Analysts are reporting the PS3, each unit of which has famously sold at a substantial loss since its release, may be approaching the point at which Sony is actually making money on hardware sales.
Industry analysts report the cost of the PS3 Slim’s hardware components have now dropped to $336, though the units sell for $299.
At launch the console was estimated to cost Sony $805, selling for a maximum of $599, and by 2008 the $399 console was thought to be losing $50 per unit.
They explain:
“Since the introduction of the PlayStation 3 in late 2006, Sony has subsidized the price of every console sold, a deficit the company has made up for with game sales and royalties.
However, with each new revision of the game console hardware, Sony has aggressively designed out costs to reach the hardware and manufacturing breakeven point as quickly as possible.
The latest version of the PlayStation 3 manages to further reduce the loss, even with the U.S. price of the console having fallen by $100 during the past year.”
They even hold out the possibility of Sony actually making money on the console with continuing reductions in component cost:
“In light of these factors, the PlayStation 3 probably is already at or near the tipping point for profitability,”
Marketing and distribution costs, as well as the razor thin profit margins enjoyed on base units, are not included in these calculations, although selling hardware at a loss to recoup profits on media sales is far from poor business sense.
In comparison, the rather more basic hardware of the Wii has supposedly been selling at a profit throughout its history, whilst the Xbox 360 has apparently been sold at close to break-even, apparently at the expense of reliability…
Hmm… Kinda hoping they remain stuck making losses so sales price would be forced to go down, but then I might be wrong. Heck, I’m no business bloke.
I might be contradicting myself here – The latest model is a lot different from the very first one mainly due to removal of many features and different (cheaper) hardware components. It might even be safe to say that hence, it got inferior as a side effect of countering production-to-sales losses.
So, for a cheap product, I’ll be getting an equally cheap quality item? Wonder if [url=http://www.sankakucomplex.com/2009/08/18/xbox-360-failure-rate-54/]Xbox360’s somewhat legendary reliability[/url] is a tell-tale sign for [url=http://www.sankakucomplex.com/2009/08/25/ms-on-54-rrod-we-have-a-good-warranty-so-its-ok/]things to come[/url]….
So manufacturing and testing is only $9.81.
If the PS3 was made in the US or Japan instead it would not be $200 but instead a mere $40 at most.
In a first would country there would be less man hours of labor due to use of robotics.
Or manufacture it in Mexico as it would be just $28 more even without robots.
BTW Mexico does make quality products the IBM PS/2s were made in Mexico and those things were tanks.
I’d gladly pay an extra $30 without a complaint to have it not be made in China.
BTW if they did the plastics casting and PCB layout via automation in the US and had them assembled in Mexico they’d actually be even cheaper over all.
Partly because all the parts would be riding trains which use less fuel then any other method of transport.
Bad part they won’t be falling apart for 20 years like Atari 2600s.
It’s about time.
Just to educate everybody…the “point” of the PS3 for Sony was not exactly to produce a fantastic gaming console (to say nothing of the competition, which is also great).
Instead, the purpose was to ensure the victory of Blu-ray. The licenses for CD and DVD have been worth multi-multi-multi-billions over the years. You would have to be really dumb to let go of that revenue stream.
Lol yeah, of course, that’s Sony’s trademark “forward thinking” alright.
They saw the CD was getting replaced by the MP3 format/players, so they go and manufacture the very first (and only, to my knowledge) portable player that doesn’t play .mp3 files. Then they saw high definition contents and thought “physical media!” in a world essentially bursting with digital contents and distribution, something that Microsoft leads and they laughably “follow” with the half-assed, proprietary, publisher-repellent corporative embarrassment they call PSPgo.
But hey, good luck with that! “It only does everything”… lol.
Well thats some good news for sony, I mean it’s about time but like you lot are saying the new ps3 model is seriously stripped out to reach that price. My ps3 is the 60gb version that also plays ps2 and ps1 games i mean they must have made a huge loss on them.