updated 11:50 am EST, Thu November 16, 2006
PS3 Cost Breakdown
Sony's oft-maligned PlayStation 3, which is due to launch tomorrow, is an "engineering masterpiece" that provides much more performance for the money than Microsoft's Xbox 360, according to a component pricing breakdown performed by market researchers iSuppli. The report reveals that the price of the PS3 is dramatically lower than the actual assembly costs, the entry-level 20GB model costing Sony an estimated $806 despite its $499 official price. The difference results in a $307 loss to Sony for every system sold that dramatically outweighs the price difference of the Xbox 360 Premium model, which loses only $76 per console. Click through for further information about the breakdown.
Blu-Ray is understandably a major contributor to the overall cost, iSuppli writes, adding $125 by itself in contrast to the $20 DVD drive of the Xbox 360. The NVIDIA-made RSX graphics chip is technically the largest factor and adds $129 to the assembly pricing. While such numbers are beneficial to the buyers themselves, they underscore both Sony's determination to promote Blu-Ray and the difficulty the company faces in turning a profit, as each console sale will need to be followed by multiple game and accessory sales for Sony to recoup its investment.