PS3 Now 70% Cheaper To Make

[lost]

http://evavhost.com/i/news/ps3.jpg

Sony have let slip that the cost of producing the PS3 is now roughly 70% less than when the console launched.

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%.

“The cost reduction since we introduced the PS3 is very substantial and this is on schedule,” Oneda-san replied when asked about manufacturing costs. “We don't disclose how much of the PS3, specifically the cost deduction was achieved during the past two years. But that is on schedule.”

“About 70%, roughly speaking,” Oneda-san added when pressed further on the matter.

Although a precise manufacturing cost isn't known, it's widely believed that the PlayStation3 originally cost Sony approximately $800 (£485) per unit. In January 2008 reports surfaced that the manufacturing costs had been reduced by 50% to approximately $400 (£243). Although Sony wouldn't elaborate on exact figures, the 70% decrease suggests that costs have come down to around $240 (£146) per unit.

More at TVG.
(http://www.totalvideogames.com/PlayStation-3/news/PS3-Manufacturing-Costs-Reduced-By-70-14439.html)
He should have kept it quiet and maybe they could have made a profit for a while. They can't release this info and not expect a backlash if they don't drop the price.

[greenapple]

While I agree there might be some backlash, it comes out of ignorance.

Something has to pay for the R&D costs, plus the previous years of selling at a major loss.

It's not like each PS3 sold today exists in and of itself, outside of the system's historical development and costs.

In other words, retail price minus manufacturing costs for that particular unit does not equal profit. The costs column goes well beyond mere manufacturing, on a per unit basis.

[RMan]

He should have kept it quiet and maybe they could have made a profit for a while. They can't release this info and not expect a backlash if they don't drop the price.
Ehh, that's no biggie, I think most people know prices aren't set by what something costs, and most people won't get that info anyways. I do think they need to drop the price, though, at least get it in-line with other systems.

[DeadPixel]

I never had an issue with the pricing point of the unit. My problem has always been with the shitty controller and lack of decent online service. Not to mention the games were not that great for a long time.

If I were to get a Blu-ray player, it would most definitely be the PS3.

[lost]

I never had an issue with the pricing point of the unit. My problem has always been with the shitty controller and lack of decent online service. Not to mention the games were not that great for a long time.

If I were to get a Blu-ray player, it would most definitely be the PS3.

The online is lots better these days. The pad remains a matter of preference but doesn't last nearly as long as the 360 pad - the analog sticks are easily knocked out of balance.

[RMan]

The pad remains a matter of preference but doesn't last nearly as long as the 360 pad - the analog sticks are easily knocked out of balance.
Maybe there's some superior 3rd party ones out now. I just picked up a supperior Wii controller, and it works with my media center, which Nintendo one didn't. I've pretty much always found a 3rd party controller that spanks 1st party ones a year or two after a system's launch.

[the soUL TRAder]

Something has to pay for the R&D costs, plus the previous years of selling at a major loss.

It's not like each PS3 sold today exists in and of itself, outside of the system's historical development and costs.


While this is true, it's funny that when Sonys competition uses the same philosophy when pricing their accessories, DLC or online service it's called ass raping the gamer. ;)

However, why this truely might be alarming for Sony is that this indicates that their first party and heavily supported 3rd party titles might not be bringing them enough profitability to sacrifice profits on the hardware just to get more units into gamers hands.

It's a tough business model in this industry to rely on hardware and multiplatform 3rd party titles for profits.

[Agnostic]

It's about time they started using child labor.

[the soUL TRAder]

It's about time they started using child labor.

HaHa....Plus they're paying them in PSP playtime. 1 hour of production = 15 minutes of Persona.

[t3kl3r]

The online is lots better these days. The pad remains a matter of preference but doesn't last nearly as long as the 360 pad - the analog sticks are easily knocked out of balance.

Huh. I've never had any issues with any Sony controllers, nor have I known anyone who did. They always seemed very high quality to me. The N64 controller was the only one I've ever had analog stick issues with (who hasn't?).

I've also never seen a 3rd party controller that was superior to the original, but I'm curious to find out more. What 3rd party controllers have people preferred over their original? (Any console)

[RMan]

I've also never seen a 3rd party controller that was superior to the original, but I'm curious to find out more. What 3rd party controllers have people preferred over their original? (Any console)
I found Mad Catz controllers to be superior to the PS2/PS1 controllers, but I was not a big fan of the separated buttons on the d-pad. Like most people, I'd played PS1/PS2 more than most other consoles in their day, so those are the ones I bought the most controllers for. Only stock controllers I didn't care to replace were the XBox ones, I liked those pretty good. I think I also had a mad catz DC controller, but not sure. The Nyko Wii controller is nice, and although lt looks kinda goofy IMO, overall feels better and more accurate for IR than the stock controller.

[t3kl3r]

I found Mad Catz controllers to be superior to the PS2/PS1 controllers

I'll have to try a Mad Catz controller sometime and check it out. I remember getting one a long time ago for the PS1 and it felt cheap and uncomfortable. But that was a very long time ago.

[bean19]

@lost - Considering they haven't had a price drop in over two years and analysts have been predicting one for that long (in part because it was easy to predict that the cost of making the unit has been significantly below $400 for that long), I don't think Sony indicating this to investors a few months before their highly leaked upcoming price drop is going to significantly slow sales.

Anyone plugged well enough to even be reading this story is going to be a gamer who either already owns a PS3 or is going to wait for a price drop.

[bean19]

Huh. I've never had any issues with any Sony controllers, nor have I known anyone who did.
Agreed. I've broken several PS2 controllers and one Xbox 360 controller. I never personally broke an original Xbox controller, but I know my friends who played Halo like fanatics broke several.

For the most part, I think that all of them make very hardy controllers but all of them will break if you use them the amount that some of us gamers do.

[TeeCakes]

Seems like Sony's finally climbed over the metaphorical hill with the PS3 and are set to coast down the slope for the remainder of the hardware cycle.

Now that they're not wasting all the PS3 hardware revenue anymore, the new SKUs (PS3 Slim), price-drops, & the cooling sales of the Wii/360 could translate into a very good opportunity for Sony.

[Anenome]

Seems like Sony's finally climbed over the metaphorical hill with the PS3 and are set to coast down the slope for the remainder of the hardware cycle.

Now that they're not wasting all the PS3 hardware revenue anymore, the new SKUs (PS3 Slim), price-drops, & the cooling sales of the Wii/360 could translate into a very good opportunity for Sony.

- You wish.
My god, the astroturfing never ends with you.

Yes, Sony will continue coasting--in third place, until the next console round, sure.

Fact is, as has been pointed out, Sony can't really afford to drop the console price, even with the reduced hardware costs. Making -that much- on hardware is pretty dumb, though, $150? But what can they do, they're already billions in the hole with the PS3. Even if they drop the price by $100, they're still more expensive.

But, they cannot do much catching up at $400, with both competitors at nearly half that price.

Also, the PS3 slim won't be as cheap as the classic model for another year or two, naturally.

All Sony can really do is make sure that their next console isn't stupidly expensive, and that Kutaragi hasn't designed it only to claim that it's "too cheap" at $600, and that people will be happy to work overtime to afford it, el oh el.

Yes, I got another classic Kutaragi jab in, so sue me :P

[Anenome]

Seems like Sony's finally climbed over the metaphorical hill with the PS3 and are set to coast down the slope for the remainder of the hardware cycle.

Now that they're not wasting all the PS3 hardware revenue anymore, the new SKUs (PS3 Slim), price-drops, & the cooling sales of the Wii/360 could translate into a very good opportunity for Sony.

Sony Posts 37b Yen Q1 Loss (http://www.totalvideogames.com/PlayStation-3/news/Sony-Posts-37b-Yen-Q1-Loss-14437.html)

"The continued downturn of the global market and the appreciation of the Yen led to Sony posting a decrease in sales, leading to an operating and net loss for the first quarter ended June 30th 2009.

Sales for Sony Corp during the period fell by 19.2% to 1.60 trillion yen from 1.98 trillion yen in the previous year. As a result Sony Corp recorded an operating loss for the period of 25.7 billion yen compared to an operating income of 73.4 billion yen for the same period in the prior year. A net loss of 37.1 billion yen was recorded compared to a net income of 35 billion yen.

Sony Corp's full year forecast remains unchanged, with sales expected to top 7.3 trillion yen, compared with 7.73 trillion yen for fiscal 08. An operating loss for the full year of 110 billion yen is expected, leading to a net loss for FY09 of 120 billion yen.

Looking at the Games business realigned under the Networked Products & Services division reveals that sales dropped by 37.4% year-on-year to 246.8 billion yen compared with 394.4 billion yen. Sony attributes this to lower game and sales of VAIO PCs.

Sales in the games business decreased year-on-year as a result of a decrease in unit sales of PSP and PlayStation3 hardware and an overall decrease in software sales. During the quarter ended June 30th 2009, Sony sold 1.1 million PlayStation3 units and 1.3 million PSP units, compared to 1.6 million PS3 units and 3.7 million PSP units in the same period last year.

The decline in sales for the division led to an operating loss of 39.7 billion yen compared to an operating income of 4.6 billion yen for the same period in the prior year. An operating loss of 414 billion yen is forecast for the division for the full fiscal 2009 year ended March 31st 2010."

- Suck it, Tee.

[lost]

The Sony controllers have always been good but the one of the ones I got at purchase now leans to the right by default. Maybe I've just had a bad experience.

[blackzc]

http://evavhost.com/i/news/ps3.jpg

Sony have let slip that the cost of producing the PS3 is now roughly 70% less than when the console launched.



More at TVG.
(http://www.totalvideogames.com/PlayStation-3/news/PS3-Manufacturing-Costs-Reduced-By-70-14439.html)
He should have kept it quiet and maybe they could have made a profit for a while. They can't release this info and not expect a backlash if they don't drop the price.

No, the public isnt full of moron fanboys who worry about this shit, myself included. So they can still make a profit. Good for sony. Got i wonder what a wii cost to make? 30$?

[blackzc]

Now that they're not wasting all the PS3 hardware revenue anymore, the new SKUs (PS3 Slim), price-drops, & the cooling sales of the Wii/360 could translate into a very good opportunity for Sony.

even though i think the 360 far better overall console atm i can totally see sony catching up with as long as this cycle is going to be. Live is just so good sony is going to have to do something special.

[KlausFlouride]

They deserve to make a profit. They shouldn't have to lose money on every console. That shit gets old and the shareholders know it. Why bother making consoles to lose money on everyone?

[dividius]

They deserve to make a profit. They shouldn't have to lose money on every console. That shit gets old and the shareholders know it. Why bother making consoles to lose money on everyone?

They can afford to sell them at a loss because they make all of their profits on games and accessories. It's a business model you see in tons of different industries: make the initial sale at a loss, tack on additional sales to make your loss back and then some. If it made more fiscal sense to sell the consoles for a profit, then they would. The fact is that they would be so expensive that almost nobody would buy them.

Personally, I just want them to cut the price so I can get one. The fact that price cuts have been rumored for a year or so has to be negatively affecting sales. I can't be the only person who won't buy a PS3 until the price is cut, as no one wants to be the sucker who sees the price drop the week after they buy it. And I'm a very patient man. :)

[RMan]

I'll have to try a Mad Catz controller sometime and check it out. I remember getting one a long time ago for the PS1 and it felt cheap and uncomfortable. But that was a very long time ago.
Honestly, I'd say they did feel kinda cheap, but they were responsive, comfortable, and worked well for me (don't think one ever broke on me), but if they don't feel good right off then I wouldn't bother. I would take comfort over durability, but that's me. I haven't bought one this generation, though, so not sure I'd like them now, and of course, YMMV.
For the most part, I think that all of them make very hardy controllers but all of them will break if you use them the amount that some of us gamers do.
Yea, I'd agree with that, my complaints about 1st party controllers were about design, just not liking the feel/shape, I don't think I'd complain about them breaking. Luckily, when you're buying 3 or so additional controllers, gives you a nice opportunity to try out alternatives.

[the soUL TRAder]

Too bad that can't design in ease of developement as easily as they can reduce manufacturing. What they really need to do is make the thing 70% more developer friendly.

[boneyardweller89]

This is exciting news for me. I already have a PS3 and I love it but I only have like 3 friends that have a PS3. Maybe after this Christmas I'll have more people to play with online.

[bean19]

This is exciting news for me. I already have a PS3 and I love it but I only have like 3 friends that have a PS3. Maybe after this Christmas I'll have more people to play with online.
Right. If enough of my friends also get a PS3 it won't be hard to talk them into NOT paying for Xbox Live and instead playing for free on the PS3.

This is dependent upon the PS3 having features that I'm not sure it has (and haven't needed to find out about yet because none of my friends own one) like the ability to create voice-chat OUTSIDE of games, and invite other players to games from within the game.

[TeeCakes]

- Suck it, Tee.

No thanks.

But seriously, change that slanderous sig where you blatantly misquote me, or deal with the mods. :mad:

[Anenome]

No thanks.

But seriously, change that slanderous sig where you blatantly misquote me, or deal with the mods. :mad:

- Oh it's hardly slander. It's parody! I simply changed the quote to reflect reality! :P

And I think it's important people be reminded of the post where you admit to your blatant bias; admit that you're a member of the Sony Defense Force, an organization/website committed to astroturfing/lying for Sony.

[Anenome]

Tee whined to the mods and had them remove my sig, eh? Fine, here's one that quotes you directly that you can't complain about.