By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Sony Discussion - Estimated PS Vita bill of materials : $159.10

Soleron on 28 April 2012

That's what it costs Sony to have it made for them. This doesn't pay for a single SCE employee to exist, so consider they have thousands of employees in the Playstation division (for marketing, future R&D, testing, returns, firmware, etc) and add that to the cost.

The more Vitas they sell, the more  diluted those fixed costs are over each unit.  If they don't sell enough Vitas it should be obvious they'd make a loss even if each unit was very profitable.



Around the Network
Lafiel on 28 April 2012
Panama said:
Now factor in production, marketing and R&D costs among other costs.

The 3DS was found back at launch to cost less than $100 in terms of materials, yet at $170 it's selling at a loss and will continue to do so supposedly until August. That in itself should be a strong indicator that the cost of the materials of a platform isn't an adequate measure in discerning as to whether it is profitable.

Also those opting for the Vita to be discontinued after 2million units being sold after being on the market worldwide for a period of about 3 months now, are probably the same individuals that claimed the 3DS was doomed to fail and that the handheld market is dead.

exactly, there are sooo many more costs involved , that I think focussing on material costs to argue wether or not sth is profitable is very misleading



Paul on 28 April 2012
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.



flagstaad on 28 April 2012

With the price of the pieces and adding the other cost, It is possible that Sony is not losing money on each unit, maybe even making a very, very small profit (5 dollars?). But they are in no position to reduce the retail price any time soon, unles they want to start losing a lot of money. Maybe by the holyday season they can afford to create some bundles with memory cards or even a launch game and just lose a few dollars in each unit, but it will help increase the market share.



Dgc1808 on 28 April 2012
Panama said:
Now factor in production, marketing and R&D costs among other costs.

The 3DS was found back at launch to cost less than $100 in terms of materials, yet at $170 it's selling at a loss and will continue to do so supposedly until August. That in itself should be a strong indicator that the cost of the materials of a platform isn't an adequate measure in discerning as to whether it is profitable.

Also those opting for the Vita to be discontinued after 2million units being sold after being on the market worldwide for a period of about 3 months now, are probably the same individuals that claimed the 3DS was doomed to fail and that the handheld market is dead.


The estimates i saw for 3ds were between 100.71-103. Never saw less than 100.

 3DS 100$Manufacturing vs 170$ sale price. That 70$ isn't covering the retailer cut, marketing, shipping, packaging, etc. I guess.

PSV 160$Manufactuing vs 250$ sale price. That's a 90$ difference so I'm guessing that Vita's profit margin is around 5-10$ assuming Nintendo isn't taking too big of a hit on Each 3DS.



4 ≈ One

Around the Network
Gilgamesh on 28 April 2012

There probably making a fortune off the memory cards, there marked up triple the price of an average card with the same memory.



Alby_da_Wolf on 28 April 2012

Well, having components cost smaller than retail price doesn't grant profitability yet, but it's the most important starting point to achieve it, anyway! Chips cost should drop the fastest, plastic and metal materials for case, board and buttons should have a price oscillating with raw materials ones and the screen should drop cost quite fast, but not as fast as chips. Mass production drives costs down faster. Most probably a $50 cut could become feasible without losing money on HW after Q3 or Q4 2012, depending on how sluggish sales are before the cut. So the best option is to release some big games months before doing any cut, unless the latter be absolutely undelayable anymore.



Stwike him, Centuwion. Stwike him vewy wuffly! (Pontius Pilate, "Life of Brian")
A fart without stink is like a sky without stars.
TGS, Third Grade Shooter: brand new genre invented by Kevin Butler exclusively for Natal WiiToo Kinect. PEW! PEW-PEW-PEW!   


Chark on 28 April 2012

To clarify confusion over the cost of the system. The $160 is just manufacturing and the only costs associated to individual sales are distribution and retail cut. Retail is usually, 15%? So for wifi vita, that's $37.50 making it just under $200. Add whatever distribution costs might be and you have the profit margin. Advertising, R&D, etc. are not part of this equation, those fall under the cost of development which have already been incurred, even advertising was probably under contract. Those costs can't be tied to individual sales. The profits made from current Vita sales are applied to the cost of development and Sony predicts they will not see returns for 3 years. I do not know if that 3 year mark is including accessary and software sales profit, it could very well be limited to hardware. Actual return on investment might come much sooner than 3 years if true.

Also the memory cards aren't triple price over SD, only twice. There are a few manufacturing cost differences from SD in the Vita cards but the profit margins are still high on those, but it is normal to see increased profit margins on internal memory so I don't know why people make this an issue as if it was different. If anything external provides the consumer with more freedom than internal. But it would be nice if they were cheaper wouldn't it?



Before the PS3 everyone was nice to me :(

logic56 on 28 April 2012
Slimebeast said:
Panama said:
Now factor in production, marketing and R&D costs among other costs.

The 3DS was found back at launch to cost less than $100 in terms of materials, yet at $170 it's selling at a loss and will continue to do so supposedly until August. That in itself should be a strong indicator that the cost of the materials of a platform isn't an adequate measure in discerning as to whether it is profitable.

Yeah exactly, such as retailer margins, distribution costs, packaging, cost from returns of faulty devices, and more.

It's always the same thing. These lists of raw bill of materials appear and the fans immediately draw the conclusion that there's huge potential for profit per hardware unit sold.

noo that's what the common haters think, which leads to post like yours and the one above it



logic56 on 28 April 2012
Soleron said:

That's what it costs Sony to have it made for them. This doesn't pay for a single SCE employee to exist, so consider they have thousands of employees in the Playstation division (for marketing, future R&D, testing, returns, firmware, etc) and add that to the cost.

The more Vitas they sell, the more  diluted those fixed costs are over each unit.  If they don't sell enough Vitas it should be obvious they'd make a loss even if each unit was very profitable.

WOW.... desperate