PS3 manufacturing costs down around 70%

CFO Nobuyuki Oneda tells analysts Sony has cut console-making expenses by over two-thirds since 2006; unofficial iSuppli estimates point to $252 production price, resparking PS3 Slim speculation.

775 Comments

Yesterday, Sony issued a dispiriting April-June earnings report, which showed quarterly PlayStation 3 sales fell from 1.6 million to 1.1 million. The PS3's slowdown is ironic, as it appears to have come just as Sony got its console manufacturing house in order. In an English-language conference call following the earnings report, Sony CFO Nobuyuki Oneda was asked by an analyst to "give a sense of how much you've reduced the [PS3] cost to build since inception."

Sony CFO Nobuyuki Oneda
Sony CFO Nobuyuki Oneda

Oneda's response was vague--at first. "The cost reductions since we introduced the PS3 are very substantial and on schedule," explained the executive. "We don't disclose how much of the PS3 cost reduction was specifically achieved during the past two years. But that is on schedule."

Then, Oneda decided to throw a number out. "About 70 percent, roughly speaking," he said.

As its CFO indicated, Sony does not give out an exact production cost for the PS3. However, a hardware research firm has offered unofficial estimates on a regular basis for several years. Last December, iSuppli estimated that Sony spent $448.73 in parts and labor to make each $399 80GB PlayStation 3. The number was down from an estimated production cost of the now-discontinued 60GB PS3 model, which had backwards compatibility with PS2 games. iSuppli estimated that model cost $690.23 to make in mid-2007, when it was priced at $499, and $840.35 to make at its November 2006 launch, when it cost $599.

If Oneda's 70 percent figure is applied to iSuppli's $840.35-per unit launch-cost estimate for the PS3 (which has not been confirmed by Sony), the savings are a substantial $588.25 per unit. By that calculus, Sony would spend $252.10 to make each new PS3, the base model of which sells for $399. Theoretically, that would generate a $146.90 profit per console, not including packaging, transportation, and other costs.

While the combination of iSuppli estimates and Oneda's comments are interesting, they are by no means official. Indeed, earlier this month, Sony CEO Sir Howard Stringer appeared to scoff at the idea that PS3 hardware was currently profitable. In response to Activision CEO Bobby Kotick's call for a price cut for the console, the Wales-born Stringer quipped, "I lose money on every PlayStation I make--how's that for logic?" Furthermore, the newly formed division that contains Sony Computer Entertainment lost ¥39.5 billion ($415.6 million) last quarter--more than Sony's overall loss of ¥37.1 billion ($390.3 million)

The photo that launched 1,000 PS3 Slim rumors.
The photo that launched 1,000 PS3 Slim rumors.

However, there's a good chance that Oneda was referring to PS3s Sony is making right now, not last quarter. And one possible reason for the "substantial" PS3 production savings could be a reduction in materials resulting from a shrinking of the console's form factor--which has already been widely rumored. Sparked by an apparent photo leak in May, the past few months have seen widespread, repeated speculation about a 120GB "PS3 Slim," similar to the slimline PlayStation 2 introduced in late 2004. Though Sony offered no comment on the photos, a mysterious Taiwanese law firm sent cease-and-desist letters to several online news outlets that posted them.

Got a news tip or want to contact us directly? Email news@gamespot.com

Join the conversation
There are 775 comments about this story
775 Comments  RefreshSorted By 
GameSpot has a zero tolerance policy when it comes to toxic conduct in comments. Any abusive, racist, sexist, threatening, bullying, vulgar, and otherwise objectionable behavior will result in moderation and/or account termination. Please keep your discussion civil.

Avatar image for robx360
robx360

292

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

Would be nice to see the PS3 Slim at $199. I know It won't happen for along time though.

Upvote • 
Avatar image for SuperGogeta24
SuperGogeta24

1603

Forum Posts

0

Wiki Points

0

Followers

Reviews: 3

User Lists: 0

yet no price drop? stack 'em high sell 'em cheap thats how the ps2 sold so well...

Upvote • 
Avatar image for thekey
thekey

5097

Forum Posts

0

Wiki Points

0

Followers

Reviews: 23

User Lists: 0

@10679 You ever heard of a game called rage? It will be on one disc with very little shortcuts taken for the PS3 version. Ask John Carmack. And another thing the fact that the cell processor "hasn't impressed" is BS to it's fullest. Killzone 2, Heavenly Sword, MLB 2009 the show, MGS4(yeah I said it.)Uncharted 1, resistance 1-2, and Ratchet and Clank. (All games that take advantage of the "unimpressive cell processor", all games that have "superior AI than any 360 game in recent mememory.) All these games have a lot more different things going on the screen at one time. But none of this doesn't change the fact the PS3 is gaining ground and that the 360 still as of 2009 has a 39% failure rate. the PS3's is less than 5%

Upvote • 
Avatar image for deactivated-58bd60b980002
deactivated-58bd60b980002

2016

Forum Posts

0

Wiki Points

0

Followers

Reviews: 50

User Lists: 1

I had a Xbox360 but sold it to get a PS3. The only game that I liked on Xbox360 is Gears Of War, all my other games was also avalaible on PS3 so welll I enjoy more my PS3. It is dead silent ... this is just the icing on the cake. I think PS3 don't do well here just because their games aren't multiplayer FPS oriented.

Upvote • 
Avatar image for MrHatnClogs
MrHatnClogs

1337

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

@sorrow989 "belive me the current price is very good and don't need a price cut, but in the other hand if SONY want to compete with MS, they should get a price cut to 200-300$." It better not be right now because I got suckered in-I mean, decided to get the Prestige Edition of MW2!

Upvote • 
Avatar image for aambedextros
aambedextros

33

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

ill buy if the price is below $250

Upvote • 
Avatar image for mayceV
mayceV

4633

Forum Posts

0

Wiki Points

0

Followers

Reviews: 20

User Lists: 0

@wars45 use english I didn't understand a single word of what you said o.O

Upvote • 
Avatar image for Rook31
Rook31

25

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

I agree with a lot of you. I am a gamer and I own both the 360 and the wii. I primarily play the xbox while my daughter plays the wii. If the PS3 price dropped to the $200-$250 range I would probably buy one simply for the Blu-ray and the few exclusives that Sony has that I would like to play.

Upvote • 
Avatar image for Zerosumgame
Zerosumgame

1176

Forum Posts

0

Wiki Points

0

Followers

Reviews: 1

User Lists: 0

there are stuff that you can get from the rest of the world, and also in America, but there are also a lot of stuff that you can not get in America but you can get from other countries. keep the in your f$%ing mind. If Sony drop price again for PS3, it will put the already in trouble xbox to sleep for sure.

Upvote • 
Avatar image for Willceace
Willceace

349

Forum Posts

0

Wiki Points

0

Followers

Reviews: 2

User Lists: 0

Does this mean I'll be able to afford a PS3 now without having to buy it off of a burglar? yAy!!

Upvote • 
Avatar image for wars45
wars45

1458

Forum Posts

0

Wiki Points

0

Followers

Reviews: 13

User Lists: 0

soney go bankrupt has if did u khow 360 has lost a lot of money has well and the xbox never made a profit and arnt micrsoft been taken to court hadme ps3 2 y never brokedown mate had his 360 the same hes on his 3d 1

Upvote • 
Avatar image for sorrow989
sorrow989

25

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

@melty3219 yep we have, but with one little problem the internet is not DSL :( you know we even have the most advance PC hardware like the GTX 295 graphic card, the X-58 Extreme Mother board, core I7. :D

Upvote • 
Avatar image for melty3219
melty3219

443

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

woohoo sony are losing lots of money :D lets all have a bet and see how long they last before going bankrupt lol i saw about 2 weeks tops :P

Upvote • 
Avatar image for melty3219
melty3219

443

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

wow they have internet and PS3's in Iraq?

Upvote • 
Avatar image for hassy94
hassy94

471

Forum Posts

0

Wiki Points

0

Followers

Reviews: 1

User Lists: 0

At £200 or lower, I will try my best to buy it (and will definitely do so in the next 6 months). If not, no chance. I mean it's worth it, but not considering I already have an Xbox 360, so then I'll only be using the PS3 for exclusives, and I'm not paying more than £200 for a small library of games, as all multiplatform one's will be played on my Xbox, since I can party chat with my friends on it.

Upvote • 
Avatar image for sorrow989
sorrow989

25

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

@nathace i agree with you but if you look well you'll see minor difference between the rumors PS3 and the now in product PS3, as well assome difference in the packege.

Upvote • 
Avatar image for Johnnyb437
Johnnyb437

25

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

@WolfGrey I play any game that appeals to me. I don't really have a set genre that I normally play in. I am a gamer. I give every console its chance and actually own a ps2. The ps3 to me is just a glorified blu-ray player with a few good games at its belt. In all honesty, I so wanted a ps3 when it was announced, but they kept delaying and discarded the controller designs. Sony is still using the same marketing strategy that it used for the ps1 and ps2 and its just not working in this gen. The 360 may have its problems,(of which I haven't experienced any on my elite), but it backs it up with great online, good games, and great customer support. My ps2 broke down 5 times and sony didn't even awknowledge that there was a problem. I'm not trying to bash the ps3, but they do need to get their act together. If they lowered their price a bit, then I might consider getting one.

Upvote • 
Avatar image for nathace
nathace

175

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

"The photo that launched 1,000 PS3 Slim rumors." what the hell its just the ps3 from a birdseye view -__________-

Upvote • 
Avatar image for GameBeaten
GameBeaten

916

Forum Posts

0

Wiki Points

0

Followers

Reviews: 20

User Lists: 0

Honestly, I could do without uploading pictures and music on PS3.

Upvote • 
Avatar image for sorrow989
sorrow989

25

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

belive me the current price is very good and don't need a price cut, but in the other hand if SONY want to compete with MS, they should get a price cut to 200-300$.

Upvote • 
Avatar image for Memoryitis
Memoryitis

2221

Forum Posts

0

Wiki Points

0

Followers

Reviews: 8

User Lists: 0

Price drop and ill buy one

Upvote • 
Avatar image for tommkennedy
tommkennedy

30

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

about time.... hope to pick one up in the next sale... but no more than £200

Upvote • 
Avatar image for sorrow989
sorrow989

25

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

i bought a X360 last year, and casue I live in iraq the console just couldn't resiste the hot weather and it lighted the famous RROD in three monthes, and since that I'm a proud owner of the PS3, it's perfect sometimes my little brother keep it on for about 10-12 hours. So as an owner of both consoles I defintly prefere the PS3, but in iraq most of the gamers prefere the X360 casue it's games are sold for as cheap as 1.5$ (prated games) and they can't afford the PS3 games, which sold between 30-100 $(Orginal) and the price depands on the title and how long it has been released.

Upvote • 
Avatar image for ssjdagas
ssjdagas

492

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

I'd buy it for €250 and not a cent more. That has been the sweat spot for me since 2000 when I bought a DC for that price since the PS2 was too expensive at €450.

Upvote • 
Avatar image for moo223
moo223

187

Forum Posts

0

Wiki Points

0

Followers

Reviews: 13

User Lists: 0

Keep cutting why not?!? hell why don't you take the CD drive out too? i was gonna buy a PS3 and then they took the backwards compatibility out and the memory card slot. then i changed my mind and got a 360. Sony's loss Microsoft's gain.

Upvote • 
Avatar image for Jimmyjit
Jimmyjit

64

Forum Posts

0

Wiki Points

0

Followers

Reviews: 24

User Lists: 0

I burned out two 360's in one year. I now own two PS3's, one for Iraq, and one for home. It is a better machine, and owning a physical Blu-Ray copy rather than a download is the way I'm going. You can't "carry" a download to your friends house. Microsoft's red ring burned me like an automobile cigarette lighter. I'll stick with Sony for it's reliability.

Upvote • 
Avatar image for 3G-ENIE
3G-ENIE

456

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

As below, price cut and I'll buy another one.

Upvote • 
Avatar image for MitchBAM06
MitchBAM06

48

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

It doesn't seem logical to me that a company would continue to make a product where the production costs are almost 60% higher than the retail sales price. I will agree that sony was taking a hit on the system when it first came out, but it is my speculation that they started cost-cutting measures immediately after the console's release. I think although the division as a whole has been losing money for several fiscal quarters, the PS3 has become a profitable machine for Sony over the same period.

Upvote • 
Avatar image for werruraz
werruraz

330

Forum Posts

0

Wiki Points

0

Followers

Reviews: 2

User Lists: 0

@awsss Economic Recession...

Upvote • 
Avatar image for joesh89
joesh89

8489

Forum Posts

0

Wiki Points

0

Followers

Reviews: 308

User Lists: 0

price cut and ill buy one.

Upvote • 
Avatar image for 20darkspirit
20darkspirit

58

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

good

Upvote • 
Avatar image for CVM_123
CVM_123

1265

Forum Posts

0

Wiki Points

0

Followers

Reviews: 5

User Lists: 0

ps3 pwns!

Upvote • 
Avatar image for awsss
awsss

1370

Forum Posts

0

Wiki Points

0

Followers

Reviews: 1

User Lists: 0

Reduced to 90% yet you're still losing money sony? I wonder why that is.

Upvote • 
Avatar image for poetyc_vyzyonz
poetyc_vyzyonz

25

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

back in the PS1 days i thought Sony was too clever and couldn't lose, the PS2 was way ahead of its time...the PS3?...they blew it...they tried to use the same strategy as before when Sony's biggest competition at that time was the Sega Dreamcast...they blew them out of the water with the introduction of the ability to play dvd's on a gaming system.... I thought it was certainly a great idea to add Blu-Ray to there system, Blu-Ray is "the future"....but its too soon...dvd's are still selling like hot-cakes, and we are in the "download era" lol....Sony would be the superior system if we were about 5 yrs. ahead right now...but Xbox clearly has their number...hate to say it, (because i love to see competition swing back n forth) but things are looking favorable for Sony right now...Xbox Live, all the games, the new experience...etc. etc. etc...Microsoft isn't stopping...they've built up a full head of steam in momentum... strikes against Sony - they should have launched when they said they would...secondly they should have wait'd before they applied blu-ray in a still dvd-dominate era, and they should have did whatever possible to hold exclusive rights to their prize games!...i mean they lost exclusivity to Tekken 6!....lol...basically its "GAME OVER" for Sony....unless they put those think'n caps on properly...:)

Upvote • 
Avatar image for scottabc
scottabc

64

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

Quoted from Arabman: "Had the Sony Computer Entertainment decided to use a DVD format the PS3 would have been far, far more cost effect, and developers wouldn't have been put off from developing new IP in relativly unfamilar format. Probably would have had a cheeper launch price as well. More units moved and more developers would have probably put its library and sales neck and neck with the Xbox." Comments like this make sense on one level but Arabman and many others are forgetting that the blu-ray drive in the PS3 was part of a larger strategy to secure Sony's proprietary Blu-ray tech in the market. They knew all along their gaming market share was going to take a hit and I think it took a bigger hit than they expected but at the end of the day the PS3 has mostly succeeded in its mission to guarantee Blu-ray's success (against HD-DVD anyway) while still keeping a respectable place in the gaming market. By the way I think the 'full capabilities' of Blu-ray that we're supposed to patiently wait for are overrated & before anyone asks yes, I am happy PS3 owner just skeptical of corporate business policy.

Upvote • 
Avatar image for shakensparco
shakensparco

823

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

Its a good thing it got cheaper. What was the PS3 at launch? $600 and $800? Were people buying a game console or a gaming PC?

Upvote • 
Avatar image for rasterror
rasterror

3513

Forum Posts

0

Wiki Points

0

Followers

Reviews: 7

User Lists: 0

WolfGrey I like Infamous a lot but it didn't leave that truly lasting impression like LBP did. Uncharted was good but felt like it was the sequel Tomb Raider should have been. I am dying to play Uncharted 2 though.

Upvote • 
Avatar image for WolfGrey
WolfGrey

3799

Forum Posts

0

Wiki Points

0

Followers

Reviews: 5

User Lists: 0

I see someone is just going around and minusing all my comments for no apparent reason.I posted about a game exclusive for the ps3 and i get a minus. @mayceV Not much justice is there here?

Upvote • 
Avatar image for WolfGrey
WolfGrey

3799

Forum Posts

0

Wiki Points

0

Followers

Reviews: 5

User Lists: 0

@Arab-man666 One problem with this.The games it has now wouldnt work as wonderful as they do.The ps3 versions wouldnt be recommended over the xbox360 versions as they are now.Not to mention MAG would never exist.Once the bluray dvds are utilized to their full potential we will see some great games.I dont think even MAG will test its limits.Whats important is their capacity.With so much more capacity so much more can be done.Did you know ps3s are even being used as high performance computers in universities? With a price cut on its way and a profit margin now to be seen, the sales can only go up.It will finally be able to compete in price easily with its other contenders.

Upvote • 
Avatar image for mayceV
mayceV

4633

Forum Posts

0

Wiki Points

0

Followers

Reviews: 20

User Lists: 0

@izmickey um, yes bored of the console war. exepcially when every comment anyone ever says has to be rated down until its a negative 20. sheesh I mean I state opinion and everyone is like **** you. I don't want to change my view to make everyone "happy". Plus Ps3 bashing is dumb if I wanted to I would turn mine on sit myself in front of the TV, and cuss at the ps3 that way I can keep my opinion without "MayceV you're a F***ing fanboy" Why is it that I'm a fanboy anyway? The 360 is the only thing that I have thats from microsoft, 'n windows xp. Just because I have an opinion and just happen to state it I'm a fanboy? So what if I like the 360 more than the Ps3 what's it to you I still play Ps3. If I had a Wii I'd play it. Hell if I had my N64 I'd play it or my PS1. If my GC wasn't stepped on I'd play. If my Ps2 didn't get DRE then I'd be playing. I'm not a fanboy and I never will be. stop mistaking my opinions for me trying to "convert" you. I don't care what you do with your money. The only thing I have ever expected on any fourm is Respect. because I've never had the guts to try and Chop someone down because of thier views. Right now you seem like a Sony fanboy you don't see me blowing off steam by cussing. Why? because I don't know you. maybe yesterday one of us (god forbid) lost a loved one or was robbed. And maybe They went to this website to get thier mind off of thing (atlest for a while) the last thing either of us need is "hey shut up you supid fanboy" "or **** you"

Upvote • 
Avatar image for WolfGrey
WolfGrey

3799

Forum Posts

0

Wiki Points

0

Followers

Reviews: 5

User Lists: 0

@rasterror Try Demon's Souls when it comes out for a crushing difficulty and a great exclusive.I have it now because i imported it but i can safely it was completely worth it.You can get all the way to lvl 712(thats its max character lvl) and never get bored.So dam hard but so dam fun.Also infamous is worth a try along with Uncharted.

Upvote • 
Avatar image for Arab-man666
Arab-man666

2244

Forum Posts

0

Wiki Points

0

Followers

Reviews: 9

User Lists: 0

The PS3 is a mess. I admire sony for going out on a limb and using some tech in relatively unknown turf, but it really couldn't have turned out worse. Had the Sony Computer Entertainment decided to use a DVD format the PS3 would have been far, far more cost effect, and developers wouldn't have been put off from developing new IP in relativly unfamilar format. Probably would have had a cheeper launch price as well. More units moved and more developers would have probably put its library and sales neck and neck with the Xbox.

Upvote • 
Avatar image for WolfGrey
WolfGrey

3799

Forum Posts

0

Wiki Points

0

Followers

Reviews: 5

User Lists: 0

@DarkNeoBahamut Shock rifle does need a good amount of skill.Im not a fan of the rocket launcher.The kill is too...easy for me.Just boom dead.I rather tear them apart or blow them up with green ooze. I have played all of those.For now i cant play UT, however i have 2004 safely tucked aside for my new laptop coming in to be installed again.If not just UT3.My fav will always be the original UT. R.I.P. the ripper.

Upvote • 
Avatar image for rasterror
rasterror

3513

Forum Posts

0

Wiki Points

0

Followers

Reviews: 7

User Lists: 0

Solid_Azeus I have always felt I got my moneys worth out of my 360 and my PS3 broke twice and my 360 once. And only started enjoying my Ps3 as of lately but the titles are still slim and not that amazing, except for LBp. All of the other exclusives just seem like remakes or expansions of a good concept.

Upvote • 
Avatar image for DarkNeoBahamut
DarkNeoBahamut

2251

Forum Posts

0

Wiki Points

0

Followers

Reviews: 2

User Lists: 0

@WolfGrey and @rasterror: what about the Shock Rifle you shoot a ball and then you shoot a beam to it, it creates a big explosion, and it can kill a lot of people (but it needs a lot of practice), but I like the Rocket Launcher too. what UT do you guys play? 2000, 2004 or UT3?

Upvote • 
Avatar image for WolfGrey
WolfGrey

3799

Forum Posts

0

Wiki Points

0

Followers

Reviews: 5

User Lists: 0

Fail to you brown lol

Upvote • 
Avatar image for lbrown21494
lbrown21494

25

Forum Posts

0

Wiki Points

0

Followers

Reviews: 0

User Lists: 0

Or they could drop the PS3 completely and skyrocket the price of the PSP Go or drop both and make more ps2 games

Upvote • 
Avatar image for Solid_Azeus
Solid_Azeus

376

Forum Posts

0

Wiki Points

0

Followers

Reviews: 3

User Lists: 0

to act retarded at home in front of the TV with a Wii, 249.99 to deal with money sucking MS and RROD with Xbox360, 199.99 to be proud to own a PS3 and enjoy blu-ray, priceless. PS. i own all 3 systems. i don't care what u think

Upvote • 
Avatar image for WolfGrey
WolfGrey

3799

Forum Posts

0

Wiki Points

0

Followers

Reviews: 5

User Lists: 0

@rasterror Nothing like coating a room with rapid fire bio waste then charging up a full big bio burst shot.That combo can kill as many as 6 at once.Wonderful weapon for small maps.Im quite crafty with it.Other than that im a minigun user.

Upvote • 
Avatar image for rasterror
rasterror

3513

Forum Posts

0

Wiki Points

0

Followers

Reviews: 7

User Lists: 0

WolfGrey Biorifle!?! That is shameful, almost as bad as a flack cannon. I'm the usual rocket launcher user.

Upvote •