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TheBigFatJ on 03 October 2007
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drkohler said:
TheBigFatJ said:
W29 said:
I think Sony is going to find ways to cheapen the console. And I wouldn't blame them for doing that. If they do come out with a PS3 model that is $400. You can best believe I'm buying that console.

We *know* Sony will release a $399 PS3. We strongly suspect it will be at an even greater loss to Sony than the current models, because Sony cannot possibly cost reduce the device this fast (they don't have the technology).

The question here is: will they make it physically smaller. The size of the PS3 (which is already about $400 in Japan) is seen as one of the biggest hinderences to its uptake in Japan.

Reducing the size of the print/the entire case would obviously increase the overall production cost while only marginally decrease the price of the board. Board costs (per revision) are calculated by:

(Size of board) x (Number of layers) x (Holefactor) + development costs

Development costs is a one time only contribution to the overall costs which includes design, fabrication tools, (re-)programming chip and testing machines. Holefactor is basically a measure on how many holes you have to drill, it is 1 for a board without holes and probably would go upto 3-4 for a perforated board.

A PS3 board currently costs around $6 to produce (give or take a buck). Even if by removing the PS2 chip one could eliminate one or two layers, a reduction of the board size would yield a savings of maybe $1. Now why would changing the board size increase the overall costs? Pretty obvious, the plastic case no longer fits (you need a new case, new tools), and the cooling stuff no longer fits (another redesign, again new tools required).

My calculation bring the production costs of an Euro-PS3 currently sold to about $410 (-10%/+5% margin). Removing all the bits mentioned (and possibly a 65nm cell engine), keeping everything else the same, assuming material was ordered early enough for the next production run, the production cost would be about $390 (-10%/+5%) for this new PS3. Sell a game and Sony is about at zero loss with this SKU.


Thanks for clarifying the motherboard cost issue. $6 for production of the board is on the low side of what I would have guessed.

Your cost estimates have a very small range. How did you come up with those numbers and what are the sources? With such a small range, you must be very confident about all of the costs involved. If your production costs are correct, it would be curious as to why the PS3 keeps bringing down Sony's bottom line, especially since Sony sells almost all Euro PS3s well abouve $410 even if you factor in VAT.