Is Sony eating hundreds of dollars on each PS3?
The cost of manufacturing and materials for the low-end, 20-gigabyte version of the console comes to $805.85, iSuppli said in a report Thursday. That means that for every PS3 Sony sells for $499, it will lose $306.85 on components alone. Marketing and advertising costs would then boost the actual cost to Sony higher. The PS3 with the 60GB hard drive comes with a manufacturing and component bill of $840.35. Since it sells that version of $599, the component bill exceeds the retail price by $241.35, iSuppli said.
The higher costs for the PS3 are largely driven by the expenses associated with the Blu-ray Disc drives and the custom chips used inside the machine. The Blu-ray drive costs $125, while the Cell microprocessor likely costs about $89. The reality synthesizer, a graphics chip from Toshiba designed for the PS3, comes to $129. “The reason why the PlayStation 3 is so costly to produce is because it has incredible processing power,” iSuppli analyst Andrew Rassweiler said in a statement. “If someone had shown me the PS3 motherboard from afar without telling me what it was, I would have assumed it was for a network switch or an enterprise server.”
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