One more episode of “let’s play the console game”
Increase in cost (and amount required) of DDR2 RAM
While the cost of RAM has gone down over the last 18 months, it has actually gone up in the last two. And it will go up again from December until February and will continue to be steady probably until around May of 2007. Why is this? Well, there are several reasons. Two of them relate to Windows Vista and the other relates to Intel. First, estimates are that to play late-current and next-gen games in Windows Vista you will need to have more than 1gb of RAM. That means that we’re going to see a huge increase in demand for 2x1gb kits of RAM, which will increase the cost of these still-not-mainstream products. All computers sold (except for ones with socket 754 processors, which is a trivial number of computers) use Dual-Channel RAM. Same supply plus increased demand means increased prices for you and me. This will really ramp up in November and continue to pick up speed until around February, when supply should increase enough to level out prices.
So what we have here is an increase from the average 512MB stick to 1GB stick. Thanks to Intel, we have an increase in base speed from 533 to 667 and 800mhz. What I’m going to say next may not seem important, but it really is. The Core 2 Duo is helping to drive this increase in cost. Why? An increase in the required frequency of the RAM due to an increase in front-side bus (FSB) speed. Pentium 4s (and Pentium Ds and Xeons) had FSBs of 800mhz, which means that they sit pretty with 400 or 533mhz DDR2. Athlon 64s and X2s can use 533, 667, or 800mhz DDR2 – with not a particularly significant increase in performance from 667 to 800mhz because of the on-board memory controller. Core 2 Duos? They use 800 or 1066mhz DDR2. You can put 667mhz RAM in there, or even 533mhz, but you’ll see a big difference. You want to overclock? Maybe use some faster memory? That sucks, only 10% of produced chips at the moment can hit 800mhz with reasonable CAS latency. Want 1.1ghz chips? Think .5%.
Basically, Intel artificially increased demand for faster memory. They increased demand for faster memory that isn’t there. So prices increase. And when windows
Decrease in cost of video cards ($ per pixel)
I have an XFX 7900GT (24 pipelines, 550/1.5ghz Core/RAM freq) in my computer. It cost me 300 dollars in March of this year. It now costs around 240 for a good deal. But this is a high-end card; let’s take a look at the midrange. For around 109 dollars (I saw a deal for this yesterday), you can get a 7600GT (12 pipelines, 520mhz/1.4ghz). This card is a little less than half as fast as my card, and it costs 50% of what you'd pay for my card now.
You can get X1900XTs for 250 dollars. These are faster than 7900GTs, and they cost virtually the same. At the X1900XT's debut, they cost almost $400. Welcome to faster videocards for less money.
And this is only going to get better. In about a month, nVidia is going to release their new card, code-named G80. It will have 768MB of RAM and a 384-bit memory bus. In February, AMD/ATI is going to release their new chip, code-named R600. It will have 64 unified pipelines, and probably be the fastest chip to date. What does the introduction of a new technology do to the existing technology? Makes it cheaper.
Increase in cost of next-gen Consoles and decrease in cost of high-efficiency computing
Microsoft’s Xbox 360 costs $299 or $399. The HD-DVD add-on is going to cost $199. Sony’s PS3 is going to cost $499 or $599, with a possible pre-release price drop to around 400/500 from 500/600. It comes with a BD-ROM. Nintendo’s Wii will cost $249.
Games for the PS3 are going to cost, on average, between 50 and 60 bucks.
So you want to buy a PS3, two games, and another controller? You’re looking at around 750 dollars.
At the same time, Intel released their Core2 processors. These are fast, run cool, and aren’t that expensive at all. What does that mean? $ per arbitrary performance per watt unit just went way down. The Athlon X2 had the crown before that, and AMD just cut all of their prices by an incredible amount. What does this mean for you? Let's look at how much it costs for you or me to build a small-form-factor PC now:
Barebones (Case, PSU, Mobo): 200
Hard Drive: 100
Video Card: 200
Optical Drive (DVD-ROM): 30
That’s for a Core2, 2gb RAM, 7900. In a Small Form Factor case. Total cost? Around 900 bucks. You better bet that Dell and HP can build it for cheaper than that. Oh yeah, and they both just acquired the two biggest players in the performance market. And Apple just announced a media center product.
What happens when Apple does something? Everyone follows. Dell just hired 500 new engineers last week. Coincidence?
So what does this all mean?
It means that Intel (and its livelihood) has caught on to IBM. IBM in the Wii. IBM in the 360. IBM in the PS3. IBM absolutely owning the American living room. Right now consoles comprise the vast majority of the Video Game market, and now they’re riding that into the media center segment with the 360 and the PS3. Dell and HP are scared because, well, what happens when you can type up a paper on your PS3? Their lucrative desktop market is going to disappear forever. They don’t want that to happen so they’re going to start changing with the times. First they’ll release some cheaper game-oriented small-form-factor PCs through Alienware and VooDoo, and later it will hit the mainstream. Apple already has the Mini and the upcoming iTV. No one is taking this onslaught lightly.
There’s a good thing in here though. Gaming is becoming a mainstream concern for HP and Dell, which means that it’s a mainstream market. If Dell and HP push PCs for gaming, you can bet that we’ll see an increase in PC Game sales. Make it as easy to use and it will be even bigger. That means more interesting titles for the PC.
2007 is going to be an interesting year.