PS3 Fanboy

The PS3 seems like a complicated piece of machinery. It's get a very specialized processor and a blu-ray drive. Even after trimming the fat, I'd expect an expensive piece of hardware. I don't know if $399 would be above manufacturing cost...

First?

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Yep.

The ps3 is a very sofisticated piece of hardwar and I think it is worth the price 600 (500 now) I think used ones could be cheeper (but it will be hard to find them) then the price it takes to make it.

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wait wait, so SOny isn't going into bankrupcy because of PS3 like some of the xbots and Nintendo lovers claimed? wow, that's a relief. ;)

just wait until Spidy and Pirates come out on Blu-Ray exclusively, then we will see HD-DVD dies.

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CNNMoney cited the TV operations as one of Sony's weak spots. I just bought one though and I love it. Prices are dropping right now because they're about to release next year's lineup.

http://money.cnn.com/2007/07/26/news/international/bc.sony.results.reut/index.htm

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Well i read an article that the Gamecube cost just £10 ($20) per machine to make, and in the beginning, in the UK, they were selling for £130, that's a huge profit , so i would say the PS3 only costs about £50 to make each one, thats with the Blu Ray player being the most expensive. That's how companies work. By making things on the cheap and selling to the public at a greater price. You don't believe Microsoft is one of the most wealthy companies because they sell things at reasonable prices, do you?

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when sony wins the format war it will be easy sailing for sony. hahahaha a 360 blu ray player hahahaha how are the people who bought that joke of a side kick gonna feel. i guess sony should of shoved a peice of garbage out there if people are gonna complain about the caust. meening include the cell and rsx and drop the blu ray player(wtf thats just looks like another 360 with a new shell).Sony dont drop your price. real gamers will pay the price for quality games.

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"However, even with the losses, Sony acknowledges that compared to this time last year, profits from the PS3 selling are up 60%."

The PS3 wasn't even for sale this time last year. Or am I not reading this correctly?

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Hirsbrunner
I had the exact same thought.

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@ Hirsbrunner & BangBang -- I think what Sony meant by that statement was in regards to fiscal years, which are a bit different. If you think of it that way, there have been almost 5 months of PS3 sales for last fiscal year and nearing 4 months for this fiscal year. It's loose logic at best, but comparing those two fiscal years is probably what they were trying to do.

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#5, the PS3 costs much more than $100 to manufacture. Just trust me.

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@5

Microsoft makes all their money on software such as Windows and Office. Their games division still isn't profitable after all its years in business (though I think they expect to become profitable this year).

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PS3 has the most margin for cost reductions.. Wii is the last since it is based on old technology to begin with. Over time, PS3 will see more price drops than Wii or 360.

The cost reductions in the blue laser diode alone must be worthwhile.. not to mention the cell and entire bd drive.

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I don't know if this is correct, but I heard the Blue Ray component of the PS3 itself cost around 200 dollars to manufacture in the begining, but costs have lowered since then. The 800 dollar mark sounds realistic to me.

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I don't know if this is correct, but I heard the Blue Ray component of the PS3 itself cost around 200 dollars to manufacture in the begining, but costs have lowered since then. The 800 dollar mark sounds realistic to me.

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its called a loss leader. you sell the item at a loss to sell other stuff at a profit. Like Games, HD TV's, Blue ray DVD's, Blue diode lasers (when blu-ray wins). It's like free cell phones only without the guarentee of a contract. Console makers make alot of money but take a big risk in the beginning. Thats why so many fail.

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sony's blu diodes went from $42 a piece to manufacture to $8 a piece in june

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The estimates in regards to cost of PS3 production are ridiculous. They are based on the bulk prices for the parts inside the machine if you were to buy them as a company. However they don't take into account that Sony actually manufacture many parts themselves, so they aren't charging themselves those prices.

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@19: You are correct in saying that some parts that Sony manufactures it doesn't have to source, but they still have value and still cost money to make. Blu-ray diodes don't grow on trees even if you own the orchard.

Think of it this way. Let's say that Ford owns BF Goodrich. They don't get free tires to put on Ford vehicles. They *do* get a significant discount or some shuffling with accounting to save cash.

Sony is a massive company with many divisions but they still have to buy tires like everyone else.

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I'd put the cost of the PS3 (Sony's cost) to be in the $550-600 range. The $800 figure is almost a year old, and since then we know costs have been reduced on the BluRay drive (big time), the motherboard, and backwards compatibility.

My guess is that Sony feels comfortable taking a $50 loss on sales during the first year knowing they will make their money back on games. With the 65nm migration, they probably feel like they can get costs down to the $450 range which opens the possibility of a $399 sku.

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In other parts of the world Sony has been making a profit since the launch ($850+ in Europe), especially considering that the European versions already had many cost-cutting measures in place (no EE chip for example).

Also, the 65nm Cell which is now in production is probably already in the 80GB SKU, BD-ROM drive costs have already been massively reduced (You can already buy a retail BD-ROM/CDRW PC combo drive for £150), and other costs like physical assembly efficiency will be improved month by month, all driving down costs.

Overall, combined with the drop in component costs, it's fairly safe to say that it probably evens itself out at worst, or makes a pretty decent profit at best.

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