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Sony PS3 'costs at least $805-840' to make

Analyst prices up console's production

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Sony's PlayStation 3 games console costs the consumer electronics giant at least $840 to make, $241 more than the $599 asking price, market watcher iSuppli has claimed. Its figure is its estimate for the cost of the materials and manufacturing, but Sony's R&D and marketing expenditure will surely push the console's unit cost much higher.

Like a number of reporters, iSuppli disassembled both the 20GB PS3 and the 60GB model. The cost of making the 20GB console comes to just under $806, iSuppli said, almost $307 more than the $499 asking price. Both iSuppli figures do not include the console's controller, cables and packaging, the company said.

Compare the numbers to iSuppli's estimate of how much it costs Microsoft to make a hard drive-fitted Xbox 360: $323, $76 less than the $399 retail price. Don't forget that in both vendors' cases the retail price is more than the company itself will receive, inflating Sony's loss and reducing Microsoft's profit margin. And Microsoft has had a year to drive up volumes and lower production costs.

Back to the PS3, the most expensive component appears to be not the Cell processor but Nvidia's Reality Synthesiser - as Sony calls it - graphics chip, at $129. The Cell chip, on the other hand, costs $89, iSuppli estimated. The Blu-ray Disc drive costs $125, it said.

Fitting the PS3 with an EE+GS chip to ensure backward compatibility with old PS2 and PSOne games - well, it's almost compatible - costs Sony $27 per console, iSuppli reckons. ®

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