Sony's PlayStation 3 has finally been released, but is selling well below manufacturing costs, according to findings released by an electronics industry research firm.
Research by iSuppli found that the materials and manufacturing cost of the PlayStation 3 is $805.85 for the 20Gbyte Hard Disk Drive (HDD) version and $840.35 for the 60Gbyte (HDD) version. The two versions are being sold for $499 and $599, respectively. Sony takes a loss of $306.85 for the 20Gbyte version and $241.35 for the 60Gbyte version. This total does not include additional costs for the controller, cables and packaging. “With the PlayStation 3, you are getting the performance of a supercomputer at the price of an entry-level PC,” said Andrew Rassweiler, the teardown services manager and senior analyst for iSuppli.In comparison, PlayStation’s rival, Xbox 360, has a materials and manufacturing cost of $323.30 and a suggested retail price of $399, according to analysts at iSuppli.
While most video game console makers take a loss on hardware only to make up for it with game title sales, Sony’s loss is substantial, iSuppli said, in part because Sony’s design is so advanced.
“To give an example of how cutting-edge the design is, in the entire history of the iSuppli Teardown Analysis team, we have seen only three semiconductors with 1,200 or more pins. The PlayStation 3 has three such semiconductors all by itself.” said Rassweiler.
The use of four Samsung 512Mbit DRAMs and IBM's Cell processor each account for 22 percent total of the PlayStation's cost.
