PS3 Manufacturing Costs Reduced By 70%

During a conference call for overseas investors following Sony's Q1 09 financials, Nobuyuki Oneda Sony Corp's CEO and Executive Vice President has revealed that manufacturing costs of the PlayStation3 have dropped by 70%.

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saint_john_paul_ii4990d ago

$240 per unit?

I want to see it to believe it. that means if they cut the price by $100, they will profit on each PS3 by about $60. which is really good.

qface644990d ago (Edited 4990d ago )

i doubt they are or will make anything close to 60$ per ps3 that is actually ALLOT way too much actually

heroicjanitor4990d ago (Edited 4990d ago )

Maybe they cost $1000 to make at launch? That would leave it at $300 which still seems too high.

Edit: I mean it still seems too low =P

Ah I forgot about the retailers I am usually the one to point that out damn... So it makes sense now thanks:)

Panthers4990d ago

Sony doesnt get $400 for each PS3 sold right? I mean the stores make money too dont they?

saint_john_paul_ii4990d ago

so $300 still seems to high for you eh? sounds pretty low to me especially when you put inflation into the equation.

PshycoNinja4990d ago

When the PS3 first lauched Sony said it cost $850 per console to make. So if my math is correct ( and it ussually is ) and if Sony is correct about the percentage then it costs $255 dollars to produce each console. Which means they are more then breaking even. But I think there was a mistake on what somebody weither it was the Sony exceutive or the website someone is wrong. I believe ( I think ) the PS3 costs $375 to produce now.

WengYong4990d ago

This could be the slim. It will be interesting if it was.

JL4990d ago

I've been saying this for a while now. Something like January of 2008 it came out that Sony had cut production costs down to like $400-450 per console. That was in roughly a year since release. Now a year and a half from that point, you don't think they cut anymore off? They cut like $400 off in just a year (granted that was a bit easier to do with nixing some things in the system, but still), I'd expect at least $100 more would've been able to be cut off by now. Especially in light of the 45nm production. I think they've quite possibly been making a profit for a lil while now. Seems they would've definitely been breaking even at least. That $255 cost per console, while being a bit lower than I'd have thought, doesn't sound ENTIRELY unreasonable. That might not be the right number, but I'd almost say that they could afford that $100 price cut everybody talks about and still be breaking even, or at least really close to it. I mean come on, we're almost 3 years into the life cycle, and at roughly the year mark they already cut $400 on that thing. Stands to reason that they've cut at least $100 more off in this past two years (year and a half).

RememberThe3574990d ago

Oneda never said anything about it being the current market PS3.

After hearing this, I'd put money on a $300 Slim PS3. Not a lot, but I'm definitely exacting it now.

umair_s514990d ago

If this is true, I should sell my PS3 now and pick up the cheaper model to extend my warranty and make a small profit!

pixelsword4990d ago

with all of the ports, backwards compatibility and the trimmings, it should fetch a pretty penny on the market in the near future.

IdleLeeSiuLung4990d ago

I gather that manufacturing means just producing it, not including s&h to retailers, retailer cut, packaging & other misc. However, this is good news though and there is a price cut at the end of the tunnel.

LoVeRSaMa4990d ago

And then there was Profit.

PixlSheX4990d ago

"PS3 cost reduction "progressed according to plan""
And then.. "PS3 Manufacturing Costs Reduced By 70%"
Then i remember something about sony planning 13m units sold this year.

I'm pretty sure a pricecut/PS3 Slim is coming this year. It makes sense.

4990d ago
KampferZeon4990d ago (Edited 4990d ago )

The website did all that fancy calculations to justify its logic but totally fails to appreciate there is a difference in the exchange rate between now and 3 years ago

It was 123 3 years ago, it dive to as low as 88 in Jan 09. Now is only 94

The exchange rate totally kills any incentive for Sony to cut the PS3 price.

Syronicus4990d ago

With the cost of the PS3 dropping and a sharp incline in Sony stock prices, you can bet that a PS3 slim is just around the corner. I know they shy away from insider trading but the signs are there and might as well be insider info. The signs are there folks, if you don't already, you might want to pick up a few shares of Sony stock. Once the PS3 slim hits, it will climb quite a few notches and you could easily make a profit.

ultimolu4990d ago

So guys...the PS3 is still doomed right? :)

This is excellent news for Sony. They bring out a slim and I may trade in my fat one.

gaffyh4990d ago

The Slim has to be coming for this to be true, I seriously doubt they'd be able to get the cost down by 70% on the current PS3 model.

Ju4990d ago

Well, 70% cost reduction implies a reworked model - including the case. If its not slim, it'll still be a new version, no doubt about that.

Real Gambler4990d ago

Manufacturing cost: $240
Storage, shipping, etc: $20
Sony making a profit: $45
Retailer making a profit: $45

End result: $350 on the shelves. Good news is Sony would be making money out of each PS3 sold, so possibly more money sent back to make games.

Dannagar4990d ago (Edited 4990d ago )

Recently, I saw Wal-Mart selling Blu-Ray Players for $98. That was the most expensive piece of the PS3. I wouldn't be surprised if PS3 dropped to $299 this Christmas Season.

What would Microsoft do? If Sony dropped PS3 to $299. Microsoft would drop the Xbox 360 Pro to $249 and the Arcade to $179. A win, win for consumers.

And Nintendo? I think a price drop for the Wii is in order. We are going to see Wii at $199 this Christmas.

1ikedamaster4990d ago

This 70% reduction is from launch, everyone knows that.

saint_john_paul_ii4990d ago

"We could see a 250$ ps3"

No, thats too unrealistic. they need to make some profit on the system even if we want such a price cut.

Lifendz4990d ago

Sony's making a killing on the console at 399.99 if this is true. Guess a price drop might happen after all.

njr4990d ago

I think they're gonna stick with sequential $100 price drops.

GameGambits4990d ago

I'll be the first to say I don't care. Sony is set even if the PS3 had failed or somehow does end up failing the rest of its life cycle(it hasn't and it won't) that they could still push out a Playstation 4 when the time comes.

You freakin goobers need to stop obsessing over sales.

Anyone on N4G actually play a good game lately? Yeah I didn't think so, because 80% of you just want to talk shiny #'s talk. Get a math major and get out of here already.

Just once I'd like to see an article on here that isn't BS rumor speculation, some sort of sales charts/numbers, doomed articles, comparisons on multiplatform games that are the same dam thing, and just other pointless crap like the 10 best games that I played while I took a big dump.

How about someone in this game journalist field who reads this actually lands an interview with some game developers and ask some good questions like:
1) The importance of dedicated servers in the future of online games.
2) Where'd the plethora of RPGs go this generation?(I own all consoles now including DS and PSP... and it's still barren)
3) How game developers are letting games not worth 60 bucks sell for that price?
4) Ask Sony,Microsoft,Nintendo online reps if there is any time in the near future maybe a company will be formed that they pay them money to baby sit the online communities of games. There's things so foul, so racist, so inbred going on online in games that it's at the point where banning the 13 year old with a foul mouth isn't cutting it. What's worse is there are plenty of 18+ year olds that are in need of some serious punishment like a real life fine after a warning to stop being a racist or worse moron online who yells.(Muting doesn't stop the person from spreading idiocy...but a 50 dollar fine does...Freedom of speech doesn't exist either before you throw that in. You are dumb if you believe it ever did.)

5) Finally ask the correct developers/producers when we can see or what they plan on with these game series for fans:
1) Capcom-Breath of Fire and Megaman
2) SquareEnix-FFversus13 and Chrono
3) Atlus-Shin Megami Tensei
4) Sony-Legend of Dragoon 2 ?
5) Konami-Suikoden 6 ?

The list could go on and on. Frankly I should make it my goal when I visit this site to just reply how I have here. I want G A M E N E W S....this isn't an article about it and I'm finally fed up with how much of this site isn't game news. It's like a much dumber version of Kotaku now it's sad...

cmrbe4990d ago

you have a good point but those stuff are also posted here. You just have to look for it.

The main reason why i like N4G is because you get the good the bad and the ugly just like the internet which is what i like. I always advocate for open systems. These articles do matter alot to the industry. Financial performance, sales performance all matter to gaming.

Imagine talking about games only and then suddenly find out that all PS3 exclusives were canceled because SCEI closed shop due to poor financial performance. Its good to know and its good to debate.

Besides, if we don't talk about sales performance then the x360 fans won't have anything to talk about lol! jk.

IzKyD13314989d ago

I really doubt the PS3 costs 200-300 at this point, with Blu Ray, 80-160GB HDD as standard, all the hardware is more likely breaking even for Sony right now

40cal4989d ago

The competition should be very worried.

MNicholas4989d ago

A $300 PS3 would be a steal given the built-in Blu-Ray, wifi, Bluetooth, HDMI, and hard-drive. If the lower cost model remains as reliable as the first and retain all the same features then Sony can still claim to be the master of hardware manufacturing.

indysurfn4989d ago

Yeah it is obvious that the slim has had too much smoke for it to be just a rumor (even though that saying: "where there is smoke, there is fire" is not a true statement per say, even though it is a high percentage).

Yeah selling your Console NOW while saving your money for the new system and year end games is a good idea, this is the SLOW part of the year anyway. Especially with the rumor that there will be a huge pack in package this year.

I've been slapping Sony about this for awhile now, DROP THE PRICE FOOL! What if Microsoft had of gotten smart, and dropped their price even more while Sony couldn't respond? They would have had a installed base lead so big, that developers would swarmed to it like flies on a open water melon (had to clean it up). I know people will say they already did, but I mean on the level of PS1, and PS2 not a 30% ratio a 85% ratio. Now in a price war Sony is in control because they have more people that don't have the system then Microsoft does.

Microsoft has flinched, now this is a critical moment for Sony. A token $50 price drop will be such a heart break! And a eye opener for Microsoft, but a $100 drop will make all the difference, a $150 price drop would be laying down the gauntlet!

Just drop the price at least $100, and keep the increased disk size, get the system in peoples hands! And improve your third party development tools, you fart knockers! It is not a new system anymore.

+ Show (28) more repliesLast reply 4989d ago
Nitrowolf24990d ago

pricecut= second ps3 for me

NewZealander4990d ago

price cut and slim model then sony will start selling alot better, hope the rumors of a slim model coming soon are true.

dawgsfan1174990d ago

Why buy another PS3. Are you so lazy that you cant simply pick up your current one and move it to another location. Might as well go flush 300 dollars down the toilet.

PixlSheX4990d ago (Edited 4990d ago )

Moving the ps3 to another location is a pain in the as*. I have it on my bedroom, but i just have an SDTV. So when i want to play it in the 43" TV fullhd, i have to disconnect everything, take it downstairs, go up again for the hdmi cable, install everything again and then, finally, i can play.

A PS3 Slim would be the perfect solution to my problem. Edit: Or a 32" fullhd tv for my bedroom, but it's too expensive.

Ju4990d ago (Edited 4990d ago )

^^ Moving is not an issue, just buy a second set of cables (only power and video, costs you nothing). I am always amazed how few connections you need if you have that.

But anyway. Would you move your DVD player to another location if you'd have 2 TVs ? Didn't think so. Its not that big of a deal to have a second one.

PixlSheX4990d ago

My point is that, if i had another full hd tv for my bedroom, i wouldn't move it because all i want is play my ps3 on 1080p. But i get your point.
Anyways, another set of cables is a great alternative, i'll try that. bubbles for the advice!

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lloyd_wonder4990d ago (Edited 4990d ago )

I'm assuming Sony is using cheaper blu-ray diodes and the new 45nm Cell. 70% blows my mind. If Sony wanted to bundle their new motion controls and the PlayStation Eye they probably could. And IBM are working on 32nm CPUs for next year?

The_Beast4990d ago

nope nope nope.. sony is ganna go bankrupt and ps will die, i just gotta keep believing

El Botto4990d ago

My friends, the PS3 is going to dominate soon enough. Sony has managed a 540 cost reduction. The PS3 is expensive no more.

A pricedrop to 300 or a PS3 slim seems very likely at this point in time.

Im thinking they might even make several bundles. We all know Uncharted 2 and Ratchet bundles are coming. We all know MAG and GoW3 bundles are coming.

Im fully expecting a FF13 bundle for the price of 320 bucks! PS3 will soon sell like hot cakes.

Sir Ken_Kutaragi4990d ago

So that means - PS3 Price cut(Maybe $299?/£199?) before xMas would =

"xBox 360 Sales Reduced By 70%" ;-D

ultimolu4990d ago

It blows *my* mind that the jackasses, namely 360 fanatics were saying that the PS3 was dead.

How do you like them apples ya morons?

kagon014990d ago

the price at the same time of releasing of GoWIII, so they can do an ULTRA COMBO FINISH!!!

Marcelles254990d ago

you guys forget that sony cant bundle first party games with their system when they are new releases because sony wouldn't make money off the game they would be giving it away unless this is true and they were making a profit of 50 every time they sold the console then they could bundle t and make no money off each bundle sold...

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jack_burt0n4990d ago

sony stated last year the ps3 was breaking even by Oct, which is quicker than they did with the ps2 in its lifecycle problem is there has been so many bogus articles about losses with playstation which are more to do with decline in other sectors, good thing is they dont have a 1billion dollar repair bill lol