PS3 manufacturing costs almost halved

via Computer and Video Games


PS3 was noted for being a particularly expensive console to make on its release year of 2006, but the cost of making them has almost halved, according to electronics research company iSuppli.

The original launch day versions of PS3 were said to cost Sony around $840 per unit to make. Sony was selling them for $599 in the US (£425 over here).

Since then, PS3s have lost PS2 game support, a couple of USB and memory card ports, and gained bigger hard drives, that the revisions seem to have paid off.

According to iSuppli (via Business Week), who did a recent tear-down of the latest PS3s available, those costs are now down to around $440 per unit, which Sony sells on for $399 (or £299).

If the figures are accurate, that would put Sony's losses per console down from around $240 to just $40 per unit.

"Sony is one step ahead of us and probably has plans to re-spin the hardware to reduce the costs yet again," said iSuppli analyst Andrew Rassweiler, who reckons Sony could reach the break-even point in 2009.

Despite expectations, Sony has insisted it has "no plans" for a price reduction on PS3 in March next year, in which the company expects to sell 10 million consoles.

While I understand Sony's position (they can't simply sell the console at a huge loss forever). Cutting the price in half, even if for only a short time, would make them "no worse off" than launch time.

In fact, now might be the time to "bring back" the 600 dollar console to recoup losses from the "cheaper, 200 dollar" model.

Sure it wouldn't balance out during these economic times, but many major retailers are damn near GIVING things away this year to simply make ends meet. Getting even 1 dollar and selling 1000 units is better than selling 0 units at 40 dollars.

Sure Sony has more than enough ability to do this, even if its just for the holidays.

But what good is it now. Its far too late to do any such thing now.

Sadly, I am beginning to think that Sony's "we're green" attitude hasn't helped them any. Many people don't realize that being green is AWFULLY expensive. In fact, its so expensive, that the government damn near has to pay people to do it.

Ever hear of "green energy credits"? The government essentially pays you to foot the initial cost of installing a 50,000+ dollars solar panel on your roof.

Mind you, that's the price for 1 moderately sized home. Can you imagine if Sony converted 1 of its manufacturing plants to use solar energy. That cost would no doubt be in 10s of millions, if not more.

Lead-free solder, recycling programs, reducing the use of PVCs, etc. All these things come at a greater price tag, not to mention, retraining factory workers to work with the new materials (lead-free solder is in fact, harder to work with, as well as being more an immediate danger to one's health than leaded solder; which also means rising medical costs)

My point is, yeah Sony trumps all the console manufacturer's at being green (the worst was in fact Nintendo, which I thought I was rather interesting, but makes sense; can't sell a console for 250 dollars and make it in any environmentally friendly fashion), but if this means paying out the ass for a PSP or PS3, then no thanks.

I am willing to bet if Sony dropped even half of their green practices the PS3 would have been no more than 350 dollars from the get go...