KillZone 2's development costs. 40m. Release date: 2007

Uncharted Drakes Fortune dev cost. 20m release date: Nov. 2007

warhawk. dev cost 20m. release date. August 27th,2007.

Sure we dont know titles... we know a bunch of titles as well as the 13 un named titles still to be released by Sony. Its mostly all dev costs. Some marketing for the games closer to being finished but otherwise none.  

Ok, lets take about the production costs.

Heres my first "Source": http://globaltechforum.eiu.com/index.asp?layout=rich_story&channelid=3&categoryid=9&title=Sony+has+work+cut+out+to+recoup+PS3+costs&doc_id=10771

First Quote:

"Merrill Lynch has estimated the PS3 cost $900 to produce when it launched; its price tag for the 60 gigabyte version is $599 in the US.

The biggest costs are represented by the powerful Cell microprocessor, estimated to cost $230 each, and in the Blu-ray disc player, which is thought to cost $350 per console."

 Hmmm so the 350$ for a blue ray disk player are now about what? Be my guest at guesing, I say 100 $.

Second Quote: 

"Within three years, the production cost of each PS3 is estimated to decline to $320, according to Merrill Lynch, and analysts expect Sony to slash PS3 prices by at least $100 during the crucial Christmas sales period this year. "

Well he has his 100$ right know, but he is saying at least. By the way, there source is THE FINANCIAL TIMES so, we have at least to consider they are right at some point.

The 80 gig model has most likley no EE (which makes 30 $ less for EE+ RAM) and a new motherboard (20 $ less, i read somewhere (European version)).  The Cell should have gone down in production by another 10$ right know (even more if IBM already producing them or they have hit 65 nm). Also at the start they had huge problems to produce that thing, they are know gone. I say, they released the PS3 at least 3 month earlier that they should in term of good production. I know some of you will say that this is a bogus guess, but i say that means at least another 40 $ cost down. 

 So my gues of production costs of the 80 gig model:

So my guess is, it costs about 570$ to produce the 80 gig PS3 at the moment.

 Keep in mind, that it does not mean they making profit with it. Some here question why Sony's gaming devision still operates at loss. 

 Well, these PS3 don't ship for free, the advertisements aren't for free, the people working for Sony to sell these PS3 aren't for free and the hole logistic isn't for free and the shop owner want at least something to sell a PS3 and there is maybe also a tariff you have to pay.

I think you need at least 50$/console to get all that stuff paid (I think its more about 75$ with the selling rate right know) to break even.

So the production cost is most likely under 600$ right know, but production cost is not all the cost, there is more.

Its simply NOT possible to produce that machine for $499 now or drop the costs from $850 to below $500 in such a short term. Otherwise its only a daydreamer's daydream.

Of course Sony can cut the price and be profitable. Take all those PS3's that were built last year and are still sitting on shelves, the loss was taken last year and while sitting on store shelves they earn nothing. Now Sony cuts the price to $500 and presumably those PS3's will sell, instant $500 profit (in this year's terms at least).

More realistically, the initial cost estimates could be including reasearch and development cost and Sony is simply not counting that now. I seriously doubt Sony has made enough selling PS3's to cover cost of production, distribution, and marketing, much less the research and development costs. At any rate, PR is as PR does.

The Blu-Ray drive costs was the problem in the first place.  It was estimated last year, that the Blu-Ray drive would cost as much as $350 alone.  Now it looks like this cost will be reduced by at least $100 and will continue to fall when more production costs are reduced and more sales.

I think we all jumped aboard the bandwagon with regards to Sony losing at least $200 on each PS3 sold....well when you sit back and think about it though.  Until last week the PS3 was $599 in the US, but in Japan, the 20Gb PS3 is retailing for just over $400, so going on this information, Sony were selling the PS3 for half the amount it costs them to make it.

It certainly does seem more plausible that they have reduced costs significantly with the Blu-Ray diodes problem being fixed and the removal of the Emotion engine to be making a profit on each unit sold at $599, whether it is a $10 or $100 profit.

With the price reduction by $100, this says to me that they may not be making much of a profit if any at all now, but I seriously doubt they were making a big loss, or they wouldn't have reduced the price just yet. 

+$100 to get ONLY an additional 20gigs is NOT worth it.

Sorry, Sony, but you're freaking insane.

Are we to believe that these games won't make ANY money before March 2008? That's the question. Unless each and every game doesn't make ONE PENNY, then you can say almost all the money is lost on game development. Otherwise, profitability is slipping through their fingers.

And, thanks for another breakdown, Just_Ben. If it costs them about 570 to make the 80, it's ONLY being sold in one place ... Korea. All the 60GBs and 20GBs being sold are at a loss, except maybe the 60GB in EU since they removed the EE and are charging a premium for the system.

 Well, that was just a "wild guess". But yes the 60 and 20 gigs are sold at a loss (the 60 gig at least at $499 - $599 im not sooo sure, the loss won't be that big at the end, i think). So much people sayed here otherwise? I don't think the 60 GB (At least with the same hardware like know) will not be sold for long. I think they just wan't to sell of the stock on hand.

Apparently in an interview on CNN, Jack Tretton got torn to pieces so to speak in issues dealing with why the PS3 needed a price cut so soon and where was the money going. He refused to adress any issues of money or production and it was a pretty sad scene.

Awww, poor Jack :D