During a recent conference call for global investors following Sony’s first quarter results Sony Corporation CEO and Executive Vice President Nobuyuki Oneda revealed that PS3 manufacturing costs have dropped by 70%<\/p>\n
“The cost reduction since we introduced the PS3 is very substantial and this is on schedule, we don’t disclose how much of the PS3, specifically the cost deduction was achieved during the past two years. But that is on schedule.”<\/p>\n
Initial production costs for the PS3 upon its release in 2006 were estimated to be $805.85 (R5834) for the 20GB model and $840.35 (R6081) for the 60GB model. They were priced at $499 (R3612) and $599 (R4336), meaning that each unit sold at a rough loss of $250 (R1810)*. As a result Sony’s Games division ran at a loss of $1.97 billion for the fiscal year.<\/p>\n
Since then Sony has come some way towards reducing production costs. Some of these measures can be attributed to the phasing out of the Emotion chipset, falling hardware costs in 65nm cell microprocessor and a reduction in basic components on the original model such as the number of USB ports available.<\/p>\n
In January 2008 it was widely estimated that the PS3 cost $400 (R2896) to manufacture. If the figures are correct then this would mean that Sony’s PS3 production cost today would sit at roughly $240 (R1920), making it a profitable entity given that it retails for roughly R4800 locally.<\/p>\n
This means Sony Computer Entertainment CEO Kaz Hirai’s prediction that the console would start making profit by early 2009 is right on the money.<\/p>\n
In addition the drastic manufacturing cost productions may also pave the way for a long awaited and hotly debated PS3 price cut as well as the introduction of the PS3 Slim. Although Sony has not yet officially confirmed the Slims existence images showing a thinner more compact console have been circulating the internet for some months now.<\/p>\n
Overall Sony’s shrewd cost cutting and secretive developments (which only add further fuel to the rumours) may find them well placed to recover initial losses on the PS3 as well as overtake Microsoft as the top seller in the high-end console market.<\/p>\n
*All calculations based on November 2006 Rand\/Dollar exchange rates<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" May give some breathing room for PS3 price cut rumours<\/p>\n","protected":false},"author":161,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[11681],"tags":[],"class_list":["post-4211","post","type-post","status-publish","format-standard","hentry","category-playstation"],"_links":{"self":[{"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/posts\/4211","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/users\/161"}],"replies":[{"embeddable":true,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/comments?post=4211"}],"version-history":[{"count":0,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/posts\/4211\/revisions"}],"wp:attachment":[{"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/media?parent=4211"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/categories?post=4211"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/tags?post=4211"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}