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PS3 production cost cut could reach up to US$ 100

Posted May 7, 2007 at 12:29AM EST by QJ Staff

Listed in: PS3 Tags: Digitimes, iSuppli, playstation 3 updates, price drop, Sony

Here's yet another reason why there could be a PS3 price cut in the near future: Blue-ray diodes are not only getting cheaper, but they're being produced in increasing quantity as well - so much that Taiwan-based game console makers are predicting no less than a US$ 100 production price cut of Sony's shiny black console, as Yen Tin Cheng and Adam Hwang of Digitimes reports.

With Sony Shiraishi Semiconductor's announcement of expanding its monthly production capacity of blue-violet laser diodes to 1.7 million (as well as beginning production of 240mW blue-violet laser diodes), it's not hard to connect the dots: increase in supply means decrease in price, which should affect the PS3's production price tag a hefty 0's worth.

It's also something to note that besides this potential drop, the Xbox 360 Elite's production cost has dropped down to 3.30, based on latest estimates by iSuppli, a research firm, which could mean that price drop we've been waiting for can't be all just wishful thinking.

And for your reading convenience, we've attached the production cost breakdown of both the Sony PlayStation 3 and the Xbox 360 Elite.

PS3 and Xbox 360 Elite Breakdown of production costs:

Item                            PS3 (60 GB version) Xbox 360 Elite
Motherboard, CPU,                  352                      204
graphics processor,
chipset, etc.
Hard Disk Drive                        125                        19.45
Power supply           54                 43
Bluetooth,                                19.60                       N/A
802.11 b/g
network modules
Other components                  150.50                     N/A
Chassis and related                61.75                      25.25
Assembly                                   40                         6.10
Total cost                                840.35                   323.30
Retail price                               599                         399

Will the PS3 ever get its price cut we've all been waiting for? Updates as they happen!

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The system hasn't been out a year and people want to slash $100 off the system. If it is possible - even Sony may consider holding out until the holidays before a cut considering how much of a hit they take on every system. However, this is nothing new - Sony has always taken a hit with their consoles - they want to be new and innovative and powerful. They did it - but it's expensive.

# ... — Guest 2007-05-07 02:57

I'm pretty sure iSuppli got the Elite mixed up with the Pro. The Elite is $479 retail, not $399.

# Production costs have to be bunk — Guest 2007-05-07 03:07

Those numbers are suspect. Probably some dork just adding up what it would cost him to build one if Newegg offered all the parts.

125 for a HDD? 105 more then Elites and half the size? 40 for assembly? Someone is just talking out of their ass there.

Even the Cell and MB costs are just BS, who knows what they costs. but unlike 360, Sony doesn't have to license CPU from IBM on top of production costs since they co-own it. Most of the Cell costs are recovering R&D so its harder for an outsider to put a price on it.

# QJ is getting even worse — Guest 2007-05-07 03:45

There is no source, becasue these numbers are just made up. Seriously QJ, get new bloggers.

# made up — Guest 2007-05-07 04:20

These are just numbers that somebody has made up off the top of their head. I know these are fake as micrsoft is not making any profit on their 360 yet and if you dont belive me here is a source backing this up:

http://www.engadget.com/2007/05/06/microsofts-xbox-360-

to-finally-become-profitable-in-2008/

Also why would a 60gb HDD that you can buy at $50 off the internet cost $125??? And please explain why a custom made manufactured HDD from microsoft only cost $19.50?!

# I don't think so — Burn_Griffith 2007-05-07 04:21

No offense but you guys suck when it comes to stuff like these. They DID find some sources okay? Nuff said.

# .. — Guest 2007-05-07 04:30

Waiting for my PS3 Elite so I can say I paid the most of anyone :)

# no way — Guest 2007-05-07 04:44

Most of that looks completely wrong... numbers totally don't add up.

# could this article have any more errors? — Guest 2007-05-07 05:58

Apparently no one bothered to look at the original article on digitimes site http://www.digitimes.com/systems/a20070507PD200.html. For the link impaired

numbers are ps3/360 elite

mobo, cpu, gpu, etc 352/204

optical drive 125/19.45

HD 54/43 (there's something wrong Sony is not paying more for a 60 GB than MS is for a 120 GB)

Power supply 37.50/25.50 (maybe but the 360's requires an ext enclosure)

Bluetooth/wifi 19.60/NA

Other components 150.50/NA (This has to be bogus. What major component isn't listed that costs $150?)

Chassis and related 61.75/25.25 (Seems a little high for molded plastic in either case)

Assembly 40/6.10

Total 840.35/323.30

Retail $599/$399

So what else is wrong here? Well the Retail for the 360 elite is $479. The cost of other included items is not listed, both include a wireless controller, the elite has component and hdmi cables, wireless headset, and the ps3 has a composite video cable and ethernet cable (not sure about the 360). If the majority of the prices is right and the "other components" line item is bogus, the PS3 has a cost of $690. So it is selling at a lose. the 360 numbers seem a little low since MS just said they will so break even on the console this year based on licensing and accessories, not based on manufacturing a console cheaper than retail price. I would like to know the real numbers but that'll never happen.

So with the new blue lasers Sony is producing, I would expect them to ramp up production and cut the price buy $100 for the fall holiday season. They'd likely still be selling at a lose but making up for it with software and controllers (the new rumble controllers).

# High estimates just not right. — Guest 2007-05-07 06:55

I think there estimates are extremely high.

Considering the fact that at launch they were supposably losing 100 to 150 USD. This can only have gone down. So the 840USD estimate is just not right.

Not to even mention they got the Elite price wrong, Sony suddenly paying more for HDs they probably make themselves, chassis and related costing 60 bucks versus 20 for the xbox and 150 dollars extra on ''other components''?

I put some massive question marks at the validity of the estimates provided by this company.

# lol possible to be made for 6.10 — Guest 2007-05-07 07:03

its posssible to be made for only 6.10 because it is made in mexico

# ooops! — Guest 2007-05-07 07:28

Armchair analyzers ftw!

Elite is 479, btw.

# Sony uses quality parts!!!! — Guest 2007-05-07 07:41

Sony uses quality parts...microsoft?...we all know! It is good sony got their hardware right form the get go...ya know!

# word lol — Guest 2007-05-07 08:34

lmo ive never seen such made up numbers in my life

# what a jip — Guest 2007-05-07 08:39

the xbox elite cost 329 altogether to make and they sell it for 479

the ps3 cost 840 to make and the sell it for 600

and sony is gona drop the price next year

who says sony doesn't care about its customers

# Got something wrong? — Guest 2007-05-07 08:42

LoL, thats cute:

Assembly 40 6.10

Sony pays $40 for assembling, where MS only spends round 6? Anyone here who believes this?

And what about that nonsense:

Hard Disk Drive 125 19.45

# yeah — Guest 2007-05-07 09:42

i hope they drop the price cause then i will buy one :)

# ummm... — Guest 2007-05-07 10:11

$19 for a 120gig? wow...

and only $6 in assembly cost...

Maybe its just me but that chart seems a little off.

# Only American — Guest 2007-05-07 10:33

PS3s are made in China... Asian region Ps3s are Japan made.

# Price drops — AoxomamoxoA 2007-05-07 10:42

Either way, if Sony drops their price so will MS so not much will really change. You could get a PS3 for $500 or a 360 for $300, same difference.

I dont see Sony dropping their price till Xmas of 2008 though. Consoles dont usually drop their prices in the first year. But since its MS second year, its a possibility that they might drop their price by $50 or $100 (for Premium only) by Xmas of 2007. That would land a pretty harsh blow to Sony, forcing them to either drop their price prematurely to compete or run the possibility of losing even more potential customers due to their high price.

# ???? — Guest 2007-05-07 12:30

I think i heard somewhere that smaller hard drives sometimes costed more than large Hard drives.

# lol yeah — comedy 2007-05-07 12:37

the most expensive one i bought had no space on it at all!!

you should not believe everything you read

# Great news for the PS3 — Guest 2007-05-07 12:49

What should anybody buy... Something that cost $840 to make, but they sell it to you for $599 or something that cost $323 to make but they sell it to you for $479

In my book, getting $840 worth of awesome hardware and paying only $599 is a much much much better deal than getting $323 worth of hardware (how could anybody now claim the 360 could be better better than the PS3 $840 worth of hardware is out of my mind) and then paying $479 for that cheap hardware.

Now, I'm just hoping to find another company who would build a 52 inch 1080p LCD tv for $1300 but sell it to me for $900 instead and I'll be in business : )

So those guys just proved that the playstation is worth $840 and the Elite is worth $323 in hardware. Must be because the PS3 has the best motherboard, CPU, GPU, Media, etc....

# xbox owners rip off — Guest 2007-05-07 14:55

xbox owners rip off look at the price value more expensive for the consumer than the production cost. ps3 is cutting off the price, bye.

# fsaf — Guest 2007-05-07 14:57

BULLLLL*****TTT TTT

since when the ***** was the elite 399?

peice of sheit liar mon

# hard drive — mreverdred01 2007-05-07 16:19

the PS3 uses a 2.5" Serial-ATA hard drive while I'm guessing the Xbox uses a 3.5" of some sort. What it means is that the PS3 uses compact laptop-style hard drives while the Xbox uses bigger desktop-style ones. The bigger ones, which are 3.5" instead of 2.5", cost less to make since there's more room to cram all that memory stuff into.

# lies! — mreverdred01 2007-05-07 16:23

qj.net had an article similar to this a long while back with the same PS3 figures, only it was comparing it to the Wii, and that article had sources. I could go and find it for you, but I'm kinda lazy and you're not really worth my time since you're probably never going to look back in here again.

# Bad news for the PS3 — Guest 2007-05-07 21:58

Poster above is the village idiot, Companys charge what they think you will pay and they also need to make up their huge loses in development..

# 360 Elite and Blue Dragon — Guest 2007-05-07 22:03

When is the 360 Elite launch date for Europe?, I want One preferably the Blue Dragon game pack.

# hmm — Guest 2007-05-07 23:47

The first xbox dropped the price after couple of months (3 months after relese if I remember). So the 360 price mabye drop soon enough.

# 'extra' components — Guest 2007-05-08 03:14

The 'extra' components for the PS3 is the blu-ray drive...it's is much more $$ than the practically free dvd drive in the x360.

# 2.5 and 3.5 — Guest 2007-05-08 12:24

Your right. If you look up the cost of a 2.5" SATA on any regular electronics website it's about that price. As far as the 3.5" in the elite it must be the cheapest piece of trash, which is understandable why they break.

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