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PlayStation (Games) The Almighty Buck Hardware Entertainment Games

Breaking Down the Dropping Parts Cost for Sony's PS3 302

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."
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Breaking Down the Dropping Parts Cost for Sony's PS3

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  • Sony needs to... (Score:5, Insightful)

    by GPLDAN ( 732269 ) on Tuesday December 30, 2008 @03:37PM (#26270503)
    It still precludes them from selling at $299, which is where marketing data is suggesting they need to go to compete against Xbox.

    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.
  • by camperdave ( 969942 ) on Tuesday December 30, 2008 @03:49PM (#26270659) Journal
    Keep all the price comparisons either from-to or all to-from. Don't mix the two because you'll confuse people (eg me). When I saw "...the hardware has gone from costing $690.23 to the current price of $448.73." it triggered me to read the last sentence as "cutting the cost of the graphic processor from $46.46 to $64.40.". I thought I was seeing some sort of Orwellian finances in effect.
  • by jellomizer ( 103300 ) on Tuesday December 30, 2008 @03:50PM (#26270675)

    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.

  • by repvik ( 96666 ) on Tuesday December 30, 2008 @03:57PM (#26270769)

    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.

  • by tilandal ( 1004811 ) on Tuesday December 30, 2008 @04:20PM (#26271055)

    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.

  • by Chuck Chunder ( 21021 ) on Tuesday December 30, 2008 @04:41PM (#26271361) Homepage Journal

    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.

  • by EastCoastSurfer ( 310758 ) on Tuesday December 30, 2008 @04:47PM (#26271443)

    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.

  • by EastCoastSurfer ( 310758 ) on Tuesday December 30, 2008 @04:53PM (#26271549)

    even the Wii will probably fall short unless it gets real games.

    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.

  • by Anonymous Coward on Tuesday December 30, 2008 @04:55PM (#26271601)

    [...] even the Wii will probably fall short unless it gets real games.

    You clearly understand the Wii market... not.

  • Re:Exchange Rates? (Score:3, Insightful)

    by StikyPad ( 445176 ) on Tuesday December 30, 2008 @04:55PM (#26271603) Homepage

    A stronger Yen means they're making LESS Yen by selling at the same price USD.

  • No Sony for me (Score:1, Insightful)

    by Anonymous Coward on Tuesday December 30, 2008 @05:16PM (#26271969)

    Sony angered me with their whole DRM-trojan-on-music-cd's fiasco. I have not forgotten. If I am ever going to buy a sony product again, there must be a seriously compelling reason.

    The PS3 includes an expensive blue-ray player. It is worthless to me. I expect it is equally worthless to most people who are considering buying a PS3. If they want to lower their hardware costs, they should just get rid of that.

    Instead, they lowered hardware costs by removing the hardware emulation for the ps2. As I understand, that means that the latest ps3's won't play the old games. That is no good, as I like some of the old games and want to play them.

    The xbox 360, aside from being cheaper, and from supporting all the games I want to play (especially including the big releases), is fully backwards compatible. It provides better value all around.

    If Sony wants to compete against that, they need to do it by getting rid of the stuff people don't care about and keeping the stuff people do care about. And they also need to get that chip off their shoulder....the antics they pulled (limiting supply so they could say "we sold out already!" to try and make people think it was more popular than it was....public statements like "if you can find a ps3 that has been on a store shelf for more than five minutes, I will pay over a thousand dollars for it!" which were obviously bogus to everyone who wandered into a best buy) reflect a marketing strategy built entirely on arrogance and utterly doomed to failure.

  • by nine-times ( 778537 ) <> on Tuesday December 30, 2008 @05:26PM (#26272155) Homepage

    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.

  • by Geoff-with-a-G ( 762688 ) on Tuesday December 30, 2008 @05:38PM (#26272297)

    1. In the next year, PS2 will become less relevant than it currently is. At some point, nobody will care if it can play PS2 games.
    2. They cut the hardware price by $241.50. The cost of a new PS2 is $129. The money saved could almost by two PS2s.

    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 [] 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.

  • by DiarmuidBourke ( 910868 ) on Tuesday December 30, 2008 @05:45PM (#26272399)

    You mean a "PC"?

  • by dave562 ( 969951 ) on Tuesday December 30, 2008 @06:11PM (#26272783) Journal
    At this point in the life of the Metal Gear series, most of the people who are playing the game for the story. They are playing for those long, drawn out cut scenes. They aren't buying a video game, so much as they are buying a movie that they get to control a part of. Grand Theft Auto is very similar. They seem to have focused primarily on the story. I'm really disappointed with the lack of challenge/difficulty in GTA IV. They have either made the game much easier, or it's just much easier since I stopped smoking pot. It's probably a combination of the two. From a storyline point of view though, GTA IV is really good. On the PS3 the game world is absolutely amazing. The weather, the lighting, the sound, the physics, everything. The game is so detailed that if you are listening to the radio when your cell phone rings, it makes that buzzing sound a second before it rings.. just like if you have your real cell phone too close unshielded PC speaker wires.
  • by cowscows ( 103644 ) on Tuesday December 30, 2008 @06:13PM (#26272811) Journal

    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.

  • More games... (Score:2, Insightful)

    by MaWeiTao ( 908546 ) on Tuesday December 30, 2008 @06:22PM (#26272911)

    I just got an 80GB PS3 for Xmas. It's a bit shocking to compare this version to previous ones and notice what's been cut. To be honest, however, this is the version Sony should have released from the start because what was cut I consider largely superfluous for the PS3's primary purpose which is playing games.

    I can only imagine that some higher ups at Sony had this unrealistic vision that both the PSP and PS3 were going to be complete entertainment and information centers to replace everything else. Things didn't work out with the PSP, so even though Sony executives might have been aware of those issues before the release of the PS3 it was too late to address them. And some probably continued to insist it would be a success.

    But ultimately, the real problem with the PS3, I don't think, is the price of the system. Well, it may be now with the economy, but I think the real problem still is the lack of good games. There seems to be a never-ending stream of games promised to be great and which turn out to be mediocre. There's an overall lack of variety, and in some genres there aren't more than an handful of games available.

    I encountered this upon trying to decide what I wanted to get for my PS3. There's not a huge selection outside of shooters, sports and a number of racing games. And an even bigger problem is the fact that most games are cross-platform which largely renders the PS3 irrelevant given the Xbox360s install base. I bought four games and that's pretty much all I'm interested in getting at this point.

    Sony needs to get more exclusives, which is going to be difficult, but there already exist a number of exclusives in Japan that are unavailable in the US. I'm not sure who are the decision makers that don't bring to the US potentially interesting games. If nothing else it would create more options for players here. And perhaps it might help move the market away from the more adult crowd the PS3 currently seems to attract.

    On a side note, my PS3 is quite quiet. I hear the harddrive going more than I hear the fan itself. And the system seems to run cool. Of course we're entering winter, so it may be a different story in the summer.

  • by binarylarry ( 1338699 ) on Tuesday December 30, 2008 @07:47PM (#26273775)

    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. :)

  • Re:asdf (Score:2, Insightful)

    by virtue3 ( 888450 ) on Tuesday December 30, 2008 @07:49PM (#26273787)

    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.

    Which is definitely not a "no problem" kind of situation. Look at the list of canceled PS3 games, heck, even EA had issues getting red alert 3 onto it! It is not a simple nor easy setup. Anyone that has any experience threading systems could tell you that, especially across asymmetric cores!

  • by Sleepy ( 4551 ) on Tuesday December 30, 2008 @08:33PM (#26274143) Homepage

    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.
    The /. 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.

  • by Jorophose ( 1062218 ) on Tuesday December 30, 2008 @08:37PM (#26274165)

    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.

  • by Renraku ( 518261 ) on Wednesday December 31, 2008 @12:46AM (#26276503) Homepage

    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!

  • by Anonymous Coward on Wednesday December 31, 2008 @02:14AM (#26277087)

    This is a sample of what I've been working on these days: []

    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.

    Get rid of silverlight and I will view it... I refuse to install that crap.. just MS latest attempt to control the web.

Solutions are obvious if one only has the optical power to observe them over the horizon. -- K.A. Arsdall