Sorry Trent, but you started it by asserting $700. Even when Blu Laser diodes were as rare as hen's teeth, Cell & RSX yields were poor and the PS3 was just rolling off the production, iSuppli guestimated the PS3 cost $805. Since then blue laser diode prices have fallen through the floor and yields of Cell and RSX and other parts have improved substantially. Back in 2006 they were talking of 10-20% initial yields on Cell. If that were now 60% (still a very conservative figure), that means they cost 1/3 what they did, on top of which die sizes are smaller meaning even further savings. And Sony have been aggressively pushing through cost saving measures such as moving from 90nm to 65nm to 45nm meaning more chips per wafer as well as simplifying the internals such as removing BC hardware.
I see no reason to believe the PS3 isn't selling at or very close to break even point already. Especially when Sony have said as much in past statements and independent analysts support those views.
Certainly profits on consoles come from games more than they do hardware, but that doesn't mean any console maker likes selling their hardware for a loss. And they work very hard to ensure that they don't even if they might at the beginning of the console's life time.
As for Panasonic's $700 MSRP. The clue is in the MSRP. It doesn't cost them that much to make, and indeed I expect you'll see those players go for $500 by Christmas with Pansonic still enjoying a profit.
Reader Comments (Page 1 of 1)
DrXym @ Jun 11th 2008 5:56PM
Sorry Trent, but you started it by asserting $700. Even when Blu Laser diodes were as rare as hen's teeth, Cell & RSX yields were poor and the PS3 was just rolling off the production, iSuppli guestimated the PS3 cost $805. Since then blue laser diode prices have fallen through the floor and yields of Cell and RSX and other parts have improved substantially. Back in 2006 they were talking of 10-20% initial yields on Cell. If that were now 60% (still a very conservative figure), that means they cost 1/3 what they did, on top of which die sizes are smaller meaning even further savings. And Sony have been aggressively pushing through cost saving measures such as moving from 90nm to 65nm to 45nm meaning more chips per wafer as well as simplifying the internals such as removing BC hardware.
I see no reason to believe the PS3 isn't selling at or very close to break even point already. Especially when Sony have said as much in past statements and independent analysts support those views.
Certainly profits on consoles come from games more than they do hardware, but that doesn't mean any console maker likes selling their hardware for a loss. And they work very hard to ensure that they don't even if they might at the beginning of the console's life time.
As for Panasonic's $700 MSRP. The clue is in the MSRP. It doesn't cost them that much to make, and indeed I expect you'll see those players go for $500 by Christmas with Pansonic still enjoying a profit.