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PS3 hardware and manufacturing cost estimated at $840

post #1 of 11
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El Segundo (CA) - Market research firm iSuppli has taken apart two of the first available PS3s and found that - not surprisingly - Sony may spend far more on manufacturing the game consoles than the retail price may suggest. The company is estimated to spend about $840 to build and manufacture the 60 GB model.
Quote:
According to iSuppli, Sony could spend $840.35 to purchase and assemble the hardware for the 60 GB Playstation 3 and $805.85 for the 20 GB model during the fourth quarter of this year. These numbers compare to retail prices of $600 for the 60 GB version and $500 for the 20 GB PS3 and reflect premiums of 40 and 61%, respectively. The manufacturing cost does not include shipping, a share for the retailer who actually sells the device and marketing cost, which typically are in the range of 5 to 10% of revenues.

Pricing a game console well below the retail price is not unusual; however, Sony is subsidizing the PS3 console more aggressively than it has been the case with other devices before. For example, Microsoft was estimated to spend $552 on manufacturing its Xbox 360 last year ($323 this year), which translated into an initial premium of $152 or $38% over the $400 retail price. The PS3's premium is 58% higher for the 60 GB model and even 103% higher for the 20 GB version.
SOURCE: http://www.tgdaily.com/2006/11/16/ps3_teardown/
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post #2 of 11
Yep, thats why they're losing over $200 for each PS3 they sell... same thing happened with the PS2s.
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post #3 of 11
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Originally Posted by JacKz5o View Post
Yep, thats why they're losing over $200 for each PS3 they sell... same thing happened with the PS2s.
They could lose $600 by giving me one free though...
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post #4 of 11
Wow I was just gonna post this. Here is a little more info and links

Link
Its the cost break down for the PS3 Console and a couple more figures.

Quote:
But this time around, Microsoft will make $75.70 on every Xbox 360 it sells, not counting marketing and distribution costs. So while Microsoft won't need to sell a set number of games to cover its build costs, Sony will have to sell five to seven. That is a high hurdle. This is corrected from an earlier version that said Microsoft will lose $75.70 on each Xbox 360.
    
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post #5 of 11
same with the 360 which lost 125 on every unit. I don't get this; how do they eventually end up profiting?
post #6 of 11
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Originally Posted by The Hundred Gunner View Post
same with the 360 which lost 125 on every unit. I don't get this; how do they eventually end up profiting?

By selling games, cause once you have the console, your sure to buy games for it. And thats where they make up the difference, oh and the accessories. And online services like LIVE.
    
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post #7 of 11
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Originally Posted by The Hundred Gunner View Post
same with the 360 which lost 125 on every unit. I don't get this; how do they eventually end up profiting?
they make their money back on selling games, peripherals, accessories, but overtime, they will make profits,slowly. I just saw on ebay. A ps3 sold for $3800dollars, that is how you make money. And for those that think its sick and stupid that it is that high, simple economics of supply and demand.
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post #8 of 11
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Originally Posted by Geforce521 View Post
A ps3 sold for $3800dollars, that is how you make money. And for those that think its sick and stupid that it is that high, simple economics of supply and demand.
Yeah, i'm so disappointed i didn't pre-order one. I don't want one, i just wanna sell one
post #9 of 11
Quote:
Originally Posted by Geforce521 View Post
they make their money back on selling games, peripherals, accessories, but overtime, they will make profits,slowly. I just saw on ebay. A ps3 sold for $3800dollars, that is how you make money. And for those that think its sick and stupid that it is that high, simple economics of supply and demand.
In addition to the above the cost of manufacturing also will go down over time. They'll get more manufacturer's online and get better pricing from the their suppliers. Also the cost of manufacturing the chips will fall. Unfortunately this is also offset by the falling price of the player. You can be sure that they'll also do some sort of online subscription service. I'm not going to get mine till the summer perhaps. I'll be building a DX10 rig in Jan/Feb, so that should keep me going for a little while.
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post #10 of 11
They dont get alot of money per game... Most of it goes to the manufactorers and game makers themselves.
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