Report: PS3 Hardware Almost Break-Even Options

[PS3Scene]

Report: PS3 Hardware Almost Break-Even Posted by XanTium | 26-12-2008 23:29 EST

From edge-online.com: [QUOTE] When Sony's PS3 launched two years ago, even with its relatively high price tag, the company lost a significant amount of money on each console sold. But a new BusinessWeek report featuring an iSuppli teardown of the PS3 finds that the total cost of components for the console is now $448.73 versus the $399 retail price tag. Sony has reduced the total number of PS3 parts from 4,048 to 2,820, the report said. iSuppli estimated the cost of the PS3's Cell processor to be $46 currently, down from $89 at launch. The console's Nvidia GPU is now $58, down from $129 initially. [/QUOTE] Full Story: edge-online.com

[Elemino]

Wow, the biggest cost of the system, the blue laser, and no mention of it's price. One day it will be cheap... and of course the talk will be the new Xbox and the PS4.

[Chancer]

They need manufacturing costs to drop fast, because the machine needs a price cut in the new year.

Wow, the biggest cost of the system, the blue laser,

This was already subject to a reduction last year when it was physically changed. Where did it say the cost of it in the article? I know how much I can buy them at and would like to see the differential.

Note
spinr34 your post is gone. This thread is not about the BR features of the next Xbox. If you want to contribute to that debate then 360 general would be the place.

This post has been edited by Chancer: Dec 27 2008, 02:31 PM

[Elemino]

This was already subject to a reduction last year when it was physically changed. Where did it say the cost of it in the article? I know how much I can buy them at and would like to see the differential.

They didn't mention it in this article, but it was Sony's original argument. Blu-ray players and the PS3 have such a high expense because the blue laser needed in player is so hard to make. I don't remember the sources where I read that. I would assume a few places on the Internet and The Dallas Morning News, since that's where I get most of my info. They claimed that's why blu-ray players cost so much more than HD-DVD (and why it has higher data capacity). The article went into the fact that the standard squeezes the data so close together the laser had to read at a different angle than standard DVD, which is also why originally it wasn't going to be backward compatible.

There is one good thing that came out of this though. The data on a Blu-ray disc must be much closer to the surface of the disc than DVD or HD-DVD. So close that minor scratches can cause problems. To combat this they reformulated the plastic used in Blu-ray discs, and the first scratch resistant media was born. So technically blu-rays should withstand wear and tear better.

But if the lasers are cheap now, what else is keeping the cost of the system so high? Is it their Cell Technology backfiring on their plans? Do you think if they would have kept with the original Playstation architecture the system would be cheaper now?

[spinr34]

Note
spinr34 your post is gone. This thread is not about the BR features of the next Xbox. If you want to contribute to that debate then 360 general would be the place.

this thread is about the assembly of consoles, in particular the ps3. i was replying to elemino's line of "the new xbox and ps4". we all know that eventually sony will make a profit off of the ps3. they have cost reduced far more efficiently and quicker than ms has with the 360. anyways, in reply to the following:

But if the lasers are cheap now, what else is keeping the cost of the system so high? Is it their Cell Technology backfiring on their plans? Do you think if they would have kept with the original Playstation architecture the system would be cheaper now?

think of it like this. if you are making a product and have been losing money. then all of a sudden the parts become cheaper, do you immediately change the price of your product? more than likely you wouldn't. the product would stay at the current price because of the following:
1) you still have units out there that have the more expensive parts in it and don't want to lose any more money
2) if/when units that have the new cheaper parts start shipping you want to make the most money while you can so you leave it at its current price to recoup some of your losses from when it was more expensive to manufacture.

you can also apply this to buying gas. if crude oil drops in price, effectively making gasoline cheaper to produce, you do not see the effects of it at the pump until weeks after. this is because all of the gas that is currently in circulation was purchased at a higher price point. it isn't until they purchase it cheaper that they lower the price.

(the gas example is a little bit more realtime than a console but the principle of it taking time to change price is the same)

[Elemino]

Yea, but nothing drops in price like electronics. For example, computer storage. At the beginning of this year a 750GB hard drive dropped to a price of about $200. Now you can get a 1.5TB for $120~$150. 64GB Flash drives were over $1000!!! WAY OVER. Now you can buy one for less than $200. In the electronics industry, staying competitive doesn't mean making up for yesterday because everyone else is on tomorrow.

we all know that eventually sony will make a profit off of the ps3. they have cost reduced far more efficiently and quicker than ms has with the 360.

How so? Keep in mind, MS never had an ultra expensive blue laser adding to cost. The system is still somewhat a computer, not a reinvention of a computer like Sony decided to go for. But I still want to know, do you two think the PS3 would still be as expensive to make if they had simply used a faster version of the PS2 going to the PS3 as they did going from the PS1 to the PS2?

This post has been edited by Elemino: Dec 28 2008, 08:02 AM

[Chancer]

I think the machine would definitely have been cheaper with no BR included. Also leaving out the WIFI as well.
If the PS3 had not had all the extra stuff and the BR included, I would probably have not purchased the console as I already had 2 360s so it would have been pointless buying at launch, what would have been simply another games machine with no games.
The problem is with Sony's crap marketing, nobody knows what they are really aiming at.
One thing certain the high cost prevented sales but a cheaper machine with no BR may have sold less. At launch as games machine only it would have been sadly lacking.

Running at under £30 for the cost of the laser assy wholesale. I couldn't say if this was the single most expensive component in the PS3

[spinr34]

i think without bluray, wifi and a hard drive, it'd be a lot cheaper. but, sony always aimed high with the ps3. when they originally announed the ps3, it was going to have dual hdmi and 4 gigabit ethernet ports too. even the 1 ethernet port they have in the ps3 now is gigabit. i don't think the ps3 needs it and if they were to silently put a 10/100 in there i doubt anyone would miss the gigabit port.

[Elemino]

i think without bluray, wifi and a hard drive, it'd be a lot cheaper. but, sony always aimed high with the ps3. when they originally announed the ps3, it was going to have dual hdmi and 4 gigabit ethernet ports too. even the 1 ethernet port they have in the ps3 now is gigabit. i don't think the ps3 needs it and if they were to silently put a 10/100 in there i doubt anyone would miss the gigabit port.

What would be the point of dual HDMI? I suppose the 4 ports meant a built in switch? You're right, you wouldn't notice if it had a slower port, because the system definately does not make use of the extra speed. In fact, I haven't noticed any difference from when it was wired 1 gigabit in my old place to the wireless I'm using now. Not in downloads, media playback, or even the system getting the list of files from my computer.

Running at under £30 for the cost of the laser assy wholesale. I couldn't say if this was the single most expensive component in the PS3

I'm not exactly sure what that translates into USD, but I'm sure it wasn't that cheap when the system released. You're right about the sales, I definately would not own a PS3 if it didn't have blu-ray. At the same time, they could have gotten the jump on MS if they weren't waiting for the bluray aspect to be ready... assuming the cell architecture was ready.

This post has been edited by Elemino: Dec 29 2008, 03:35 PM

[Ronu]

The reason why the cost of the PS3 is still high is because of the losses sony took from the research and development of the cell technology. This article explains it all @ PS3 Fanboy