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PlayStation 3 hardware closer to break even

The Sony PlayStation 3 hardware is closer to break even, says iSuppli, with parts from a 120GB model dropping to an estimated cost of $336 USD. The console sells for $300 in the US and the equivalent of $438 in the UK, and prices are expected to continue falling into the Q1 2010.

Adds iSuppli analyst Andrew Rassweiler: "In light of these factors, the PlayStation 3 probably is already at or near the tipping point for profitability."



iSuppli had previously suggested that Sony was losing up to $50 per console, despite the unit selling for $100 more than it currently sells for.

"Since the introduction of the PlayStation 3 in late 2006, Sony has subsidized the price of every console sold, a deficit the company has made up for with game sales and royalties," added Rassweiler.

The most expensive component of the system is the Blu-ray drive, which costs an estimated $66 USD. In second is the Nvidia Reality Synthesizer graphics chip at $45.82, and the Cell processor chip is down to $37.73.

Written by: Andre Yoskowitz @ 14 Dec 2009 13:56

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• 17 comments

• samus250

  Finally! How many billions have they lost in those 3 years?

  14.12.2009 14:00 #1

• shaffaaf

  or gained through game royalty fees?

  14.12.2009 16:36 #2

• nintenut

  Weren't they on the cusp of breaking even on the Phat, just before they discontinued it?

  14.12.2009 20:42 #3

• xnonsuchx

  Originally posted by nintenut: Weren't they on the cusp of breaking even on the Phat, just before they discontinued it?Yes...like losing about $40 or so, which means they've knocked another up to $90 or so off the cost w/ the PS3 Slim. Mind you, these #s are still just guesses...they can figure exact costs for SOME components, but some of the more custom pieces only Sony knows the true cost of. They also estimate the PARTS cost, not any labor/etc. involved in assembly/packaging/whatnot. Looks like they really need to cut the RSX costs...if it's roughly the equivalent of an upper GeForce 7000-series GPU, those chips are only about $15-25 or so for PC video cards.

  14.12.2009 20:55 #4

• ZippyDSM

  Originally posted by samus250: Finally! How many billions have they lost in those 3 years?the 360 has lost more even with a profit being made off newer units....
  
  Still the 360 is crap hardware wise and the PS3 could be doing more....but at least its much more open in trems of hardware and data.

  15.12.2009 05:38 #5

• NHS2008

  Let's hope they start making profits real soon. and then re-introduce some of the crucial features they dropped till now...

  15.12.2009 06:10 #6

• bam431

  Someone should make a graph comparing the amount of money sony has loss because of this and the amount microsoft has lost replacing RRoD systems. Don't really have anything in common but just something that i think would be interesting.

  15.12.2009 09:08 #7

• Oner

  Originally posted by xnonsuchx: Mind you, these #s are still just guesses...they can figure exact costs for SOME components, but some of the more custom pieces only Sony knows the true cost of. They also estimate the PARTS cost, not any labor/etc. involved in assembly/packaging/whatnot.Exactly. A third party company making guesses and estimates is just that. Guesses & Estimates.
  
  
  Originally posted by ZippyDSM: Originally posted by samus250: Finally! How many billions have they lost in those 3 years?the 360 has lost more even with a profit being made off newer units....+1
  
  
  Originally posted by NHS2008: Let's hope they start making profits real soon. and then re-introduce some of the crucial features they dropped till now...If you mean PS2 BC then I disagree. I would bet that Sony has detailed numbers/information about how many PS3 owners actually use this feature and made the decision to offer a cheaper console by removing BC so as to pass on the savings to a broader base (or potential one actually).
  
  I love my BC PS3's but I can honestly say I have used it only a handful of times...I really don't need it as my original launch day PS2 still works and I bought my PS3 for next gen HD PS3 Games and experiences. I can also say the same for everyone I know with a PS3.
  
  Now if you meant for something else like Linux capabilities then I wholeheartedly agree. Again 2 of my PS3's have this option and both of them have YDL 6.1 on them (with The Zero Game Project emulator on them of course). Though I really haven't used it much in the last 6-8 months on either of them...only when I feel a bit nostalgic and don't feel like pulling out my original consoles (NES, SNES, Genesis, SegaCD, TG16 etc. etc. etc.)
  
  
  Originally posted by bam431: Someone should make a graph comparing the amount of money sony has loss because of this and the amount microsoft has lost replacing RRoD systems. Don't really have anything in common but just something that i think would be interesting.Last totals I had was that MS were well over 7 Billion in losses when you add the previous gen that they never recouped and the addition of RROD ONLY. Not including the costs of dev'ing for the 360 itself, Disc Scratching, E74, the early launch consoles power supply failures and so on...
  
  Either way ALL companies take losses with the launch of their new gen systems for a while (well except for the Wii since it is nothing more than a slightly better Gamecube) but as technology progresses throughout the lifecycle of said console(s) (90nm -> 65nm -> 45nm & other cost cutting measures etc.) they usually make profits in the end...only to use that for the next up and coming system they have in the works.
  
  My main question has and will always be this though ~
  
  How many 360's are actually in customers hands?
  
  Because when you think about how many RROD's, Disc Scratching and E74 consoles have had to be re-bought PLUS the addition of the mass bannings that MS has done over the years because of "piracy" (so they say, but yet it always seems to happen right before Christmas/End of the year for some odd reason...number padding to make the sales closer?) you have to reasonably assume that even though there are 33-34 or so Million total 360's sold, that sure as hell doesn't mean the 360 really has such a high "lead" over the PS3 as Microsoft would like to have the masses believe.
  

  
  
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  15.12.2009 11:26 #8

• baldfrog

  Originally posted by bam431: Someone should make a graph comparing the amount of money sony has loss because of this and the amount microsoft has lost replacing RRoD systems. Don't really have anything in common but just something that i think would be interesting.I think that sounds like a good idea. I for one would find it interesting. Microsoft have taken the 'cheap and cheerful' approach, but as we all know this has cost them dearly in regards to hardware reliability.
  On the other hand, Sony have always incurred a loss, but the quality of the PS3 speaks for it's self. I don't even know anyone who's PS3 has broke, but I'm on my 3rd 360 in a couple of years!
  Which 'tactic' has cost who the most? And don't forget Joe public, RROD has cost Microsoft both reputation and customers over that little fiasco!

  15.12.2009 11:32 #9

• gnovak1

  Microsoft should start worrying, now that the price of PS3s have gone down. Most people bought 360s because they couldnt afford the PS3. But with the Xbox's RROD and the new E74 error, lots of people will find it hard to rely on the 360 anymore and may sway towards the PS3.

  15.12.2009 13:15 #10

• Oner

  Originally posted by gnovak1: Microsoft should start worrying, now that the price of PS3s have gone down. Most people bought 360s because they couldnt afford the PS3. But with the Xbox's RROD and the new E74 error, lots of people will find it hard to rely on the 360 anymore and may sway towards the PS3.More first party & inhouse devs
  More true exclusives
  More games coming out (since start of 09)
  More higher quality graphics (exclusives & some properly made multiplats)
  More reliable hardware
  More dedicated servers
  More free services
  More of just more....
  
  I know I am going to get $#@! for saying that but it is what it is...the truth. MS has been worried from the get go. THAT is why they rushed and released the 360 a year ahead of the PS3, it was their only chance and it is not looking good! Below is a quote of a post by someone, somewhere else that shows exactly what I am saying ~
  
  Quote:PS3's first year: outsold the 360 worldwide even though "it has no gamez!" as certain gamers claimed...and at a $500-$600 price point.
  
  PS3's second year: outsold/sold the same (depends on what source you cite) as the 360 at double the price; outsold the 360 for the entire year worldwide except in the last 3 months.
  
  First two years of the PS3: 21 million units sold.
  
  First two years of the 360 (with one year of no competition): 14 million sold.
  
  Hmmmm.Put it all together and you see a trend. The same trend Sony has done with the Playstation brand for over 15 years. Successfully. No one can deny that...though they may try.
  

  
  
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  15.12.2009 13:35 #11

• xnonsuchx

  Originally posted by Oner:
  Originally posted by NHS2008: Let's hope they start making profits real soon. and then re-introduce some of the crucial features they dropped till now...If you mean PS2 BC then I disagree. I would bet that Sony has detailed numbers/information about how many PS3 owners actually use this feature and made the decision to offer a cheaper console by removing BC so as to pass on the savings to a broader base (or potential one actually).
  
  I love my BC PS3's but I can honestly say I have used it only a handful of times...I really don't need it as my original launch day PS2 still works and I bought my PS3 for next gen HD PS3 Games and experiences. I can also say the same for everyone I know with a PS3.
  
  Now if you meant for something else like Linux capabilities then I wholeheartedly agree. Again 2 of my PS3's have this option and both of them have YDL 6.1 on them (with The Zero Game Project emulator on them of course). Though I really haven't used it much in the last 6-8 months on either of them...only when I feel a bit nostalgic and don't feel like pulling out my original consoles (NES, SNES, Genesis, SegaCD, TG16 etc. etc. etc.)You haven't updated your YDL to 6.2 yet??? :-)
  
  On the PS2 BC front, yes, Sony supposedly found that less than 15% of people really cared about that feature, so the additional cost simply isn't worth it. As much as whiners/anti-Sony dolts wanna keep complaining about it or blindly accusing Sony of dropping it JUST so they could re-sell 'updated' versions of PS2 games, it simply was not worth it for the few who cared about it.

  16.12.2009 18:28 #12

• ZippyDSM

  Quote:Originally posted by Oner:
  Originally posted by NHS2008: Let's hope they start making profits real soon. and then re-introduce some of the crucial features they dropped till now...If you mean PS2 BC then I disagree. I would bet that Sony has detailed numbers/information about how many PS3 owners actually use this feature and made the decision to offer a cheaper console by removing BC so as to pass on the savings to a broader base (or potential one actually).
  
  I love my BC PS3's but I can honestly say I have used it only a handful of times...I really don't need it as my original launch day PS2 still works and I bought my PS3 for next gen HD PS3 Games and experiences. I can also say the same for everyone I know with a PS3.
  
  Now if you meant for something else like Linux capabilities then I wholeheartedly agree. Again 2 of my PS3's have this option and both of them have YDL 6.1 on them (with The Zero Game Project emulator on them of course). Though I really haven't used it much in the last 6-8 months on either of them...only when I feel a bit nostalgic and don't feel like pulling out my original consoles (NES, SNES, Genesis, SegaCD, TG16 etc. etc. etc.)You haven't updated your YDL to 6.2 yet??? :-)
  
  On the PS2 BC front, yes, Sony supposedly found that less than 15% of people really cared about that feature, so the additional cost simply isn't worth it. As much as whiners/anti-Sony dolts wanna keep complaining about it or blindly accusing Sony of dropping it JUST so they could re-sell 'updated' versions of PS2 games, it simply was not worth it for the few who cared about it.you don't drop a well loved feature that you practically revolutionized the last console for no good reason and sony droped it and dropped it hard.....

  16.12.2009 18:36 #13

• ZippyDSM

  Quote:Originally posted by xnonsuchx: Mind you, these #s are still just guesses...they can figure exact costs for SOME components, but some of the more custom pieces only Sony knows the true cost of. They also estimate the PARTS cost, not any labor/etc. involved in assembly/packaging/whatnot.Exactly. A third party company making guesses and estimates is just that. Guesses & Estimates.
  
  
  Originally posted by ZippyDSM: Originally posted by samus250: Finally! How many billions have they lost in those 3 years?the 360 has lost more even with a profit being made off newer units....+1
  
  
  Originally posted by NHS2008: Let's hope they start making profits real soon. and then re-introduce some of the crucial features they dropped till now...If you mean PS2 BC then I disagree. I would bet that Sony has detailed numbers/information about how many PS3 owners actually use this feature and made the decision to offer a cheaper console by removing BC so as to pass on the savings to a broader base (or potential one actually).
  
  I love my BC PS3's but I can honestly say I have used it only a handful of times...I really don't need it as my original launch day PS2 still works and I bought my PS3 for next gen HD PS3 Games and experiences. I can also say the same for everyone I know with a PS3.
  
  Now if you meant for something else like Linux capabilities then I wholeheartedly agree. Again 2 of my PS3's have this option and both of them have YDL 6.1 on them (with The Zero Game Project emulator on them of course). Though I really haven't used it much in the last 6-8 months on either of them...only when I feel a bit nostalgic and don't feel like pulling out my original consoles (NES, SNES, Genesis, SegaCD, TG16 etc. etc. etc.)
  
  
  Originally posted by bam431: Someone should make a graph comparing the amount of money sony has loss because of this and the amount microsoft has lost replacing RRoD systems. Don't really have anything in common but just something that i think would be interesting.Last totals I had was that MS were well over 7 Billion in losses when you add the previous gen that they never recouped and the addition of RROD ONLY. Not including the costs of dev'ing for the 360 itself, Disc Scratching, E74, the early launch consoles power supply failures and so on...
  
  Either way ALL companies take losses with the launch of their new gen systems for a while (well except for the Wii since it is nothing more than a slightly better Gamecube) but as technology progresses throughout the lifecycle of said console(s) (90nm -> 65nm -> 45nm & other cost cutting measures etc.) they usually make profits in the end...only to use that for the next up and coming system they have in the works.
  
  My main question has and will always be this though ~
  
  How many 360's are actually in customers hands?
  
  Because when you think about how many RROD's, Disc Scratching and E74 consoles have had to be re-bought PLUS the addition of the mass bannings that MS has done over the years because of "piracy" (so they say, but yet it always seems to happen right before Christmas/End of the year for some odd reason...number padding to make the sales closer?) you have to reasonably assume that even though there are 33-34 or so Million total 360's sold, that sure as hell doesn't mean the 360 really has such a high "lead" over the PS3 as Microsoft would like to have the masses believe.The 360 has a small lead but that only leads to FPSs selling better on it most of the time.
  
  Still you can say that 1/3rd of the 360 unit numbers are bad in one way or another but MS has done a great job in makeing it this far I just wish they would drop the closed hardware BS and polish the 360 hardware design a bit I mean I can build a PC for 500$ at its size and twice the spec with no heating issues, EVER,PEROID.....
  
  Sony has a better fpundation world wide even with the stall you seeing it gaining support by the day still I think when its all said and done the PS3 wont be as good as the PS2 and the 360 is all around better than the 360 in trems of dev support and such.
  
  I really say whos better I like the 360 due to the games and the PS3 due to the open nature of the hardware..... but both equally suck for about everything else...

  16.12.2009 18:45 #14

• Oner

  Originally posted by xnonsuchx: You haven't updated your YDL to 6.2 yet??? :-)
  
  On the PS2 BC front, yes, Sony supposedly found that less than 15% of people really cared about that feature, so the additional cost simply isn't worth it. As much as whiners/anti-Sony dolts wanna keep complaining about it or blindly accusing Sony of dropping it JUST so they could re-sell 'updated' versions of PS2 games, it simply was not worth it for the few who cared about it.Wait, was it 6.2 that added the PS3 Vram support? Or was it in 6.1 and they improved it in 6.2? Dammit...I need to login and see which one I actually have as I am sure it is the latest one (which would be 6.2)! See that just shows how long it has been since I have used it!
  

  
  
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  16.12.2009 22:49 #15

• nintenut

  Quote:Quote:Originally posted by Oner:
  Originally posted by NHS2008: Let's hope they start making profits real soon. and then re-introduce some of the crucial features they dropped till now...If you mean PS2 BC then I disagree. I would bet that Sony has detailed numbers/information about how many PS3 owners actually use this feature and made the decision to offer a cheaper console by removing BC so as to pass on the savings to a broader base (or potential one actually).
  
  I love my BC PS3's but I can honestly say I have used it only a handful of times...I really don't need it as my original launch day PS2 still works and I bought my PS3 for next gen HD PS3 Games and experiences. I can also say the same for everyone I know with a PS3.
  
  Now if you meant for something else like Linux capabilities then I wholeheartedly agree. Again 2 of my PS3's have this option and both of them have YDL 6.1 on them (with The Zero Game Project emulator on them of course). Though I really haven't used it much in the last 6-8 months on either of them...only when I feel a bit nostalgic and don't feel like pulling out my original consoles (NES, SNES, Genesis, SegaCD, TG16 etc. etc. etc.)You haven't updated your YDL to 6.2 yet??? :-)
  
  On the PS2 BC front, yes, Sony supposedly found that less than 15% of people really cared about that feature, so the additional cost simply isn't worth it. As much as whiners/anti-Sony dolts wanna keep complaining about it or blindly accusing Sony of dropping it JUST so they could re-sell 'updated' versions of PS2 games, it simply was not worth it for the few who cared about it.you don't drop a well loved feature that you practically revolutionized the last console for no good reason and sony droped it and dropped it hard.....
  Absolutely, this.
  
  So, only "Anti-Sony dolts" worry about being able to play Sony games on a Sony console? That makes sense...

  17.12.2009 06:43 #16

• danjaman

  The guys who hack consoles to get Linux on them (inevitably leading to piracy along the later road, once the info gets to the crooks), say the only reason there is no hacked PS3 (may be now...) is because they let the hardware open to Linux users who had no interest in using their skills to aid piracy... now they have removed its support, all you 'we love Sony' hypocrites will get your pirated games as the mod community gets medieval on that thing... lol
  
  What a bunch of idiots. I still want a PS3 though haha... would prefer one with Linux too.

  18.12.2009 10:57 #17