Azzanation said:
Its pretty obvious the 360 was more profitable. Lets start with these examples.
1) X360 was cheaper to produce and in RnD.
PS3 cost $805 to build
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That is complete and utter bullshit. I can say that with absolute authority because I learned, and happened to see things (during my PhD thesis time which was directly correlated with Blu-ray development) noone here had likely seen during the development of that technology cycle. So here is the short rundown:
PS3 development was loadad with development costs of the Blu-ray drive. Nobody within Sony had the money/the drive to fund development of this technology. Sony at that time was a pretty disfunctional company, it basically was every division against every other division. Ken Kutaragi didn't help at all there, he was a brilliant engineer but a lousy economist (not my words). As a rough guess, PS3 development was loaded with a) $1b cost to develop the blue laser diode to a mass manufacturing product. That was a remarkable feat, actually. I remember when someone stormed into our lab, yelling that a blue diode had been working for a full second! (in liquid nitrogen, I think) b) Building manufacturing plant(s) for the diodes (and Cell to a lesser extent), another cool $1b. c) Patent costs (unknown $, but very high). d) also, unbenownst to seemingly everyone as it went under the radar, the console department was d) loaded with a high restructuring/winding down bill (somewhere between $0.5-1b) for the laptop/pc segment. e) Cost of the Cell development. Other than what people think, those costs were relatively small for Sony (and lilely also for Samsung), as IBM carried the brunt of those $0.5b.
All in all, the PS3 started about $3-4b in the hole, before the first console parts even entered the assembly plants. This can, of course, be naively added to the manufacturing costs of the PS3 consoles produced. The real cost of manufacturing a PS3 was, of course, lower than the manufacturing cost of a X360. As a generic manufacturer of all things that run on electricity, Sony has high leverage over MS with manufacturers (and engineers with lightyears of experience. Sony consoles are simply better designed than MS consoles, if manufacturing costs are considered).
Last edited by drkohler - on 25 July 2018