU/GPU, IHS cites two other significant cost drivers.
The optics in the Kinect have been overhauled and that accounts for a large part of the increase in its bill of materials to $75 per unit from $64 for the 360's peripheral version. The cameras are larger and more sophisticated, as are the three infra-red emitters.
Unlike Sony, Microsoft has no in-house Blu-Ray drive manufacturing division. It had to purchase these from Lite-On at $32 per unit - $4 more than is being paid internally by Sony.
By contrast, Microsoft's determination to keep other costs under control is illustrated by iFixit's repair-focused teardown of the design. It gives the Xbox One an 8/10 score for repairability which is largely in recognition of its simplicity.
"Once inside, a clean, no-nonsense modular design allows the drives, fan, heat sink, wireless board, and front daughterboard to be easily replaced," says iFixit.
The iFixit gurus continued the'inevitable comparison with the PS4 by seeing how easy it was'to replace the Xbox One's 500GB internal hard drive. Sony'has made something of the'fact that it will allow its users to swap HDDs in and out of its'consoles and thus compensating a little for the PS4's lack of a USB connection for external media.
There are three USB 3.0 ports on the Xbox One, but iFixit got its toolkit out anyway. The result was that, while tricky, the HDD could be taken out and it proved to be a standard 2.5in SATA unit. The only problem is that doing this will void the warranty. Moreover, it is not yet clear whether the Xbox One will or will not accept an unformatted drive (the pre-installed HDD has five NTFS partitions).
Having now looked at the two big consoles, next month we will step on the footplate of some of the first Valve-based steam machines.