I see a lot of people mentioning things about when Sony is able to lower production cost and offer the PS3 at $400, $300, and even $200 in some cases.
My question is, what kinds of things are we basing this lowered production cost on? I mean if they were losing money at $600 at launch, it seems a bit of a stretch to think they can get down to half or a third of that price within the next 2-3 years.
Normally lowering production costs happens over time as the hardware becomes older and there is better stuff out there. But with the PS3 it has a fairly propriatary processor setup and that makes me think it is going to be more difficult. In general I think the price will most certainly drop to the levels people are saying, but I am not sure about the time frame and it seems most of the people who say this type of thing usually phrase it as though they are fairly uncertain as well.
So I guess I am trying to get an idea of what the price cut path will look like. I am going to make a model, and please feel free to add input. I am unsure how valid this type of model is but it should be interesting regardless.
So I guess lets start by looking at the PS2 and see how its price has dropped...
(Source: Wikipedia)
North America Price History
For the PS2 it took 19 months for a $100 price drop, then 1 year later they announced a "temporary" $20 price drop...3 months after the temporary price drop it was made a permanent price drop. Then a year after the $20 price drop they gave a $30 price drop. Then a little over a year later we got one last $20 price drop. If we apply this same price drop scheme to the PS3 by dropping the price of the PS3 similar percentages of the original price it would look like this....
Projected NA PS3 Price History Base on NA PS2 Price History
- US$599.99 (November 17, 2006, release date)
- US$399.99 (June 5, 2008)
- US$359.99 (June 4, 2009)
- US$299.99 (June 2, 2010)
- US$259.99 (July 11, 2011)
Now I am not trying to use this to say that this is the path the PS3 is going to take, I am just using it to get an idea of about how long it will take to get in the area of $400, $300, $200, etc... The PS2 was a very different machine when it came to sales numbers, but I do think that these price cuts give an idea of what kind of reduction in production costs are possible in a given timeframe.