GPUs in PS3/X360... how did they do it?

[VG Docs]

I've been doing a bit of research lately on the components of the 7th gen and 8th gen consoles. The 8th gen consoles make sense in terms of how they're making a profit. The PC equivalent (Or close to, at least) GPUs aren't very expensive, so I can see how Microsoft and Sony would be making a profit off them. 

In my (small amount) research, I found that the PS3's GPU is (on a basic explanation) nearly the same as a 7800 GTX. The Xbox 360's uses the R420 GPU, although I'm not familiar with it (I started learning tech stuff after 2010), it seems that the Radeon X8xx series is what uses that GPU. As far as I'm aware, the 7800 GTX is very similar in performance to the X8xx series cards. The retail price seems to be $600 for the 7800 GTX.

If that's true, then how in the world did Microsoft and Sony make a profit off those consoles? Also, why does it seem to be that the PS3/X360's GPUs are so much better for the time they came out?

[AlwaysFSX]

They didn't make a profit off the consoles. They both lost hundreds of dollars every time one of them sold. They only made some money back selling games.

[OriginalPromise]

They made profit off of the games. 

With huge licensing fees and rigorous pricing, Microsoft and Sony was able to turn their losses into a profit.

 

These videos should explain everything pretty well. 

[Aniallation]

PS3 has pretty much a straight up 7800GTX. Console manufacturers obviously implemented them at reduced cost from NVIDIA and AMD, but remember that on launch these consoles were still hella expensive. Even then though, the hardware wasn't the profit point, it was the accessories and games

[connorpiper]

Sony lost tons on the 1st gen PS3s. Remember they had a PS2 jammed in them too. 

[Interfectorem]

Every time Sony sold a PS3, they actually lost a lot of profit. But they made it back in games, overpriced accessories etc.

[TheKDub]

I'm fairly sure that consoles are using APUs instead of actual GPUs.

[VG Docs]

They only made some money back selling games.

They made profit off of the games. 

With huge licensing fees and rigorous pricing, Microsoft and Sony was able to turn their losses into a profit.

they made it back in games, overpriced accessories etc.

I see, so then wouldn't they be able to do the same with these 8th gen consoles? The GPUs aren't that bad, but they don't seem to be anywhere near as good for the time of release.

[Interfectorem]

I see, so then wouldn't they be able to do the same with these 8th gen consoles? The GPUs aren't that bad, but they don't seem to be anywhere near as good for the time of release.

Yes. I remember reading an article that the total cost to manufacture the PS4 is $381, so Sony gets $19 of profit every time they sell a unit, unlike last generation, where they lost hundreds.

[AlwaysFSX]

I see, so then wouldn't they be able to do the same with these 8th gen consoles? The GPUs aren't that bad, but they don't seem to be anywhere near as good for the time of release.

They could have but they wanted to cheap out and not spend as much on them. Wouldn't be that hard to get a 290x from AMD and chuck it in the PS4 with adequate cooling but Sony's profit margin would have gone down.

[OriginalPromise]

I see, so then wouldn't they be able to do the same with these 8th gen consoles? The GPUs aren't that bad, but they don't seem to be anywhere near as good for the time of release.

Why would they?

Microprocessors, unlike back then are more powerful and cheaper. 

Now since the market is big enough, Sony and Microsoft doesn't need to endorse their consoles that way.

[lookoutbelow]

They sold them at a loss. It's known. And, apparently, they're not making the same mistake again.

[EpicAdom]

They sold them at a loss. It's known. And, apparently, they're not making the same mistake again.

But the Xbox 360 and PS3 were successful...

[lookoutbelow]

But the Xbox 360 and PS3 were successful...

After 7-8 years? Not surprising. Sony nearly went bankrupt because of the decisions they've made.

[EpicAdom]

After 7-8 years? Not surprising. Sony nearly went bankrupt because of the decisions they've made.

Eh true, but the last few years of those 7-8 they are makin' bank. Sony and Microsoft could've made the "next gen" consoles more powerful to the point where they would only lose $50 per console. Or whatever dollar amount. They COULD HAVE done it, but they didn't.

[GeathX]

I see, so then wouldn't they be able to do the same with these 8th gen consoles? The GPUs aren't that bad, but they don't seem to be anywhere near as good for the time of release.

Fundamentally it does come down to money and perhaps they saw the threat of phones and tablets taking over gaming that they didn't want to look too expensive for a purely gaming machine.

The technology is also very different now to when the 7th gen launched. GPGPU was hardly a thing back then, CUDA was starting to come around with OpenCL. So while the GPUs are maybe not as high tier in comparison, they are highly programmable and flexible in what ever way game developers want to use them. They could focus on really simplistic graphics but then use the rest of the GPU for intricate physics based effects or game play elements, or go the other way or a mix of both. While they might have saved a bit of money on the GPU side, at least with the PS4, they put in a good amount of fast RAM. Currently about 5 of the 8GB is available to developers, which can change over time as it did with the PS3, which again gives devs a bit more freedom design wise.