At the very beginning of the console’s life cycle, it was pegged as a loss leader for Sony. This original assessment was further confirmed by the research firm iSuppli, who are famous for “teardowns” for consumer electronics. By an original estimate in November 2006, the 60GB PlayStation 3 cost Sony $840 to build while only selling for $599.
As manufacturing processes and technology improve, the cost of construction also diminished. However, iSuppli has recently updated its estimates for the actual cost of the PlayStation 3 reports that it costs Sony $448 to build the 80GB PlayStation 3 while its MSRP is currently $399.
Sony has been selling its lead console at a loss now for two years, and according to iSuppli, it may finally reach the break even point in 2009. One of the key differences iSuppli found in its latest teardown of the PlayStation 3 is that Sony has been switching to integrated solutions for its chipsets; by iSuppli’s estimates, this amounts to a 30 percent reduction in parts used from the first generation of the console.
Overall, as the main component chips such as the Cell Processor and the Nvidia GPU come down in price, so do the total cost of the console. Analysis also noted that power consumption was lower across the board on the latest hardware revisions of the PlayStation 3, which results in a greener PlayStation experience.
Whether or not the continued decline in manufacturing costs will translate to a lower MSRP for consumers is unknown. Sony has gone on record to say that there will be no price cuts on any model of the Playstation 3. Current rumors are that prices cuts may be coming for Europe in March 2009, which Sony declined to confirm.
The PlayStation 3 has been a steady, but not stellar, performer for Sony during this generation of gaming consoles. It’s currently placed last in the console race but is far from being lost. Sony originally envisioned the PlayStation 3 as a gaming console that was built for the future, and it was to last for the next ten years (according to the keynote speech given by Ken Kutaragi at the 2006 TGS).