PS3 production costs cut by half

by Jem Alexander { Jan 11th 2008 at 4:00PM }

Due to the removal of various components from the PS3's innards, coupled with smaller chip size, Sony has been able to cut the production cost of the PS3 by half since last year. Each console can now be produced at $400 a unit, rather than the $800 it was costing for each PS3 around November 2006. It's not clear whether this is the case for both the 40GB and the 80GB models, but it seems fair to assume that the 40GB is now selling at cost.

What does this mean for consumers? More wiggle room with regards to pricing. We wouldn't at all be surprised to see a drop in price sometime this year. Don't expect it to come soon though. Sony are still riding a bit of a wave with regards to PS3 sales and with a number of high profile games coming out in the next few months, that can only improve.

Tags: costs, PS3

Reader Comments (Page 1 of 1)

BigRedDog @ Jan 11th 2008 4:19PM

Sony would still be heavily subsidizing the hardware cost at this price.

Keep in mind that retailer profit margins still need to be calculated into the equation.

Brendan Brown @ Jan 12th 2008 2:06PM

I can't speak for later in the lifecycle, but generally in the early days the store profit margin on a console is a couple pennies. Why do you think retailers spend so much time during launch day events to get you to buy accessories, games, blu-ray movies, and extended warranties.

eclipse27 @ Jan 11th 2008 4:48PM

i always said since the Nov 2006 launch of the PS3 (got mines Jan. 07) that 2008 would be Sony's year for the PlayStation 3. we are not even 2 full weeks into the new year and the good news is coming in left and right it seems.

blu-Ray support as well........awesome call by you guys with the Warner Bros. blu-ray switch too in the predictions article

Dehshizknight @ Jan 11th 2008 4:48PM

If they have a price-drop by the time Killzone 2 drops, I think they will sell A LOT of units.

Akamaru @ Jan 11th 2008 5:16PM

Killzone 2 and Resistance 2. Who would have have thought that the PS3 would be king of shooters....

and platformers (R&C, Uncharted)....

and RPGs (FFXIII, Versus)....

and adventure games (God of War)....

All hail the king of GAMES!!!

Haiddasalami @ Jan 11th 2008 5:53PM

AMEN!!

ryan @ Jan 11th 2008 5:26PM

sweet! PS3 for cheap! now if they can just throw in a Dual shock 3 in i'll be happy to pick one up. :)

Shadowen @ Jan 11th 2008 5:54PM

As long as they dont also end up sacrificing quality for cost, like Microsoft did with the 360.

Dehshizknight @ Jan 11th 2008 5:59PM

Nope. That might be why they couldn't lower costs until over a year later.

Pipe @ Jan 11th 2008 6:07PM

I dont really care about the price cuz once MGS4 comes out i will be buying my PS3 then but it would be a plus

xvertigenx @ Jan 11th 2008 6:10PM

That crappy jpeg is all you could find for ps3fanboy?

Anyway @ BigRedDog: From what I understand retailer profit margins are very low. Sure, they make a bit, and you have to factor in shipping and all. But overall the markup isn't very high at all. Basically they make the money off of the software, not the console.

Case in point, (these are all guestimates) a best buy employee gets an employee discount of like %20 percent off on games and 5% (if even) on consoles.

Dcrad @ Jan 18th 2008 8:38PM

Ace!

Hyams @ Jan 11th 2008 7:20PM

Yeah, I'm gonna go ahead and vote you down.

Hyams @ Jan 11th 2008 7:45PM

Damnit, why do you keep on deleting the trolls after I've made a not-so/witty reply?

DaveUK @ Jan 11th 2008 7:20PM

interesting news, but it doesn't get away from the fact that the 360 has sold in much larger numbers, has a better online experience and currently has four times as many games in development.

Cornerman8 @ Jan 12th 2008 12:27PM

four times as many games in development for the 360? Are you sure? Sony is has more studios than MS and Nintendo combined. And third parties are basically shipping the same games for both Sony and MS (save Ninja Gaiden, Fable 2, and Too Human).

Josh @ Jan 11th 2008 7:49PM

With cheaper prices the ps3 might finally catch on.

http://www.you-cubez.com/?referer=3535

tengoweba @ Jan 11th 2008 8:50PM

tengo el gato en los pantalones, y me la pelan pinches fanboys

Shad @ Jan 12th 2008 4:20AM

Actually, there are no profit margins on console hardware. When I was at EB, we sold the PS2 for 299 and paid 292 for it.

kingofwale @ Jan 11th 2008 10:48PM

what Sony needs to do is instead of cutting another price (not $100, maybe a $50 one), they need to bundle good games with the console.

They need to make a bundle of R&C and Uncharted. two of the best games on PS3 right now, so people can go home and play it right away and then tell their friends how great it looks on their Big screen TV.