Sony: PlayStation 3 manufacturing costs down 70%

By on July 31, 2009, 3:11 PM
During a recent investor conference call, Sony corporate CEO Nobuyuki Oneda revealed that the PlayStation 3 console is now roughly 70% cheaper to make than it was at launch. Although he wouldn’t give an exact figure, estimates put manufacturing costs at around $240 – down from around $800.

If accurate, it would mean Sony is making money on each new PS3 sold at the current going rate of $400 – probably even when factoring in costs associated with marketing, licensing and other fees. Earlier rumors also suggest that the company might be getting ready to finally drop the price of hardware and launch a slimmed-down version of its console in the fall. Whether they actually pull the trigger remains to be seen, but it seems like the smart move to boost sales after a dire quarter.




User Comments: 25

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TomSEA TomSEA, TechSpot Chancellor, said:

Seems to me that's pretty stupid of Sony to acknowledge that. Basically they're saying, "we're really having a good time sticking it to the people dumb enough to pay $400 for our unit."

Guest said:

That is what companies do you know... make PROFIT :D

Guest said:

Tell that to M$oft and the xbox360, they breaks from the rollout yet people are stupid enough to keep buying more than 2 systems.

Tekkaraiden Tekkaraiden said:

So they shouldn't make a profit on something they manufacture?

gobbybobby said:

they should keep the price the same IMO. These rumors of a price drop have been going on 4 years, making people hold back, and back on there PS3 purchase.

TomSEA TomSEA, TechSpot Chancellor, said:

I don't begrudge anyone making a profit by any stretch. It's the whole, "our manufacturing costs have decreased by 70%, but we're not going to bother cutting our loyal customers any slack on the price."

9Nails, TechSpot Paladin, said:

So, now that they're making profit on systems, will they lower the license fees so that our games can be cheaper? Hmm, I doubt it. I thought the console idea was that the game system is sold at a loss and the game titles were where the company profits.

Tekkaraiden Tekkaraiden said:

Wouldn't their loyal customers already own a PS3? They'd do more for their customers to offer a decent game, hdmi cable or blu-ray remote with each system.

Twister123 Twister123 said:

Its still a great console , but a decent price reduction might help sales , there lagging behind there competitors , or throw in a second pad a headset etc...

yukka, TechSpot Paladin, said:

If you have more consoles on the street, you sell more games and companies see more value in spending any extra licence fees to make games as they see a better return. There has to be a point where Sony stop getting hard-on for having the claim of selling the most expensive console on the market and get back to business.

windmill007 said:

Lets see they were losing $400 per console...now there making $160. I think they have awhile to recover there loss. Suck it up. The PS3 is an awesome media server for a HDTV and they throw in a blu-ray to boot. Not a bad deal IMO for what it can do.

Wendig0 Wendig0, TechSpot Paladin, said:

windmill007 said:

Lets see they were losing $400 per console...now there making $160. I think they have awhile to recover there loss. Suck it up. The PS3 is an awesome media server for a HDTV and they throw in a blu-ray to boot. Not a bad deal IMO for what it can do.

Agreed. I never complained about the price much after comparing the 360 to the PS3. If you get a 360, you still need to buy several accessories to bring it up to par with all the features of the PS3, making the price comparable to the PS3. After owning both systems, the PS3 is the clear winner in my book. (I shot my 360 after the 3rd RROD and sent it back to Redmond in the prepaid "Coffin". http://www.techspot.com/vb/topic128992.html)

BlindObject said:

Slimmed Ps3? Oh shhhhhiiiiiiiiiiiiii

I wanna see this.

tengeta tengeta said:

Suck it up? What a joke, Microsoft had to take the brunt of it, and so did Nintendo. The only difference here is that its your precious Sony at risk.

Twister123 Twister123 said:

Suck it up? What a joke, Microsoft had to take the brunt of it, and so did Nintendo. The only difference here is that its your precious Sony at risk.

what r u talking about ?

Wendig0 Wendig0, TechSpot Paladin, said:

tengeta said:

Suck it up? What a joke, Microsoft had to take the brunt of it, and so did Nintendo. The only difference here is that its your precious Sony at risk.

I must not be on the same page as you. What does Microsoft and Nintendo have to do with a 70% drop in manufacturing cost for Sony?

tengeta tengeta said:

They both dropped their consoles prices slightly with the drop in production cost, the guy said its fine for Sony to keep charging this because of initial losses. The Xbox 360 was losing money per console made for the first two years, so why did Sony expect anything different?

Wendig0 Wendig0, TechSpot Paladin, said:

tengeta said:

The Xbox 360 was losing money per console made for the first two years, so why did Sony expect anything different?

Simple. The PS3 is better quality. That might get me labeled as a "fanboy", and that's ok. The simple truth is that there are many more RROD's (and E74 errors) than YLOD's. To be fair, the 360 is the better selling console, yet they have also had many more returns.

I have had 2 PS3's (the first one was stolen within a month of buying it) and 3 360's (all of which broke). Sony FTW. Piss on Microsoft.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

TomSEA said:

Seems to me that's pretty stupid of Sony to acknowledge that. Basically they're saying, "we're really having a good time sticking it to the people dumb enough to pay $400 for our unit."

It's funny how this is the typical response to stories like this... Completely ignore the part where the units were $800+ when they were first being built, and were being sold at a loss for YEARS, rather than charging what they really cost, let alone having any profit margin. Now Sony can finally recoup some of the hardware costs through real hardware profit, not just licensing fees, and the first thing people do is scream for them to lower their prices... Amazing how people are never satisfied.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

windmill007 said:

Lets see they were losing $400 per console...now there making $160. I think they have awhile to recover there loss. Suck it up. The PS3 is an awesome media server for a HDTV and they throw in a blu-ray to boot. Not a bad deal IMO for what it can do.

Yep, and those "sell it cheaper!" squealers don't take any of that into consideration. Any value-added items, like media server software or other utilities that are non-licensed items included (or available for the system), those are basically given to the end user gratis. Seems like, if they are making a little bottom-line on the platform itself, they may have some extra $$ to drop into improving the media center side of the product, making it that much more attractive.

TorturedChaos, TechSpot Chancellor, said:

I'm glad to see Sony is making money on its product, and hope after they have made back some of their losses they will drop the price.

As for me, I'm still shopping the pawn shops

Twister123 Twister123 said:

I don't know why people complain about $400 for a ps3 , look at what you get , its a music , video , photo player with storage from 40 to 180 gigs , it plays nex gen games a blue ray player is thrown in , divx was added a while ago , christ , u want a waffle maker too and coffee cup holders , all for $400 , thats a bargain !

DALITTLEGUY98 said:

sweet finally the ps3s are much more affordable now every1 can get them and prove they are more important and better than a xbox

Guest said:

Where are you from?

In the UK our consoles come with those things!

Guest said:

hi i am doing my coursework for my GCSE and i was just wondering what everyone thinks about the cost of the manufacturing and the profit that they make, also do you think that a £50.00 game is worth paying for or do you think that you are being conned out of money, thanks very much. Please comment

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