Slashdot Log In
Breaking Down the Dropping Parts Cost for Sony's PS3
Posted by
timothy
on Tue Dec 30, 2008 02:31 PM
from the wait-until-it's-all-one-chip dept.
from the wait-until-it's-all-one-chip dept.
will_die writes "The people at iSuppli have taken apart an October 2008 version of the PlayStation 3 to create a bill of materials, along with providing a comparison to original PS3. The article provides information about the changes Sony has made. One of the big ones was that the hardware has gone from costing $690.23 to the current price of $448.73. This was done using a combination of removing parts (currently 2,820 vs. the original 4,048), cutting the cost of the CPU ($46.46 vs. $64.40), and cutting the cost of the graphics processor to $58.01 from $83.17."
Related Stories
This discussion has been archived.
No new comments can be posted.
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
Full
Abbreviated
Hidden
Loading... please wait.
Sony needs to... (Score:5, Insightful)
PS3 is being outsold by a good margin month to month, which means market share is dwindling (although objectively there are more PS3s in the world, which makes the equation for game developers shift) - and they seem to be losing developer mind share, as evidenced by the fact that there are few games that are PS3 exclusive. Most importantly and shockingly, Microsoft is getting Japanese game developers to come over to Xbox, where that model simply didn't exist in the PS2 days.
Sony needs about 4-5 more Metal Gear Solid like titles, and they really need to work out the bugs with online play. I don't use my PS3 online, but from what I am to understand, it's not even close to Xbox live.
Re:Sony needs to... (Score:5, Insightful)
They still need to make money.
If you sell at a loss you don't make it up in volume, you just create a larger loss. I am not sure why people in slashdot never think of this concept that a for profit company kinda needs to make profit. Selling at a loss doesn't create profit. Sony is better off trying to prove that the Play Station is worth the cost, vs. selling at a loss. Even if they don't make #1 seller for the PS 3 they will make money from their units sold. And perhaps the PS 4 can get back.
Parent
Re:Sony needs to... (Score:4, Insightful)
They can still make money by selling the console at a loss. They just need to sell enough PS3s to create a large enough market for games.
Parent
Re:Sony needs to... (Score:4, Insightful)
It is a myth that you can sell consoles for a large loss and make up for that in games. No console has ever had an attach rate high enough to take a $150 loss on each unit and still make money. This is not even factoring in shipping, support, development and operating expenses.
Parent
Re:Sony needs to... (Score:5, Insightful)
That is slightly modified for Sony and the PS3 as it pretty much won them the format war for HD video.
I don't know how you'd begin to calculate what that is/will be "worth" to them. Plus there are additional revenue streams these days (ie online purchases) that don't effect attach rate but could bring a lot of profit.
That said I think the Nintendo model makes a lot more sense.
Parent
Re: (Score:3, Insightful)
Yeah, it's a great business model.
Step 1) Sell product at more than it costs to make
Step 2) ????
Step 3) Profit!
Nintendo is run by amazing businessmen. :)
Correction on "bleeding edge" (Score:3, Insightful)
Actually, forget that.
The Gamecube WAS THE bleeding edge in its day. And it still managed to turn a profit. But I think it was 300$ at launch; I can't remember what the PS2 and Xbox were like.
Rather, what I meant, is that you can't go out and nab something crazy like bluray and put it in your designs. You have to put careful consideration and make sure everything works perfectly and won't cost too much, that way you can keep profits up.
Re:Sony needs to... (Score:4, Insightful)
Consoles are a tricky thing. If they sold every PS3 at a decent profit margin then very few would sell and that in turn would lead to less games being developed. My guess is that they have a curve of cost vs. sales price. Originally they sell them at a loss to get them out there with the understanding that over time their input costs will drop and they'll eventually be on the positive side of the curve. Look at the PS2. They sell for $100 now I think. I'd be curious to see how much one of those actually costs to make now. At this point their profit margin on a single PS2 is probably pretty high.
Parent
Re: (Score:3, Interesting)
Sony has virtually ALWAYS sold their consoles at a loss though. They're selling PS3 at a loss now, and they sold PS2 at a loss for most of the first part of it's lifespan. Selling the system at a loss and making that back up through game sales is nothing new, and has been pretty standard fare for Sony and MS for a while now.
Re: (Score:2)
Objectively? Are the numbers from VG Chartz [vgchartz.com] skewed?
Re:Sony needs to... (Score:5, Interesting)
What I'd like to know is the real install base of the three consoles. You know, not every Xbox360 sold is actually going to a new customer due to a so-called RROD phenomenon. Is there any good data to clear that up?
Parent
Re: (Score:2, Interesting)
I think the online part is more doable and more important for PS3 to compete. The 360 was better online to begin with, but since the update the PS3 is even further behind now.
It will be interesting to see if the games for PS3 start to really use that extra processing power. I feel that back in the sega nintendo days the first game was usually horrible compared to what developers were able to do after the system had been around a
Re: (Score:3)
I'd kill just to see better indy development for the PS3. All the best ones are going to the 360.
Lackluster online play for the PS3 is made up for by the fact that it appeals less to the teenage crowd who love the scream obscenities over the microphone because mom isn't listening at the moment. Not that the PS3 is completely devoid of teen angst, just has less of it.
Re:Sony needs to... (Score:4, Interesting)
The WSJ has the same take on the PS3. It is doomed. I am not so sure. Sony always plays to the big picture, is always, as the say in politics, on script. Sony has a lot of different interest, but what is interesting is that all these interests seem to play together, none of them go off script just because it might mean more profit in the unit. For instance, the MP3 players did not sweep the market due to the fact that Sony wanted to protect it's content interests and push the memory card standard. Some might call that a mistake, others might have said it would have been a mistake to stab other divisions in the back by doing otherwise.
So what has happened here. MS built a game console with very good games that they could sell relatively cheaply. Now, dollar for dollar it does not do so well as the WII, which it competes at the entry price level, is still selling more that the XBox. Wii sales doubled, Xbox relatively flat. To be clear, Wii sold twice as many units as XBox, and given street prices, many paid more for the Wii. OTOH, XBox games seems to be selling more. To make it cheap it did not include a big HD or a dvd drive. In effect, MS gave up the living room to save game console. But is likely not to even have the lions share of the game console market.
Sony used an integrated strategy. The built a more expensive console, but made it a complete unit, with blu ray. I think that many would agree that the blu ray decision was a factor in blu ray winning the format wars, and that this has long term strategic significance to Sony, most specifically in keeping the living room away from MS, who bet on HD DVD.
So Xbox likely has fewer consoles out there than Wii. Both are primed for streaming media, and not all XBox 360 are capable of playing stored movies, or at least not a lot of them. The PS3 is half in number, but each one is ready to play a new, expensive, and sometimes Sony generated blu ray disc. I think MS continues on it's way to win the battle but lose the war.
Parent
Re:Sony needs to... (Score:5, Interesting)
>I think that many would agree that the blu ray decision was a factor in blu ray winning the format wars, and that this has long term strategic significance to Sony, most specifically in keeping the living room away from MS, who bet on HD DVD.
As far as Microsoft's bet... Microsoft didn't bet anything_ on HD-DVD:
1) They just offered an add-on player and let their fanboys bet THEIR money on HD-DVD.
2) They threw a hundred mil or so at Toshiba. Toshiba lost a LOT of standing with consumers.
Toshiba's reputation sucks now... ask folks who bought last year's Walmart Toshiba HD-DVD players and all the movies they could. Funny how this debacle does not touch Microsoft any.
I don't think Microsoft wanted either format to gain critical mass - wide and early adoption is a threat to Microsoft's goal of 'services', including pay per view and digital downloads. Microsoft set HD video back by a year, that's all they got and that's all they wanted.
Parent
Re:Sony needs to... (Score:5, Informative)
I don't think Microsoft wanted either format to gain critical mass - wide and early adoption is a threat to Microsoft's goal of 'services', including pay per view and digital downloads. Microsoft set HD video back by a year, that's all they got and that's all they wanted.
I worked on the HD DVD team back then, and we manifestly wanted HD DVD to win, and we invested quite a lot in it. However, we didn't bet the Xbox 360 on it the way Sony bet the PS3 on BD (which appears to have been a good choice from the console business perspective). In the end, Sony was willing pay to whatever cost it took for BD to win.
Our interest was much more in delivering great video experiences than in which particular substrate thickness of polycarbonate imaged with a blue-violet laser won in the end.
This is a sample of what I've been working on these days:
http://smoothhd.com/ [smoothhd.com]
Still pre-beta, but I don't think that optical media will be the hard or the interesting part of HD video delivery much longer.
Parent
Re: (Score:3, Funny)
Yes, but M$ have been convicted in the European Court of HUMAN RIGHTS for having an unnatural monopoly over the intarwebs. Or something.
Re: (Score:3, Informative)
Microsoft developed the codecs used by *both* HD-DVD and Blu-Ray. Microsoft had no significant interest regarding which format took hold --- in either scenario, the players would be running Microsoft software. Microsoft's only interest was for the format war end quickly.
Oh, the codec side of things was relatively minor. We developed VC-1 and related tools, but have a patent position and a lot of involvement in H.264 as well, and that side of things always supported VC-1 on BD as well.
The bigger effort and team was focused on building the interactive players for the Toshiba and Xbox 360 players. The whole HDi layer was jointly developed by Microsoft and Disney.
As a XML markup + scripting code-behind, it was a lot like a subset of Silverlight, actually.
Re:Sony needs to... (Score:4, Informative)
Parent
Re:Sony needs to... (Score:5, Informative)
>Actually I just bought a brand new PS3 from Sony for $250.
I did the same exact thing last year for $299, got the 40GB model. I bought the PS3 mainly for the BluRay player.
I did not WANT a credit card out of the deal (even if it is a Chase card), but I read the fine print:
$100 off a PS3,
NO INTEREST 12 months..
AND no yearly card fee?
I paid off the PS3 early at 10 months, the card is blank, and soon to be canceled. I told others, but no one believed the terms and I know 3 people who paid full price anyways. Wacky..
Parent
Re:Sony needs to... (Score:5, Insightful)
Nope. It doesn't hurt your credit score.
There are things that do hurt your score, like riding your credit limit over 50% on all your cards, or flipping a card like this when it is your "only" card. With 2 other accounts 5-10 years old, this doesn't even blip. My credit is in the high 700s every year when I check.
Yeah, I saw this got marked troll. There's someone abusing the moderation system. /. digg/bury moderation system is very "cathedral".. some people get picked to moderate all the time, and I haven't been asked in maybe 5 years. Someone who gets picked often does not like me, and the irony is I've probably been a faithful Slashdot poster for longer than half of that moderator's life.
The
Parent
Re:Sony needs to... (Score:5, Insightful)
People keep saying this while the Wiis market share keeps growing. I know 3 families that got Wiis for Christmas. All of these families were in the anti-video game crowd. Everyone one of them seems to enjoy their Wii. One friend of mine was excited about it because his wife goes..."it's great we can download the old nintendo games, because new games are too complicated to play."
I have played games since I was a kid and it's easy to miss just how appealing the Wii and its lack of 'real games' is to an apparently large majority of people.
Parent
Re:Sony needs to... (Score:4, Insightful)
Luckily for Nintendo they've already made a decent product selling the Wii itself. They're making money faster than they can count it, and Wii's are selling just as quickly as they were two years ago (maybe even faster since availability is somewhat better) I don't think they care in the least if you buy an Xbox360 to sit next to your Wii.
Parent
Re:Sony needs to... (Score:5, Informative)
I bought a Wii the week they came out and I've got 14 game sitting on my shelf. I play what I find fun, not what gets all the buzz. After all, I'm the only one that can truly determine my happiness because if I let others determine it for me, well, they're living my life, I'm not living my own. So yeah, I see the commercials for "HypedGame 7 only on PS360!" and yawn. Big deal. Remember how cool Assassin's Creed was going to be? Or the hype of Heavenly Sword and how that was going to launch the PS3 into the lead for this generation? When was the last time either of those games were even mentioned? I haven't played either and, you know what, I didn't miss them. They were hyped, summarily beaten in hours, and forgotten by the hardcores.
It kinda reminds me of my EverCrack days, where the hardcore guilds would do everything they could to conquer the content as fast as possible, meaning devs were always working on new content to keep the hardcores happy, bugs went unfixed and the less hardcore raiders (not to mention the purely casual gamers) were completely ignored. It got to the point where most of the people playing the game never got to see even half the content in the game all to keep the hardcore junkies hooked and needing a fix.
Taking that back to the broader video game subject, the hardcore gamers are just moving from one big budget game to the next with very few really good games out there... and I think that's exactly the opposite of where we need to be. Yes, contemporary graphics are a good thing, but should as much effort go into rendering a rippled water reflection in a fountain that you're going to spend a half second running by as developers put into making the game actually fun, memorable and replayable? If I want perfect reality, I'll look out my window. I play games to have fun. And that... is what Nintendo is trying to tap into, making gmaes that are fun for a lot of people rather than a 30 second "gee whiz, look at that!" for a few people. And you know what? That's fine by me... which is why I'll stick with my Wii instead of getting caught up in the hype of the next XBox3 game.
Parent
Re:Sony needs to... (Score:4, Insightful)
Parent
Re:Sony needs to... (Score:4, Informative)
Parent
GPU down from $83.17 to $58.01 (Score:5, Informative)
Because the summary probably won't be fixed.
Summary gets GPU prices wrong (Score:3, Informative)
A new version of Nvidia Corp.'s Reality Synthesizer serves as the graphic processing unit for the game console. The revised version of the part is priced at $58.01, down 30.3 percent from $83.17 previously.
The summary has used the CPU prices as both. Seriously, even if you the submitter made an honest mistake writing it down, surely the editor should've noticed that both figures being the same was suspicious and double-checked? Is it really too much to ask for the slightest bit of editing?
Exchange Rates? (Score:3, Informative)
The article does not mention anything about exchange rates - since the PlayStation is not manufactured in the US and the article mention all amounts in dollars [the Yen strengthened considerably against the Dollar the last year or so] - I would take the amounts with a pinch of salt.
The other possibility of course is that they converted everything from Yen into Dollars - but did not mentioned it.
Re: (Score:3, Insightful)
A stronger Yen means they're making LESS Yen by selling at the same price USD.
If only Microsoft hadn't cut corners (Score:5, Interesting)
They wouldn't have had to spend over $1B on repairs and extend the warranty an extra 3 years for the XBox 360. Chances are, the 360 would be cutting a small profit by now. The moral of the story if the successor to the XBox 360 is to trounce Sony, is that they need to not cut corners if they want to exploit Sony's weakness. They'd better learn that because the PS3 is a very, very powerful system and when it hits $300 will be in the range that a lot of gamers will be willing to pay.
Re: (Score:3, Insightful)
Of course the 360 is doing better than PS3 largely because they got to market first and they've been able to price it cheaper. If Microsoft hadn't cut corners, they might not have made it to market first, and it would be more expensive than it is now.
So maybe the lesson is that if they want to beat Sony in the next generation, they'll have to cut corners then too.
Re:If only Microsoft hadn't cut corners (Score:5, Informative)
Hope that helps.
Parent
Re: (Score:3, Interesting)
After looking into this a bit, it seems MS was in a rush to get the console out a year before the PS3, they also made several last-minute decisions (mainly the HD) that got in the way of the cooling (which is what is causing the RROD), also when an engineer found the DVD Scratching issue they decided not to do anything (vs two fixes that would cost them $$)
Both issues have come back to haunt them, the cooling issue still causes RROD on even newer models, and the DVD Scratching issue as well is still around
Consistency Please! (Score:5, Insightful)
Unfortunately, not all these changes are good! (Score:5, Interesting)
I'm all for a cheaper PS3, which apparently can only happen with a bit of "wow" taken out of the box, but for a bit of history:
*The original 20 and 60 GB models of the PS3 supported full hardware backwards compatibility for the PS2 (with the notable exception of the Guitar Hero controllers). The 60GB had a lot of extras, like card slots.
*The 80GB unit without FULL backward compatibility still supports 80% of PS2 titles, and retains the memory card slots.
The way I see it, you shouldn't degrade a tech product over its life cycle, you should add features to it. Or failing that, it should get VERY cheap, and super small.
PS3 isn't doing either. I'm glad I own the 80GB model.
Re: (Score:3, Informative)
Sony has also removed SACD support from the newer models.
Not a big deal since the overlap of SACD listeners and game players is probably me. But I'm very happy to own a 60 GB model, I just hope that when (not if) it breaks Sony can repair it and I can keep my 99% compatibility and the multi-channel PCM output of my SACDs over HDMI (my old SACD player would only output SACD over the 5.1 analog jacks).
Re: (Score:2)
Re:Unfortunately, not all these changes are good! (Score:4, Insightful)
They're still releasing new PS2 games. If you go to Game Rankings right now, the top game on the main page is Persona 4 [gamerankings.com] for... Playstation 2.
This used to be a source of pride for Sony - look at how well we support our platform, we're still releasing top-quality games for it 8 years after it came out, and 2 years after it's "replacement" was released. According to good old Wikipedia, it's the top-selling console ever, at 140 million. Now they're actively removing that platform of games from their current product? Taking steps away from compatibility with it? Sure, eventually it will become less relevant, but I think it's gonna take a while. If we jump over to a DRM-related story, you'll find long threads complaining about "what happens if I buy this game, and 5 years from now their servers get shut down, or the company goes away? I still play my old computer games once in a while, I don't want them taking that away from me..." Forget Persona 4 just being released, aren't there people who will want to play Final Fantasy X or XII again? Kingdom Hearts? Gran Turismo 3 (wow, 14 million copies sold, really?).
Yes, as you say, we can just buy a PS 2, or keep an existing one. But there's plenty of reasons that's a pain (inputs, controllers, and space mostly) and it's just a big visible step backwards for the product. And cost alone doesn't justify that, the $240 cut isn't all from the Emotion Engine, and if you check the eBay listings for 60 Gig PS3s, you'll see how much of a premium their customers are willing to pay for that feature. I'm one of those people - and there's plenty of others in this thread - stuck between buying a new one and keeping my old PS2, buying an old one off eBay for a premium price, or waiting and hoping Sony steps up instead of down with a future revision. In the meantime, I'm one more customer not buying a PS3, even with their modest price cuts.
Parent
Is it really newsworthy? (Score:2)
While the part about needing to be $299 to compete was interesting (but it was in a comment), is this really newsworthy? Now, if the price of the parts went down and the price of the system DIDN'T go down, that might be more worth it. But how interesting is a news flash telling us that the price of electronic components has reduced in price over the last few years? Hmmm.
On the other hand, I did find the pricing interesting, as those prices are a lot cheaper than I get for my computer. I wonder if that'
Re: (Score:2)
If you bought parts for your computer in the scale of millions, you'd get them a hell of a lot cheaper...
Re: (Score:2)
I wonder if that's because computer parts are marked up more, or because the PS3 components aren't t as powerful (what a very relative, subjective, and non-descript word... sorry) as my computer components.
A combination most likely. If the GPUs and/or their boards are being custom made, then they might be able to leave things out that are required for computers. Also, they deal directly with the manufacturer whereas we deal with two layers in between. Finally, they purchase so many units that they surely get a bulk rate, especially since they can play the companies off of each other.
Sony is making money... (Score:2)
in Europe. If a PS3 costs them $448.73 (317,48â) to make, that means they make almost 80,00â for every console sold in the EU (they sell for 399,00â). A price drop *could* be possible here in the old continent.
Any way you slice it.... (Score:2)
No matter how you look at the numbers, PS3 lost, even before it came out. I know people who gotten the PS3 just as a Blu-Ray player, simply because they were cheaper than stand-alone Blu-Ray players at the time, and they have not gotten any games for it. Of course now that stand-alone Blu-Ray players are actually cheaper than PS3s, that market share is no longer there either.
They need to drop the price point to be just slightly above the average Blu-Ray player to be competitive, I think. Which will never ha
Re:asdf (Score:4, Funny)
cutting the cost of the CPU ($46.46 vs. $64.40), and cutting the cost of the graphic processor to $46.46 from $64.40.
Whoa, so the Cell processor IS the graphics processor? Yo dawg, I heard you like to compute so I put a processor in your processor!
Parent
Re:asdf (Score:5, Interesting)
It's good at doing anything where there's a streaming data
When we discussed the Cell processor in my super computing class, the verdict was it required streaming data to be fully utilized since each of the SPUs each had too little cache.
Perhaps it would have been wiser to instead only have 3 SPUs (+1 PPU) with a little more power and caching each instead of the 7 SPUs. As it stands, it is a problem that is stumping many PhDs.
Parent
Re:asdf (Score:5, Interesting)
The trick isn't to use each SPU. The trick is to fully use the SPU and not have it waiting for memory look-ups or core-to-core communication.
Parent
Re:lame (Score:5, Funny)
Sorry Bobtree.
Parent
Re: (Score:3, Funny)
Re: (Score:3, Insightful)
Honestly, it was never an issue of price.
I would buy a PS3 in a heartbeat if I knew what I know now.
For one thing, I can use it as a media center, with the help of TVersity. I can play DVDs, blu-rays, upload my pictures, etc.
The games are pretty awesome from what I've bought. I've bought several games from the PSN as well, and they've all been fun. And in the winter time, it helps to keep my room warm!