It was clear that the cost of producing PS3 units were high for Sony, forcing the company to charge $600 per unit, but now we know exactly how high. Next-gen.biz has offered a full analysis of Sony’s expenses. As it turns out, Sony is losing $306.85 for each 20GB system sold and $241.35 for every 60GB system.
The full production cost for a 20GB system is a whopping $805.85, with the 60 GB coming in at $840.35. Chief among the expenses are the RSX graphics chip at $129 and the Blu-Ray optical drive at $125. In contrast, the $400 Xbox 360 only costs $323.30. For the first time in its five-year console publishing history, Microsoft is making a profit on each system sold.
For those wondering about retailers, it should be noted that stores make almost no money selling consoles. Retailers such as EB Games and Wal-Mart make money on software and peripheral sales.
The steep cost of producing PS3s won’t last forever. In general, the longer an item is produced, the cheaper it becomes to manufacture. Over time, the cost of the PS3 will get lower as the cost of parts gets cheaper and production becomes more efficient. That doesn’t guarantee Sony will ever make a profit on selling the system alone, but it can still bank on earning a hefty paycheck from software sales and digital downloads.
The bottom line is that no matter what it costs Sony to make one, you only have to pay $600 to own it. In that sense, you’re getting a hell of a bargain when you purchase a PS3.
Source: IGN
:wtf:
thats a lot of games n shit to sell before they make a profit!
When we are able to get XBox 360 and PS2 and PS3 at my work, we only get them for $5 less than retail. Add in the charge card transaction and you take a loss.
yeah don’t the games cost like 80 bucks? thats def profit. same thing with the original xbox, microsoft lost tons on the system but the games they made a shitload of profit off of to compensate.
i bet after sooo many units they start to make a profit…maybe the 1st few runs they may lose a little…but also like what was said accessories and games are the killer
I don’t believe those numbers. Wonder what Sony is actually paying in wholesale dollars for the graphics chip and the drives. They’re in business to make a profit… I don’t think they would take such a huge hit.
You have to think in terms of yields. On a complex new chip like this, there is bound to be process problems that crop up, increasing scrap and decreasing the number of good parts you are getting from a wafer. The larger the IC, the less you get on a wafer as well, so the worse the yields, the more money you end up throwing away when one doesn’t work. The most microscopic scratch on the surface can kill an IC, so it is very easy for the costs to escalate, and they are probably implementing some kind of screening to recover anything they can, which increases labor costs. All of this factors in to how much they make or lose on every console.
