Sony losing $36 per PS3 - Report
iSuppli analysis of redesigned console's innards concludes electronics giant spends $336 making every $299 Slim, the system's lowest loss per unit to date.
Shortly after the PlayStation 3 launched in November of 2006, iSuppli broke the onyx behemoth down to its various components. The hardware research firm determined that it cost Sony more than $840 to produce a single 60GB version of the system, each of which then sold for $599.
After revealing a massive 70 percent reduction in manufacturing costs for the console, Sony debuted the PS3 Slim in September at a trimmed down $299 price point. Now iSuppli has weighed in with its assessment of the new hardware, determining that each Slim is still losing money for Sony, but not nearly as much as its predecessors.
According to iSuppli, the hardware and manufacturing costs for the 120GB PS3 Slim add up to just over $336, making for a loss of more than $36 for each unit sold. Given that iSuppli's analysis doesn't include other expenses, like software and transportation, the actual loss on each PS3 Slim sold in the US is even greater. However, iSuppli noted that the PS3 is more expensive in a number of other countries, and the cost of materials will only fall in the next year.
"In light of these factors, the PlayStation 3 probably is already at or near the tipping point for profitability," iSuppli director and principal analyst Andrew Rassweiler said in a statement.
As for specific improvements under the Slim's hood, iSuppli underscored the benefits of Sony's 65-nanometer and 45-nanometer semiconductor chips. Not only are the chips cheaper than their counterparts in the original PS3, but they also require less power (and thus created less heat) to achieve the same results. That allowed Sony to get by with less expensive cooling solutions and a cheaper 220-watt power supply. The older PS3 models had a 400-watt power supply.