Change of product direction, good and bad news!

[maktos]

Perhaps they should release the DIY kits soon, at a price to accommodate "50% increases" in some parts -- and just be transparent about how much they're charging is due to said increase.

Also, would it be possible to put most of the "profit margin" into the motherboard/keyboard itself, and sell that separately as an option? Some people might own some of the chips involved already, and might prefer NOT re-buying various ICs and other components. Each person's lab and parts collection is unique.

I understand that just giving out the Gerber files and Bill of Materials would bring in 0 revenue for David and his team, who have already invested 5 figures in this project. I'm not asking for that. I'd say make whatever profit you intend to make off the MOTHERBOARD ALONE, and charge near cost for the components. That seems reasonable. After all, their product is the X16 (the motherboard/system they designed), not to be a competitor for Mouser or Digikey.

 

It's possible that the component price increases (mentioned by David) will be permanent, or semi-permanent -- no one knows. But at least we can each do our own personal calculus. Some budgets might demand waiting/hoping for a return to 2019 component prices, while other budgets couldn't care less.

Some people actually pay for restaurant (McD, Starbucks, etc.) coffee. Others are more frugal, and dining out isn't in their budget. ?

 

[Scott Robison]

2 hours ago, maktos said:

It's possible that the component price increases (mentioned by David) will be permanent, or semi-permanent -- no one knows. But at least we can each do our own personal calculus. Some budgets might demand waiting/hoping for a return to 2019 component prices, while other budgets couldn't care less.

The only problem I see with this (because you're right, we all have to figure it out for ourselves) is pricing boards properly, and the proper pricing is heavily dependent on volume. If you can only sell 10 motherboards the per board price will be much higher than for 1000. And that's part of the problem for quoting any price is knowing how many boards are really needed.

[Wonderdog]

The uncertainty of eventual sale quantities of the x16 (and given that each stage needs to be successful to fund development the next, more affordable/mass appeal version) is the main reason that launching the x8 as an interim release makes such good sense to me - its practically no economic risk to Dave and the team to launch it. Right now the appeal of an expensive, kit form X16 has got to be very limited (and needs more work before it's ready for prime time). Given the increase in component prices, need to bundle the keyboard (to claw back the 50% down sunk cost and I presume, minimum order placed there) then making a decent enough mark-up to fund further development without going so high as to drive off too many of the already limited pool of buyers, there needs to be something to sell to keep the lights on.



Worst case the X8 doesn't sell well and so makes them no money for the X16 development, but as its already a completed, known good device ready to launch at a very low per unit manufacturing price point, then even with a few hundred sales it is likely to provide funds for the finalisation of the X16 device prototypes and also cover some of the teams existing sunk costs - making the eventual X16 kits that much cheaper to get out of the door (and so selling more, and snowballing up to developing the refined versions which can reach a wider audience, meaning more interest all round).



I don't see there being any way they will sell 4 figures of units of the X16 kit (given the price/hassle narrowing the market significantly), and without some money to work with, a splash kit release and pile of unsold keyboards might be all there is to show for it.

[Scott Robison]

4 minutes ago, Wonderdog said:

The uncertainty of eventual sale quantities of the x16 (and given that each stage needs to be successful to fund development the next, more affordable/mass appeal version) is the main reason that launching the x8 as an interim release makes such good sense to me - its practically no economic risk to Dave and the team to launch it. Right now the appeal of an expensive, kit form X16 has got to be very limited (and needs more work before it's ready for prime time). Given the increase in component prices, need to bundle the keyboard (to claw back the 50% down sunk cost and I presume, minimum order placed there) then making a decent enough mark-up to fund further development without going so high as to drive off too many of the already limited pool of buyers, there needs to be something to sell to keep the lights on.



Worst case the X8 doesn't sell well and so makes them no money for the X16 development, but as its already a completed, known good device ready to launch at a very low per unit manufacturing price point, then even with a few hundred sales it is likely to provide funds for the finalisation of the X16 device prototypes and also cover some of the teams existing sunk costs - making the eventual X16 kits that much cheaper to get out of the door (and so selling more, and snowballing up to developing the refined versions which can reach a wider audience, meaning more interest all round).



I don't see there being any way they will sell 4 figures of units of the X16 kit (given the price/hassle narrowing the market significantly), and without some money to work with, a splash kit release and pile of unsold keyboards might be all there is to show for it.

Agreed. The one good thing about the keyboards is even if they aren't all sold as part of X16 packages due to insufficient demand, I think there are enough Commodore fans out there that might like picking up a keyboard to go with their emulation or for general nostalgia. The audience of people who love Commodore is bigger than the audience that would go for X16.

[BruceMcF]

2 hours ago, Scott Robison said:

The only problem I see with this (because you're right, we all have to figure it out for ourselves) is pricing boards properly, and the proper pricing is heavily dependent on volume. If you can only sell 10 motherboards the per board price will be much higher than for 1000. And that's part of the problem for quoting any price is knowing how many boards are really needed.

Yes, that is one of the principle differences between pre-orders and crowdfunding ... with a crowdfunding campaign, you set a minimum volume required to breakeven at the crowdfund price, and that minimum volume determines the crowdfunding target required to launch.

 

[Scott Robison]

40 minutes ago, BruceMcF said:

Yes, that is one of the principle differences between pre-orders and crowdfunding ... with a crowdfunding campaign, you set a minimum volume required to breakeven at the crowdfund price, and that minimum volume determines the crowdfunding target required to launch.

And of course it's even worse than I alluded to (you're an economist I think, so I'm not trying to teach you anything, and I am likely simplifying this too much still, but I thought I'd write it out). Let's just say for the sake of argument David has invested $10,000, the smallest five figure number. I know nothing about cost of a board, so I went to PCBWAY and used their instant quote and picked some reasonable looking default values for an appropriately sized board.



WARNING! DISCLAIMER! THESE ARE NOT THE X16 PRICES! THESE ARE NUMBERS FOR A DEFAULT MICRO ATX SIZED BOARD FROM PCBWAY USED TO ILLUSTRATE ECONOMIES OF SCALE!

Cost to manufacture some numbers of board:

Qty 1: $147 + $20 shipping = $167 / board

Qty 10: $246 + $46 = $30 / board (interestingly close to the $27 / board price someone observed in a picture posted by Kevin Williams, I think)

Qty 100: $1,496 + $266 = $18 / board

Qty 1000: $9,995 + $1,824 = $12 / board

Cost per board to break even after the $10,000 investment:

Qty 1: $10,167 / board

Qty 10: $1,030 / board

Qty 100: $118 / board

Qty 1000: $22 / board

Multiple people have talked about the price of a board with appropriate or reasonable markup, but the markup above the bare cost to manufacture a board cannot be computed without factoring in the original amount invested to design said board.

Generally speaking, I know many people look at the price of something, think about how much it would cost them to buy the components, and feel like they're getting ripped off. "Why are you charging me $40 for software when it only costs a few bucks for a diskette, box, and manual if I do it myself?" They don't think about the huge up front cost to buy materials, labor to assemble, time spent designing and implementing the program.

In the case of an assembled board vs DIY kit vs bare board, the incremental costs per board are constant. A bare board costs $X depending on the quantity produced. The price of individual components will drop as the quantity ordered increases, which is one reason not to give people the "bare board without parts" option; it will drive up the price for everyone else, not to mention the support issues of people picking the wrong parts because they don't know better, and even a disclaimer of "no support" won't prevent there being some cost. An assembled board is the cost of labor.

Anyway, all the ideas of "how about just doing X to reduce the cost" really have no prayer of reducing cost in any meaningful way. The biggest volume of boards will be sold to people who will only buy a completed system. A kit vs completed build can save you labor cost, which is not inconsequential (unless you value your time), but there are overhead costs that have to be accounted for even if there isn't labor involved in manufacture. Just putting the kits or boards together in appropriate packaging will be a labor intensive task. All you have to do to prove that to yourself is to watch some of David's videos showing his days after the release of new software.

AGAIN: THESE ARE NOT THE ACTUAL PRICES! THEY ARE USED FOR ILLUSTRATION PURPOSES ONLY!

[TomXP411]

5 hours ago, Scott Robison said:

Qty 1: $10,167 / board

Qty 10: $1,030 / board

Qty 100: $118 / board

Qty 1000: $22 / board

And this is why the only people making a $100 computer are the Raspberry Pi Foundation. 

It's also why I've been telling people to expect the first gen Commander X16 to cost $400 or thereabouts.

[BruceMcF]

4 hours ago, Scott Robison said:

And of course it's even worse than I alluded to (you're an economist I think, so I'm not trying to teach you anything, and I am likely simplifying this too much still, but I thought I'd write it out). Let's just say for the sake of argument David has invested $10,000, the smallest five figure number. I know nothing about cost of a board, so I went to PCBWAY and used their instant quote and picked some reasonable looking default values for an appropriately sized board.



WARNING! DISCLAIMER! THESE ARE NOT THE X16 PRICES! THESE ARE NUMBERS FOR A DEFAULT MICRO ATX SIZED BOARD FROM PCBWAY USED TO ILLUSTRATE ECONOMIES OF SCALE!



Cost to manufacture some numbers of board:



Qty 1: $147 + $20 shipping = $167 / board

Qty 10: $246 + $46 = $30 / board (interestingly close to the $27 / board price someone observed in a picture posted by Kevin Williams, I think)

Qty 100: $1,496 + $266 = $18 / board

Qty 1000: $9,995 + $1,824 = $12 / board



Cost per board to break even after the $10,000 investment:



Qty 1: $10,167 / board

Qty 10: $1,030 / board

Qty 100: $118 / board

Qty 1000: $22 / board



Multiple people have talked about the price of a board with appropriate or reasonable markup, but the markup above the bare cost to manufacture a board cannot be computed without factoring in the original amount invested to design said board. ...

Yes.  The thing is, if the X16c would fund, at the minimum volume required for the customization of the Mini-ITX case or the Keyboard (whichever is higher), a normal mark-up will cover most development costs, and the sunk cost into the keyboards will be automatically recouped.

That is the challenge with the phase 1, phase 2, phase 3 process ... it had the pyramid upside down, with the lowest volume, highest price phase trying to kickstart the middle volume, middle price phase, which in turn is trying to kickstart the potentially highest volume, lowest price phase.

The way that the X8 + X16p DIY crowdfund launch would work would be by setting a funding target that can recoup the sunk cost in the keyboards.

Something like the following:

Support Tier: $10. A customized pdf of the docs with a signed thank you letter personalized to you, and unless you select anonymity your name in the supporter list in the prelude section of the docs, X16 and X8 emulators of your choice of system (Windows, MAC, the two largest Linux distros) and a year email notification of updates to the emulator/documentation.

• 
  Emulation Station Tier: $10+ project pre-order price of kbd. The above and the multi-mode PS2/USB project keyboard.
  


• 
  Premier Emulation Station Tier: Emulation Station tier plus printed X8 and X16 documentation, USB key with X16 project branding, install files for emulators plus install files for portable installations on the USB key
  


• 
  X8 bare board: Pre-order price of bare X8 board, drop-in SD card with included and demo programs & utilities.
  


• 
  X8 kit: Above and power supply, keyboard, printed X8 documentation
  


• 
  X16p DIY: Minimum 200, Maximum (a reasonable cap on kits that can be fulfilled), + keyboard + printed X16 documentation
  

And be sure to budget the crowdfund target so that the cost of the keyboard minimum order is covered, which necessarily recoups the 50% deposit. Pre-order Price the keyboard so that at 80% of the minimum order the purchase price plus a reasonable handling cost is covered.

So the first crowdfund bails out most of the buckets of red ink from the bilge of the Great Ship Project X16.

Now, if the first wave funds, there is going to be pent up demand for built systems. The X16p design was always much riskier than the X16c one, so while fulfilling the first campaign (never have the fulfillment and launch of the next campaign overlap) finalize the X16c design, and put together a new campaign.

• 
  Same three support tiers
  


• 
  X16c system, with keyboard and case, budget the minimum required based on minimum order required for case customization tweeks and minimum keyboard order.
  


• 
  X16p built boards + keyboard, with a narrow range between the budgeted required support for the tier to and the maximum order allowed.
  

Add up the X16c and X16p minimum budgets for the project to fund.

If the second campaign funds, the project is now in the black, including opportunity costs.

If the second campaign fails to fund, look at which tier let you down and see if you can restructure.

 

 

 

[paulscottrobson]

9 hours ago, Wonderdog said:

Worst case the X8 doesn't sell well and so makes them no money for the X16 development, but as its already a completed, known good device ready to launch at a very low per unit manufacturing price point, then even with a few hundred sales it is likely to provide funds for the finalisation of the X16 device prototypes and also cover some of the teams existing sunk costs - making the eventual X16 kits that much cheaper to get out of the door (and so selling more, and snowballing up to developing the refined versions which can reach a wider audience, meaning more interest all round).

 

If the X8 can be produced at the sort of cost mentioned, which I can certainly think it might be, given the cost of similar devices, then it's almost beer money (well, a good night anyway ...). I think most people who wanted an X16 may well buy an X8 as well. I'm not sure it works the other way round.

I think code is fairly portable between the two designs, especially if you design it with that in mind. The problem is the window design is capable of doing things that the pipe design isn't, if you wanted to do a vector game the frame rate would go up significantly.

But then the X8 could be the game machine version and the X16 the experimenters machine version, you could make the Kernel calls compatible and even provide alternate kernal versions to load VRAM, position Sprites and so on. (Though if you add SPI then you can pretty much connect anything you like anyway)

I think cost is important, always have. Some of the designs out there ; the Mega65 and the various Foenixes (?)  -ii (?) look excellent machines but it's an awful lot of money for a machine without a software base.  Even if X# never gets a significant software base (and I think both would get a reasonable one, though it's never going to match C64 levels obviously ...) it's not a big loss. WCS scenario for me for an X8 is that I can repurpose it as something else ?

 

[Wonderdog]

1 hour ago, paulscottrobson said:

The problem is the window design is capable of doing things that the pipe design isn't, if you wanted to do a vector game the frame rate would go up significantly

This is the single most important technical differentiation for Dave and the team to consider I think.



In fact, I'd go so far as to suggest deliberately crippling the X8 and forcing it to use the same 4 byte register loading process of the x16 design rather than using the 256bit  window to maintain documentation and code consistency between the two. After that, the capability differences are largely related to how much RAM and VRAM is available, and how many channels of sound - so backward compat with X8 software could be much more easily maintained on the x16.



This isn't as crazy as it might sound - as I'd assume a similiar intentional nerfing would need to occur with the eventual FPGA based x16e (which would also be capable of using the window as everything is in the FPGA), as otherwise it would require/offer software capabilities equally different to the kit/surface mounted x16's.



Seems wierd to suggest reducing the theoretical capabilities of a device to maintain forward compatibility - but lets be honest here, nobody is interested in the x8/x16 for their absoloute power - not when you can buy a quad core RPi with 4gb of ram for $30, so a minor performance loss is worth it to simplify the development process for software across the two, and minimise any refactoring or different tutorials/documentation needed.