Sony Losing $250-$300 Per PS3

Gamers have often complained about the expensive pricing of the PS3 models, but consider the next gen console a bargain. In a recent parts-cost breakdown of the PS3, researchers have estimated that Sony is losing approximately $300 for each entry level PS3 it sells and $241 for the deluxe version. The retail price of the entry level PS3 and its more expensive cousin are $499 and $599, respectively. In comparison, Microsoft,s Xbox 360, released last year November, was priced at a per unit loss of only $127.

While it has been historically shown that newly launched game machines are sold initially at a loss, iSuppli said that in the case of the PS3, that it was "remarkable, even for the video-game console business."

The reason for the expensive production costs of the PS3 is due to its cutting edge technology. iSuppli, an electronics supply business, tore down the PS3 and priced out each component. Andrew Rassweiler, who acts as senior analyst for the company remarked, “If someone had shown me the PlayStation 3 motherboard from afar without telling me what it was, I would have assumed it was for a network switch or an enterprise server. To give an example of how cutting-edge the design is, in the entire history of the iSuppli Teardown Analysis team, we have seen only three semiconductors with 1,200 or more pins. The PlayStation 3 has three such semiconductors all by itself.”

Rassweiler concluded by saying the PS3 is a machine that is top notch in its construction and quality. “There is nothing cheap about the PlayStation 3 design. This is not an adapted PC design. Even beyond the major chips in the PlayStation 3, the other components seem to also be expensive and somewhat exotic."

Sony, which has been long embattled with criticism of the high price points of the PS3, has tried relentlessly to get this very same message across, as stated by Rassweiler. However, the Sony marketing team and PR department have been less than effective in their campaign to educate the public regarding the quality of the PS3. With the launch of Sony,s next gen game console upon us, good word of mouth advertising by early adopters of the machine may do what Sony has had difficulty doing…to promote the PS3 as a superior game console.


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Author: GamerNode Staff View all posts by

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