PS3 hardware still losing Sony money, claims analyst
Does my BoM look big in this?
Sony still makes a loss on every PlayStation 3 it sells, but the console’s latest, slimline redesign has brought the electronics giant closer to that crucial breakeven point, an analysis by market watcher iSuppli has concluded.
The first-generation PS3 was sold at $49.72 (£30.56/€34.17) less than its manufacturing and materials cost, iSuppli said. After a teardown of the new 120GB slimline PS3, iSuppli determined that the machine sells for $37.27 less than its materials and manufacturing cost.
Both figures also come in before the cost of promoting the product and shipping units around the world to sell. It also ignores subsidies on the price of games.
The 120GB slimline PS3's Bill of Materials teardown
“The PS3 probably is already at or near the tipping point for profitability," Andrew Rassweiler, Director and Principal Analyst of teardown services for iSuppli, said.
Sony’s total Bill of Materials and testing cost for the 120GB slimline PS3 was found to be $336.27 (£206.70/€231.15). The console retails for around $299 in North America and £245 in the UK.
Exactly how has Sony managed to cut production costs for the new PS3? Mainly by using less expensive semiconductors and fewer components, iSuppli concluded.
These “new” chips have also reduced the slimline PS3’s power demand, iSuppli added, allowing Sony to pair the machine with a 220W power supply in place of the first-generation PS3’s 400W PSU.
The latest model’s most expensive chip is the Nvidia-made Reality Synthesizer graphics chip, which iSuppli estimates to be priced at $45.82. The console’s Cell chip heart costs Sony $37.73 – 19 per cent cheaper than the one in the previous PS3. ®
COMMENTS
How much does OtherOS cost?
And why did they wipe it, if they say they're gonna have to support it in the firmware upgrades for the fat PS3's anyways?
This is real lameness on Sony's part.
Please bring back linux support for all future PS3s, do you hear, Sony?
Sent from my PS3 which is tunneling X thru' SSH to my little Eee while I'm cozy tucked up in bed...
Yeah yeah, I could be doing better things with my time. Why all the bother? Just to make a bloody point.
Some PS3 buyers are NERDS. And by GOD, Sony, you better appease us.
not quite
If you actually look at the facts and data it’s not as one-sided as you present them. True, Microsoft finally started making money on consoles. Problem is all the money they made so far is not even close to 2 billion charge they had to take on all repair related costs. And before that MS didn’t have one single fiscal year where entertainment division made profit. I’ve read somewhere that MS lost as much as 4.5 billion on original Xbox. Overall all, MS lost on consoles heck of a lot more money than Sony did. The fact that Sony is losing money on PS3 is nothing new and you’ll likely see that again in the future generations of consoles from both MS and Sony. Selling hardware at a loss and recouping it on software sales is business model common to consoles.
As for Sony being “obliterated”, I think you are being way off here again. MS holds slight edge when it comes to number of consoles sold, but you have take into consideration the fact Sony released PS3 year later than MS did Xbox360. If you compare numbers of units sold per year, Sony did better than MS. Add to that general consensus that PS3’s game lineup for next is stronger than that for Xbox360 and I’d say Sony is doing pretty well. Overall, I think it’s very competitive market with well-balanced players.
Despite you rejecting my first comment
$326.47 + $9.81 still doesn't add up to $336.27
The real loss...
... isn't in the hardware costs, but the research and development costs of Blu Ray (and thus the development costs of the PS3). The PS3 would have been out earlier, cheaper and a massive success if it wasn't for Blu Ray. Even just going with a Blu Ray data drive but not bothering with the movie support would have saved them a fortune and time.
They had their eye off the ball when they should have been looking at what the public were really interested in. Not movies, but fun controllers like the Wiimote. Wii might be rubbish, but the public loved the simplicity of it and the simple fun games. Yeah, they're idiots, but the idiots make up the majority.
Pedantic of the logistical kind
They may make their own BD drives but that doesn't mean they are made for free, the cost is probably what they have to pay the other division for the units.
