Report: PS3 manufacturing costs drop 35%

Each $399 80GB console now costs only $449 to make, reports iSuppli; Sony could break even on production after next hardware revision.

In November 2006, computer hardware research firm iSuppli initially estimated the production launch-day cost of each $599 60GB PlayStation 3 as being $840.35. By mid-2007, it had lowered that figure to $690.23, thanks to improvements in the manufacturing process and supply chain. Later that year, the 60GB and 20GB PS3 models were replaced by 80GB and 40GB editions priced at $499 and $399, respectively.

Now even less financially painful!

Now, the month after the PS3's second birthday, iSuppli's Teardown Service arm has released its latest manufacturing-cost estimates for the now-$399 80GB model. The latest revision of the console--which has no PlayStation 2 backward compatibility--reportedly costs Sony about $448.73 in parts and labor, a 35 percent reduction from summer 2007. The 40GB model was discontinued this past summer, and no mention was made of the new $499 160GB model, which comes bundled with Uncharted: Drake's Fortune.

iSuppli credits the savings to the 65nm production process of the PS3's Reality Synthesizer (RSX) graphics chip, made by Nvidia, and Cell CPU, produced by Toshiba and IBM. (Sony had produced the Cell itself but sold its production facilities for the chip to Toshiba late last year.) The new process allows for the "integration of discrete components into the core silicon of the PS3, dramatically reducing the [non-silicon] component count." Whereas the original 60GB PS3 had 4,048 individual components, the new version has just 2,820.

The dramatic reduction of parts and other increased efficiencies may soon help the cash-strapped Sony achieve a long-sought-after goal for the PS3: hardware profitability. "With its new-generation PS3, Sony has come closer to breaking even, although it probably hasn’t quite reached that mark yet," explained Andrew Rassweiler, director and principal analyst of iSuppli's teardown services.

Rassweiler thinks that the next revision of the PS3 hardware, likely due sometime in 2009, could see the console cease to be a loss leader for Sony. That would help it join Nintendo, which makes a modest profit on each $249 Wii it continues to sell at a staggering rate. It is unclear how much money Microsoft currently makes or loses manufacturing the problem-plagued Xbox 360, the hard-drive-less Arcade variety of which now costs just $199.

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Discussion

769 comments
plasticbox1990
plasticbox1990

I have t osay i respect sony for selling the PS3 at a loss & does anyone know when the next console revision is cause i might buy the PS3 then

Newsted_22
Newsted_22

that's aweful for Sony for losing so much money creating the PS3 - they better stick with that console until it's 10 years limit like the PS2 has reached in lifetime and wait for PS4 :P

Kenshin100
Kenshin100

I still like the PS3 and the games for it.

brendanhunt1
brendanhunt1

infertileninja The ps3 cost $850 to make when it was released, no one would buy it at that price

ssnake18
ssnake18

i love my ps3 no matter what happens =)

ssnake18
ssnake18

[This message was deleted at the request of the original poster]

stalepretzels
stalepretzels

Very few games use the awesome power of the PS3. In fact, I think that the only one that has come close to doing so is MGS4. Killzone 2 is a perfect example of what we thought the difference was going to be between PS3 and 360. And what ps3 owners get is the 360 beating out the graphics of the ps3 over half of the time. >:(

InfertileNinja
InfertileNinja

I find it strange that they would create a console that would actually cost them money with each sale. Are they expecting to make money back on game sales or accessory sales or something? Because, I'm pretty sure you want to make money on both, not just one

bsgagan69
bsgagan69

cant they release games in ps2 or psp.most of the people dont want to buy a ps3 now because of its price.

potshot11
potshot11

all the ps3 fanboys can suck it

Mini-15
Mini-15

the ppl who use wikipedia as a source are stupid because readers can change the information

polodoro
polodoro

Honestly these stats are wrong. The PS3 could easily cost under a hundred dollars to make, which would explain sony's enourmous net income. There would probably be only $10 of metal in a PS3, get machines to build all the components for you and produce on a mass scale - Ta Da, an incredibly roadworthy console that is as cheap as chips. Honestly, we are all being ripped off.

akiwak
akiwak

I am surprised that they haven't taken out the wi-fi, almost all gamers that I play with online have a direct hard line hooked up with the occasinal lagger using wi-fi.

alixkid
alixkid

Sony Cann't Afford a Price Drop if they do imagine how gutted the Ps3 would be. You might as well call it the Ps2.9.

Richard7666
Richard7666

Interesting. I'd have expected the cost of the GPU to have *risen*, considering nVidia haven't made 7 series chips for well over a year, other than specifically for the PS3. I can't help but feel something is wrong here, though. You could easily gather those parts (well, their desktop counterparts) for far less than that. In particular, there is NO WAY a 160GB hard drive can justify an extra $100 over an 80GB. That is simply madness.

Strigidae
Strigidae

@polodoro: My point exactly... I'm saving up to buy a PS3, so that I can multi-platform. But lord knows how pissed I am about these corporate fat-cats that just rip off hard-working consumers into buying something that costs less to make. Maybe around about 2011, will I have saved enough for and entry level PS3 (LMAO). If it weren't for MGS4 and Uncharted I wouldn't have bothered.

Strigidae
Strigidae

[This message was deleted at the request of the original poster]

polodoro
polodoro

Honestly these stats are wrong. The PS3 could easily cost under a hundred dollars to make, which would explain sony's enourmous net income. There would probably be only $10 of metal in a PS3, get machines to build all the components for you and produce on a mass scale - Ta Da, an incredibly roadworthy console that is as cheap as chips. Honestly, we are all being ripped off.

SteelTiger360
SteelTiger360

i wonder what the next redesign is going to be like, I heard they already taken away the SD ports on the side, and reduced the USB ports to two unless that's the 40 gig i'm thinking of, but I'm just glad I got one before they removed the BC out which was kinda odd and a bit of a let down for future PS3 owners, considering how the PS2 is still making money these days.

Inconnux
Inconnux

If I want great graphics, I fire up my PC and until a bluray movie costs the same as a DVD I'm not interested. Price is the main motivator when It comes to consoles and Sony is paying the price for its failure

gobbo00
gobbo00

[This message was deleted at the request of a moderator or administrator]

Adziboy
Adziboy

I'm actually glad in some ways by the expensiveness of the PS3 when it first came out. These days, so many kids, and by kids I mean extremely young (below 11 or 12) are buying there own consoles, with there own money. The PS3 was a stupid amount to pay when the Xbox was there, already out for a year or something? The majority of players I find on the PS3 are more mature and a lot more fun to play with than people on Xbox, although I'd like to mention I do enjoy the Xbox. The decrease doesn't affect me though - I've got my PS3 and am happy with 60 GB.

Autolycus
Autolycus

[This message was deleted at the request of a moderator or administrator]

Autolycus
Autolycus

@ EnderSR388 PS2 was huge because it was also a DVD player. You'd be foolish to not think that Sony was hoping that it could help standardize it's number 1 goal in life(right now) which is to make blu-ray the ultimate video standard. Sony has stated, many times, that they want Blu-Ray to become a standard, it's not hard to figure out why either. EVERY COPY OF EVERY SINGLE THING that goes on blu-ray, the blu-ray forum gets a cut of (thats per disc) Sony is the number 1 benifactor of the blu-ray forum. Long story short (Since i left this window open all night). Sony has spent more money in the history of the company, EVER, to make sure blu-ray becomes a standard. And one of the reasons is because they love the control (and the profit) of being a standard. That's why blu-rays are still 25-40 dollars. An nobody cares about your crummy 19.99 blu-ray movies.

Spider-Jim
Spider-Jim

Like sony cares! They have their greasy fingers in every pie imaginable from movies to music and videogames. They know what they're doing. (Goddam greedy corporations rassum frassum!@!!

remark666
remark666

its crazy how a company can decide to make something without making profit on it, infact loose money on it, crazy move! though i guess they can afford it...at the cost of all those people loosing their jobs though @ alixkid - and btw the ps3 has been rebuilt but not because its having problems, to make it better, easier to work with and reproduce, it even mentions it in this article... my 80gb ps3 hasnt crashed, havent had to send it in, i've bought it when it just came out, so is my friends, works just great

RAVEZero
RAVEZero

Still waiting for my damn price drop.

shakensparco
shakensparco

The PS3 is just too expensive for a lot of people. The graphics are good, but at what cost? Not everyone has $400 in their pockets when they can get a 360 for $200. Sony has been a little too ambitious. Whether you are a fanboy or not, the price difference is undeniable.

freeformrulz
freeformrulz

well if the sony wants to sell more ps3 units i recommend they bring back the backward compatibility chip. i mean comon who da fk is gonna spend fkin money on ps2. I was seriously thinkin of gettin 1 buh they stopped selling those type sept 2008 which was ridiculously gay

alixkid
alixkid

Every Sony Fan boy is ragging on the 360 being built poorly. Before you talk take a look at the Ps, Ps2 , and finaly the Ps3 all these console have been rebuilt too meny times, we won't even talk about the ps. The Ps2 alone was rebuilt over 15 times do to over heating issues, and already the Ps3 has been rebuilt how meny times so far???? say it with me 6 times and counting so get your facts before you talk crap. 360 isn't perfect, but its kicking you Sony Fan boys @$$

Fryzam
Fryzam

Mikeyg756. How would you explain the Wii. Nintindo has brought main stream home gaming almost single handedly, but yet you hear about the 360. I'm a sony fanboy myself but yet I don't have a ps3 because of the huge price tag. I'm glad they are finally going to break even. This is a lesson that i think sony needed to learn.

TheArcade
TheArcade

@greenhillscone: Source please?

02sfraser
02sfraser

that fantastic news for Sony and maybe even consumers. price cut? probably not but if they break even it may be possible

mikeyg756
mikeyg756

To be honest though, alot more games went to the ps2 last gen becuase the ps1 done well, so developers could trust sony becuase of there past expeirence, so microsoft looked less attractive seeing as they had just entered the industry. Now though, i think things can only get worse for sony and better for microsoft. Now and the future is all gonna be about online and i think microsoft will always do that better than sony and you can tell from many past sony exclusives going multiplatform that microsoft is looking more attractive to developers.

dmish82
dmish82

@BlackDragon110 Oh and I also agree with the "wait til ______ comes out". I don't think one single game will change Sony's luck but I think the Sony library we all loved on the PS2 minus a few games that went multiplatform will be enough for Sony to reclaim their lead in the long run.

dmish82
dmish82

@BlackDragon110 I don't think anyone is thinking things have been rosey for Sony and if they do think so, they're living in fantasy land. Here's something we both agree on.

HighlyToxic
HighlyToxic

$400 may be good value, but that's still a lot of money to a lot of people in this economy.

EnderSR388
EnderSR388

@ Autolycus I worked at the now defunct CompUSA when the PS2 was released. Sure we sold all 75 units we had, but there was nothing to play on it that was decent until a year later. I remember the Dreamcast doing the same thing a year earlier. They sold out every around my city, you couldn't find one anywhere. It had some pretty bad launch games as well. A lot of people are still looking at these as game consoles first and entertainment centers second, myself included. If a system doesn't have strong games released for it, it doesn't matter what other bells and whistles it has. I bought a PS3 to play games, so it's an added bonus if it happens play BR as well. But that wasn't the selling point for me. The selling point was MGS4 for me, in which I bought a PS3 just to play. So if the PS3 is being primarily being sold/used as an inexpensive Blu-ray player, shouldn't Sony have just released a BR player instead of a game console?

BlackDragon110
BlackDragon110

I'm sorry but at what point did I ever cout out the PS3? I just pointed out that things aren't as rosey as people make them out to be. Most people don't want to admit that Sony stumbled badly with the PS3. It's always the same , "wait until (place title here) comes out" or "wait until ____ happens". For me it's not about ragging on the PS3, I never have. But most people don't like it when you point out problems about their favorite system.

Autolycus
Autolycus

And as far as the life span, as I originally stated (including the reason why), right now the console's hardware is too advanced for developers. ESPECIALLY the PS3, which is so unique (and not designed for video games, and trust me I know better then you on this one). I am a computer person, I read every single little detail about the XENON (360 processor) and CELL (ps3 processor). There are massive pro's and con's of both and when it comes to video games, the XENON is a much better processor to write games for. And lets not forget, MS is a SOFTWARE company. That's their specialty....hardware is Sony's. Sony also doesn't develop or manufacture their CELL processor's anymore. They sold the rights off to TOSHIBA and IBM about 1.5 years ago.

Autolycus
Autolycus

@shyshyshy I repaired, on average about 10 ps2's a day, before sony said any repairs not completed by Sony voided their warranty. Then I had to tell those average of about 10 a day, to call 1-800-345-7669 (which is 800-345-sony) and inform the customer that they would have to pay to ship their console over to Sony, they will repair their bad lense and ship it back. I had countless meetings with Jan, our Sony rep and she just kept saying to have the customers call the number, even 5 years after the console's release. It was MASSIVE, mutli BILLION dollar problem for Sony and they got sued even more then Microsoft, including (if I remember correctly) two class-action lawsuits. The PHAT ps2 had 5 different versions (aka remanufacture processes to cut costs) in which every single one, still had a "disc read error" problem. Finally, after costs where so cheap for Sony they put in a 5 diode "eye" (instead of a 4-diode eye) in the PS2 and the DISC READ ERROR problem was solved. This was at least 4-5 years AFTER they released the system. It took MS under 2.5 to get it right AND MS paid for all shipping costs, every time. And for the record, both MS and Sony sent their systems back without actually being repaired correctly and more so, just jury rigged to work. Some systems(including my 360) didn't last a month before having to be sent back (ps2 included). Now given that SOOOO many ps2's have been sold, there were, by far, more faulty ps2 then 360's. But if you are Sony fanboy and want to prove YOUR point, the percentage rate was higher on the 360 (probably, since MS or SONY wont release any actualy numbers for either side of the story).

Autolycus
Autolycus

@EnderSR388 I dont know where you were in life when PS2 came out but I was working in the video game retail sector when PS1 came out, PS2 came out and PS3 came out. PS2 was not a slow adoption by any rate what so ever. What did it have to compete with at first? The dreamcast, Nintendo 64, and later on the XBOX (which was a miracle that it survived at all, being the new kid on the block). PS2 was adopted faster then hell and DVD was just starting to pick up overall (because you couldn't find VHS sales much anymore, unlike today, where DVD's outsell BLU-RAY 8 to 1, minus major titles like Iron Man and Dark Knight (where its 3or4 dvd's to 1 blu-ray). Now that Blu-Ray has been hacked(including BD+ which was present by the Bluray forum as UNHACKABLE, which is why the movie studios went with it), the movie studio's won't continue to pay the extra dollars in publishing to see a minimal return. And for the record a 720p is only 4GB large...(.mkv stream file if you care to lookit up) Everything that blu-ray HAD going for it, is now going against it and price is a HUGE factor, including PUBLISHING PRICE

TX360
TX360

@arcade LOL you think MGS4 is enough despite you losing bigger exclusives FF and Tekken both huge yet MGS4 is all you need one word Insecure.

shyshyshy
shyshyshy

To those who said, the PS2 had more problems than XBOX 360. Hey, I don't remember having problems with my PS2. I even had the phat one, which was--gee I don't know, about 6 years ago, probably the launch console. I don't even mind all too well how much I should play with it not like my xbox 360, wherein I have to break a sweat everytime I plug it in hoping its blood shot eye (RROD) wouldn't pierce me with its heart-sinking stare. I admit, I am a hypocrite--loving the other team while I own another. But can you blame me? I own an XBOX 360 knowing that its cheap and probably the only console I'll own until I rob a bank--which would be pushing it really. I can dream of the Blu-Ray glory but I should probably stick with the conventional ones--the ones that are popular and can still deliver many times over, like dual-layer disks. And I know, the reason why the XBOX 360 is very popular is because of the mods (that's just one reason and not the only reason, so don't crucify me). I'm sorry but I had to get that out of my chest and I'm not afraid to admit it. And its not like I'm revealing something so shocking that thunder strikes me, The PS2 got so popular too because of that reason (that's just also one reason only). And until these things come really cheap I guess I'll buy a PS3 console, heck I'll buy everyone a console. But I'm probably throwing one heck of a punch at the moon--it's never really gonna happen, at least not anytime soon.

elvoret
elvoret

im in the netherlands and we can only get content by creditcard no prepaidcard option for us, it really sucks

jadefury27
jadefury27

this is all good news and all but since when do the hardware developers ever do the smart thing in these situations? i didn't have too much of a problem with the launch price as i did so much with fact that they could've at least given u a friggin' hdmi cord with it, and\or at least a pre-paid card for online content.