Estimated PS Vita bill of materials : $159.10

[Paul]

greenmedic88 said:

Paul said:

greenmedic88 said:
R&D costs are done and paid for. Every quarter that passes with R&D personnel on project (and I believe the PSV had been in development dating back to at least 2008, probably earlier) go down in the books as quarterly expenses. It's not like new projects build up some sort of bill paid for on credit that has to be paid off once the product ships.

The marketing budget was actually fairly low keyed in terms of expenditures which may just reflect the importance (or rather lack of) the PSV has for SCE's immediate and long term plans. Not exactly confidence inspiring, but many are of the notion that it's the games rather than the hardware that should ultimately be advertised, and until those compelling titles are available, there's no sense in spending even more to promote that which is not yet available, even if that approach did pay off massively for MS and Kinect. Regardless, whatever SCE spends on marketing does go into the cost of every unit sold at retail, which is yet another reason why it makes little sense to sell at cost, or at a loss, even when that business model has worked in the past.

But one has to acknowledge there is a massive difference between selling a piece of hardware with a BoM of $159 for $299 versus a BoM of $840 for every PS3 sold at $599 on launch.

Sony doesn't have any debt? I think you better check their balance sheet again.

Post like this are completely non-sensical when we have no idea how much money goes into assembling all the bits, putting them in a box, sending them on a big boat, paying the retailer to sell it and advertising that the product is available. Oh yeah, and paying back the bill for the R&D project.

Can you acknowledge that R&D costs go on the books on a quarterly basis or are you under the impression that they don't go on the books until a product goes on the market and begins to generate an ROI? yes, they are firmly planted in Sony's past losses and current liabilities now.

That's a rhetorical question. 

You don't seem to have any idea how much money goes into assembling all the bits, the packaging and logistics of delivering the end product to retail. Try not to make the mistake of projecting one's own ignorance onto anyone else. If you don't know, say so. (I'm pretty sure I did say eactly that above, if someone did know the exact details of the cost of the Vita I'm pretty sure they would have posted it. Since you didn't post the exact cost I assumed you don't know what it is either)It's not a big deal. 

Assembly costs for smartphone devices generally run under $10 per unit. "Supporting materials" includes documentation, manuals, printed materials, and of course the box it's packed in. In the case of the PSV, it's about $10 per unit which was included in the BoM. Traditionally when iSuppli does a BoM breakdown, they include assembly costs as well. 

The point wasn't whether SCE was making a profit on every unit based upon the per unit BoM; it was that the cost to produce each piece of hardware is significantly less than what just about everyone had assumed. That's true

The part of your initial post that initially caught my attention was the following statement: "
It's not like new projects build up some sort of bill paid for on credit that has to be paid off once the product ships".

I disagree with this. They have to either pay for the project out of current income or borrow money to pay for it. Since Sony as a whole entity was losing money during Vita's R&D period it's hard to say that it would have been paid out of Sony's current income. However you look at it, Sony has large liabilities that will have to be paid down in the future with interest, and the cost of developing the Vita form part of that current liability.