Feeds

PS3 component cost halved in 12 months, analyst claims

Console's parts now cost $400, apparently

Internet Security Threat Report 2014

Sony's PlayStation 3 costs just $400 (£200) to make these days - about half of what the console cost to produce when it was launched in November 2006.

So claims Nikko Citigroup analyst Kota Ezawa, BusinessWeek reports. Ezawa puts the reduction down to increased volumes, cheaper components but most particularly much-reduced Cell processor and GPU fabrication costs thanks to improved yields.

Market watcher iSuppli took a PS3 to pieces in November 2006 and calculated that the cost of the components in the 60GB console was $840 - $241 more than Sony was asking punters to pay. Nvidia's Reality Synthesiser graphics chip contributed $129 to the total, the Cell chip a further $89. The Blu-ray Disc drive cost $125, iSuppli estimated.

Back then there was a shortage of blue laser diodes, a key component of both Blu-ray and HD DVD drives. That tightness eased mid-way through 2007, with Blu-ray hardware prices falling rapidly as a result.

Likewise, Sony and Toshiba have become better able to punch out more working Cells per wafer, with a proportionate reduction in the cost of each chip.

If Ezawa's correct in his analysis, that means Sony's making a decent profit on the $499 80GB PS3 and is probably doing the same on the $399 40GB version, because it contains fewer components.

But that's only part of the story, of course. Sony has to pay for assembly, distribution, marketing and advertising, and out of the retail price of each console its supply channel partners will take a cut. Sony needs to push down production costs further if it wants to make money on the hardware.

Software is more lucrative, but until there are many more PS3 owners out there buying games, Sony's cut from software sales isn't going to generate spectacular profits. Which is, of course, why the PS2 remains such an important product for Sony.

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Chipmaker FTDI bricking counterfeit kit
USB-serial imitators whacked by driver update
Xperia Z3: Crikey, Sony – ANOTHER flagship phondleslab?
The Fourth Amendment... and it IS better
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Microsoft to enter the STRUGGLE of the HUMAN WRIST
It's not just a thumb war, it's total digit war
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.