Sony PlayStation 3 Costs $840 to Manufacture After All.

[Dave]

“With the PlayStation 3, you are getting the performance of a supercomputer at the price of an entry-level PC,” said Andrew Rassweiler, teardown services manager and senior analyst for iSuppli research company.

http://www.xbitlabs.com/news/multime...117130000.html

[JTK]

I believe it.

This machine looks and feels like something you'd spend about a grand on easily.

This is no surprise and it's nothing new. As the industry leader, Sony knows they can afford to take x amount of dollars loss on the sale of hardware and they'll easily make it up on the cost of software and accessory sales. This is about a $200 or so disparity and that's about par for the course these days.

MS was losing money on the sale of each Xbox 1 and I can't remember, but I think they're losing some money on the sale of each 360 as well.

That $200 or so mark is about the typical "acceptable loss" margin.


Nintendo is the only company that usually puts out hardware that they at least break even on and then start making a profit on shortly thereafter. <- This is very easy to do when you essentially recycle the GameCube hardware, overclock it, and charge an extra $100 for it. They'll be making a profit on the Wii right off the bat.

[hmurchison]

Holy Sony Subsidation Batman!

Sony must really want to win this battle. It may be Blu-ray but where the PS3 is concerned there is a lot of red .

I might have to do my due dilligence and buy a PS3 myself. It'll hurt Sony more than it'll hurt me.

j/k I've got nothing but love for Sony.

[hmurchison]

If I buy a PS3 it's because "I" want it not because of your shrill cheerleading.

[JTK]

Originally Posted by hmurchison

I don't give a shite what you believe. If I buy a PS3 it's because "I" want it not because of your shrill cheerleading.

https://forum.blu-ray.com/showthread.php?t=2692

Get over yourself.

[dialog_gvf]

I definitely think the bottom line number isn't unreasonable. What it seems to me is that they set the total, and then created a line item list to match it.

- The RSX (which people say is underpowered) is more expensive that the supposed superior GPU in the Xbox 360?

- It's more expensive than a Cell processor still at 90nm (wafer costs, yield issues)?

- A bridge controller costs $59?

- The the BD drive is only $125 when we know the laser diodes alone are expensive?

- A collection of unknown Other is the biggest line item, yet every key motherboard component, save the MB itself and the HDMI chip, is listed.

That last one is almost like a fudge factor to hit the desired number. Unless it can be fully explained. They say the entire populated Xbox 360 MB is only $50 or so more than misc components on the PS/3?!

Gary

[dialog_gvf]

Originally Posted by hmurchison

Holy Sony Subsidation Batman!

Sony must really want to win this battle. It may be Blu-ray but where the PS3 is concerned there is a lot of red .

I might have to do my due dilligence and buy a PS3 myself. It'll hurt Sony more than it'll hurt me.

j/k I've got nothing but love for Sony.

Except, they say the BD is only $125. Drop $100 and move the production back to last spring, and how much does the thing cost without BD THEN?

Gary

[hmurchison]

Gary

I don't care if it's subsidized. The PS3 is a great deal. I never cared that the A1 was subsidized either.

Hell I've been buying Sub'd hardware for years in cable boxes with DVR and other stuff.

Whatever is cheap and performs well bodes well for the consumer.

[dialog_gvf]

Originally Posted by hmurchison

Gary

I don't care if it's subsidized. The PS3 is a great deal. I never cared that the A1 was subsidized either.

Hell I've been buying Sub'd hardware for years in cable boxes with DVR and other stuff.

Whatever is cheap and performs well bodes well for the consumer.

Except, I think that perhaps the subsidy is one reason we see so few of the things.

Go back to the original projections 2/4 million. At $830 avg. that's $1.66/$3.32 BILLION (not including packaging, manuals, codecs, etc.). Does Sony have that much cash lying around? Or are their vendors EXTREMELY generous on terms?

And, even after you sell them all, you are left with a $1 billion loss! That was supposed to be the figure for 10 million units. A $100 per unit loss.

Remember a Toshiba comment on the slow pace of A1s? "We can only lose so much a month on this".

I gotta believe Sony has to watch the cash flow far, far more. These are staggering numbers.

Gary

[hmurchison]

Good point.

Kind of dovetails that recent article where the cost of Blu-ray drives will decrease to %50 of today's pricing. I'm assuming the optics will decrease at a proportional rate as well. Sony only need weather the storm and await greener pastures.

[JTK]

BD, like anything else, will benefit from this ancient rule of consumer electronics:

The longer it's out, the cheaper it gets.

[4K display]

One thing I don't see mentioned very often is purchasing power. There are alot of companies that have huge purchasing power, but in the console area specifically, no one can even come close to SCEI.

I'm not sure exactly how it works, but who else can go to vendors and pretty much guarantee 50 million orders on the low side and upwards of 100 million on the "ambitious" side, with history to back the numbers?
I would imagine a part is going to cost a specific minimum no matter how many you buy, but it has got to be a significant factor when your buyer is SCEI.

[dialog_gvf]

I'm not sure anything is guaranteed. The Xbox 360 has a permanent year head start. And the Wii is showing the masses aren't all that desperate to go full next gen.

It's like HD movies. People assume a lot. Oh, the players are going to be under $200 in a few years. Maybe. Not now, and now is when you need to sell lots to achieve the future. If everyone waits for $200, then it never comes.

In both cases it has been endless trash talk between two big camps. But, in the end, some other much cheaper alternative may sneak through and dominate (Wii/upscaled DVD and/or download rentals).

Gary

[mshulman]

Originally Posted by 4K display

One thing I don't see mentioned very often is purchasing power. There are alot of companies that have huge purchasing power, but in the console area specifically, no one can even come close to SCEI.

I'm not sure exactly how it works, but who else can go to vendors and pretty much guarantee 50 million orders on the low side and upwards of 100 million on the "ambitious" side, with history to back the numbers?
I would imagine a part is going to cost a specific minimum no matter how many you buy, but it has got to be a significant factor when your buyer is SCEI.

I'm not sure how it works, but SCEI probably makes deals with various vendors - they'll go with the lowest bidder. So I think its unlikely they'll guarantee 50 million orders with anyone. Not to mention history is that - history. It doesn't mean it will repeat.

One number I don't see listed in the prices are the R&D costs - that's got to be a significant chunk. All in all, Sony is already in the hole on those costs, but it still has to be factored somehow.