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Interesting PS3 cost-of-goods news...

Forums - Sales Discussion - Interesting PS3 cost-of-goods news...

everdom said:
If this is true, why does their financial report indicates that almost the opposite is happening?

Game development, Marketing and probably R&D costs for a Slimline PS3,PSPGo and probably next gen systems IE PS4 and PSP Go



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If that's true then the console war is far from over. But I thought about 2 months ago some other sony guy said they're losing $40 per console. So who knows really



Interesting language 'roughly 70%'. So is it around 70%, is it less and he's rounding up or, which seems unbelievable, he's rounding down when he says 'roughly'.

Given statements from 3 months, ago, this implies a further big drop in costs. Not impossible by any means with electronic goods, and particularly for an experienced manufacturer, but still on the impressive side of things.

If true, whether this refers to the rumoured 'slim' or the 'fat' current unit, if they are really dropping costs that fast then I'm sure they will make moves on price. Even allowing for the '10 year plan' time is running out for them to show some momentum, and they have to respond to the economic factors slowing demand.

Looking at their game releases, the obvious move, to maximise impact, would be to have PS3 drop, big titles launch and the Go to hit shelves. The combination would give them a big market awareness boost and likely drive a strong and potentially sustainable increase in baseline sales for the system.

In my experience, it's rare for a CEO to give widely incorrect figures, unless they're desperate or a crook it will come back to haunt them and will undermine their position - so if he say's around '70%' then I have to assume he means 'at least 65%' if not more.



Try to be reasonable... its easier than you think...

Perhaps the recession is at work, here?

Global demand for the raw materials used in all goods is way down, lowering the cost of these goods.

The same goes for things like freight, and lots of labourers might be taking pay-cuts (though I don't know if these things are counted in the 70% reduction).

Just a thought.



I believe initial reports pegged the ps3 at $850 or so. 30% of that would be $255. It's conceivable (barely) that the slim could cost that much to produce, factoring in the smaller chassis, 45nm processors, etc.

More likely it costs in the 300-350 range.  Let's say he rounded up from 65%.  A 65% reduction would put the current manufacturing price at roughly 300 even.



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^^

Yeah, I'd say for now it's best to take 65% as a guide. Anything much lower is too low even allowing for his use of 'roughly' and anything higher seems very unlikely.

So I'm expecting in very near future PS3 cost will be approx $300.



Try to be reasonable... its easier than you think...

You guys forget something. This is only the PS3. When you buy a PS3 you get more than a PS3. Dualshock 3, game name it those are also costs that this article not talkes about.



 

Lostplanet22 said:
You guys forget something. This is only the PS3. When you buy a PS3 you get more than a PS3. Dualshock 3, game name it those are also costs that this article not talkes about.

The controller and cables cost less than $10 total to manufacture.  They're a negligible cost.



The statement meshes with the presumed release of the PS3 Slim (which would be currently under production based on a fall release) with a reduced production cost.

This would also mesh with SCE's projections for selling 13m consoles through 2009 (still looking very unlikely at this point). There's no reason they would throw out such a high number only to vastly undershoot it if they didn't have lowered prices and lowered per unit production costs in the works.

Not really sure why anyone is being incredulous here: Sony has already proven themselves over two generations to be the kings of console production cost reduction.



makingmusic476 said:
Lostplanet22 said:
You guys forget something. This is only the PS3. When you buy a PS3 you get more than a PS3. Dualshock 3, game name it those are also costs that this article not talkes about.

The controller and cables cost less than $10 total to manufacture. They're a negligible cost.

Especially since they're composite cables.