| TheBigFatJ said: 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. |
I am quite sure my production estimates are reasonably within the ballpark (in the past 25 years, I had been in industrial projects that dealt with all the kinds of stuff you would need to make products like a console, for example). As far as the estimates go, they only include the production costs. Total estimates for every PS3 revision would have to include development costs and ammortisation costs. Now the last part basically tells you how much money you have to add to every PS3 produced to recoup past and ongoing development costs. These costs include the engineering group(s), the whole diode development thing - which the division that includes the PS3 department has to bear, aparently -, setup of the factory/factories/assembly lines neede etc.) While pretty much all revisions of the PS3 cost around $420 to produce, the total costs are completely different. We do not know the timeframe which Sony was/is planning to recoup development costs in, but given the statements from management that are flying around on the net ('you get $600 if you find a PS3 in a shop', etc) we can assume that Sonys idea was to recoup the costs with the first batch of PS3s made. This gives about the following price breakdown (all values estimated within -10%/+5%):
1. First batch of PS3 (USA(Japan units), probably around 5 million quantity:
$440 (production cost) + $300 development costs (diode, engineering) + $100 (diode) = approx $840 cost
2. Second batch of PS3 (castrated Europe/USA), probably ordered also at around 4-5 million quantity
$410 (production cost) + $100 (engineering) + $100 (diode) = approx $620 cost
3. Third batch of PS3 (the new fully castrated unit), probably ordered in even higher numbers
$380 (production cost) + $10 (engineering) + $10 (diode) = approx $400 cost per unit
(You can see that the numbers are roughly the same as the ones shown elsewhere by some company, but their individual price breakdown is often totally off reality).
The uncertainty in the numbers shows the fact that Sony is partially its own OEM, particularly for the blue diodes, and how much in advance Sony orders components for their products (this is a key factor in determination of the cost of a product. Given that the PS3 does not sell the numbers Sony thought they would, they might have a large inventory of stuff lying around, aprticularly diodes and harddisks etc).
