Sony halves PlayStation 3 production costs in one year

By on
Itís no secret that, in the gaming hardware business, companies usually sell their consoles at loss and make back on that through licensing Ė that is except for Nintendo, which has a significant profit margin on each Wii sold. Last year, Sonyís game division lost around $2.1 billion largely because of the price on PS3 components such as Cell processors and Blu-ray drives.

But according to Nikko Citigroup analyst Kota Ezawa, Sonyís efforts to tweak the PS3ís design have allowed the company to drop production costs from $800 to around $400 per unit. While this wonít likely have any impact on gamers in the short term, the drop in production costs could allow Sony to eventually be a lot more aggressive against Nintendo and Microsoft with its price point.

The company still has to make up for a lot of lost ground since the PS3 launch. So, considering they were initially losing between $240 and $310 on every system it sold, it is not out of the realm of possibility that the company could sell a PS3 that cost them $400 to make, at a price point of $300 (or less) sometime in 2008.

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.