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iSuppli: Teardown of Sony's PlayStation 3

Forums - Sony Discussion - iSuppli: Teardown of Sony's PlayStation 3

Marty8370 said:
Bitmap Frogs said:
Marty8370 said:
Bitmap Frogs said:
mysticD said:

Wait didn't Dkholer went to MS forum with "insider" information that PS3 only cost $350.00 to build.

http://www.vgchartz.com/forum/thread.php?id=53240&page=4


And Groucho call us bunch of ignorances when we ask him to provide something to back up his claim.

So after 2 years Sony still lost $50.00 per console... it make sense why they would put out the 160GB sku because with that Sku at least they are breaking even or even make some money.

 

I was about to bump that thread with this...

For those casting shadow upon iSupply (DMJ, I'm looking at you!) - predicting sales trends is one thing, tearing down a piece of electronics and asking manufacturers for volume pricing on components are two different things.

 

For starters iSupply estimates rough costs, so they could be more or less. Depending how old there info is.

 

With a 10% margin of error, Sony is still losing money on every console sold. Remember manufacturing, packaging and shipping aren't included (iSupply) only estimates the bill of materials on the device itself. Also, Sony sells the console to stores for less than the retail price (obviously) and in some places (like the whole EU) there are also sales-tax bumping up the retail price.

 

Yes, but in different market the margins can be better. So Sony might not be losing on every PS3 console made.

 

 

Oh boy... so now it's come down to third world countries representing a residual amount of sales as the bastion of profitability?

 





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For reference, here is the original PS3 teardown cost from Isupply.

 



I wonder how much the Blu-Ray drive costs now? It was the second most expensive component when the PS3 launched. ($125)



starcraft said:
It appears to not factor in assembly costs, as well as distribution and storage costs. This is not good. I thought they were substantially closer to breaking even than this.

I wont speculate as the how much those factors add to the $448.73 component cost, but even if it's only a few dollars its a hefty loss for those looking for a price cut soon (like yours truly) so as to pick up the console.

Do you have access to the full teardown?  iSuppli typically includes an assembly estimate as a line item.

Shipping and inventory management is not included in these estimates.  

 



Thanks for the input, Jeff.

 

 

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Bitmap Frogs said:
Marty8370 said:
Bitmap Frogs said:
Marty8370 said:
Bitmap Frogs said:
mysticD said:

Wait didn't Dkholer went to MS forum with "insider" information that PS3 only cost $350.00 to build.

http://www.vgchartz.com/forum/thread.php?id=53240&page=4


And Groucho call us bunch of ignorances when we ask him to provide something to back up his claim.

So after 2 years Sony still lost $50.00 per console... it make sense why they would put out the 160GB sku because with that Sku at least they are breaking even or even make some money.

 

I was about to bump that thread with this...

For those casting shadow upon iSupply (DMJ, I'm looking at you!) - predicting sales trends is one thing, tearing down a piece of electronics and asking manufacturers for volume pricing on components are two different things.

 

For starters iSupply estimates rough costs, so they could be more or less. Depending how old there info is.

 

With a 10% margin of error, Sony is still losing money on every console sold. Remember manufacturing, packaging and shipping aren't included (iSupply) only estimates the bill of materials on the device itself. Also, Sony sells the console to stores for less than the retail price (obviously) and in some places (like the whole EU) there are also sales-tax bumping up the retail price.

 

Yes, but in different market the margins can be better. So Sony might not be losing on every PS3 console made.

 

 

Oh boy... so now it's come down to third world countries representing a residual amount of sales as the bastion of profitability?

 

 

Thats been true of any product. Why do you think you think manfacturing shuts up shop in the west where it's expensive, and moves to asia where it's cheaper.



WiiStation360 said:
I wonder how much the Blu-Ray drive costs now? It was the second most expensive component when the PS3 launched. ($125)

 

I'd guest at $60-75



Bitmap Frogs said:
mysticD said:

Wait didn't Dkholer went to MS forum with "insider" information that PS3 only cost $350.00 to build.

http://www.vgchartz.com/forum/thread.php?id=53240&page=4
And Groucho call us bunch of ignorances when we ask him to provide something to back up his claim.
So after 2 years Sony still lost $50.00 per console... it make sense why they would put out the 160GB sku because with that Sku at least they are breaking even or even make some money.

I was about to bump that thread with this...

Quelle surprise.. the two resident nutjob smysticD and Bitmap Frog jump on the occasion trying to ridicule me once again... Look folks, early this year, the manufacturing costs were estimated to be around $400 (for example, So claims Nikko Citigroup analyst Kota Ezawa, BusinessWeek. You can find similar estimates googling long enough).

What made the manufacturing price jump up almost $50 according to iSupply? We would have to see the new detailed breakdown to guess what happened. I'll stick to my estimate of $350 for the manufacturing costs of currently sold PS3s, and note this is a value +/- 10% (how iSupply can estimate costs down to the last cent is irritating to say the least, it is very bad practise for anyone to estimate costs giving values to the last cent).  I could not find a detailed breakdown of the $448.73 so it is hard to tell what went wrong this time (and yes, resident two nutjobs, the $840 table had its errors in it).

Assuming the manufacturing costs indeed "rose" to $450, this would mean Sony loses at least $100 per console (there is something like shop margin and taxes in case you missed it. In Europe, this increases the end price somehwere between 20 to 35% depending on country. So selling a console at 300 Euro = $450 would equate to losing 20-35% for Sony. (And to preempt any further comments from me: Yes, two residents nutjobs, I am making up all those numbers and I have no idea what I am talking about since I have never worked in mass manufacturing industries for 25 years).

 



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drkohler said:
Bitmap Frogs said:
mysticD said:

Wait didn't Dkholer went to MS forum with "insider" information that PS3 only cost $350.00 to build.

http://www.vgchartz.com/forum/thread.php?id=53240&page=4
And Groucho call us bunch of ignorances when we ask him to provide something to back up his claim.
So after 2 years Sony still lost $50.00 per console... it make sense why they would put out the 160GB sku because with that Sku at least they are breaking even or even make some money.

I was about to bump that thread with this...

Quelle surprise.. the two resident nutjob smysticD and Bitmap Frog jump on the occasion trying to ridicule me once again... Look folks, early this year, the manufacturing costs were estimated to be around $400 (for example, So claims Nikko Citigroup analyst Kota Ezawa, BusinessWeek. You can find similar estimates googling long enough).

What made the manufacturing price jump up almost $50 according to iSupply? We would have to see the new detailed breakdown to guess what happened. I'll stick to my estimate of $350 for the manufacturing costs of currently sold PS3s, and note this is a value +/- 10% (how iSupply can estimate costs down to the last cent is irritating to say the least, it is very bad practise for anyone to estimate costs giving values to the last cent).  I could not find a detailed breakdown of the $448.73 so it is hard to tell what went wrong this time (and yes, resident two nutjobs, the $840 table had its errors in it).

Assuming the manufacturing costs indeed "rose" to $450, this would mean Sony loses at least $100 per console (there is something like shop margin and taxes in case you missed it. In Europe, this increases the end price somehwere between 20 to 35% depending on country. So selling a console at 300 Euro = $450 would equate to losing 20-35% for Sony. (And to preempt any further comments from me: Yes, two residents nutjobs, I am making up all those numbers and I have no idea what I am talking about since I have never worked in mass manufacturing industries for 25 years).

 

 

If PS3 production cost is $448.73 that coverts too £302.62

PS3's RRP is £299 so the loss is £2.63 big deal.

Can't really work out what small loss Sony makes when selling to trade as who knows the trade price. Anyhow any loss will be made back on games/accessories.

Even Home/PS Store will contribute.