PS3 Fanboy

It's well known that Sony's latest console is a powerful, expensive piece of tech. When Sony launched the PS3, it lost over $200 on every unit sold -- in spite of its $600 price point. However, over time Sony has been able to reduce the costs of manufacturing the system, by removing PS2 compatibility and switching over to a more efficient 65-nanometer chips.

iSuppli, the company which broke down the PS3 at launch, estimated the cost of making a PS3 was more than $840. Now, they say the PS3 costs 53% less to make -- at around $445, for a system which sells at $400. Sony is still losing money on each system sold, but in a much less extraordinary way.

Not only are the individual components cheaper to make, there are simply less things inside a modern PS3. According to iSuppli, the number of parts inside a PS3 has fallen from 4,048 to only 2,820. Since launch, Sony has reworked the innards of the PS3 to include combined chips. The falling price of components also helps Sony a lot: the Cell processor cost $89 at launch, but now only costs $46 to make.

Sony should be able to break even with the PS3 starting in 2009, which makes us wonder if they'll start adopting a more aggressive price strategy late next year. We hope so -- they need a way to make themselves attractive to customers, without breaking the bank.

[Via PlayStation Forums]

iSuppli (makers of iAnalyze) has determined PS3 to be the victor of the current "console war." There are millions of Wii owners right now, and many will likely want to upgrade to a new system in a few years time. 2008 is already being hailed as the PS3's big turnaround; Wii owners will look to it as their second console of choice.

This is in part due to their assumption that Sony will slash the price of the PS3 again this year to entice the Wii audience. Blu-ray dominance also plays a part in this, they say. Mix in some AAA titles as well as the variety of pick up and play titles on the PSN, we'd say that there will be a big jump in PS3 sales, too. But whether or not it's due to the Wii audience seeking a more powerful console is anyone's guess. We'll just say it's because the PS3 will rock this entire year.

[Via GameDaily]

Market research firm iSuppli, noted for their component breakdown comparisons, has concluded that the PS3 will post the strongest growth in 2008. Unsurprising, considering the position PS3 was in 2007. However, one look at the NPD figures from January shows that PS3 sales have started to gain some traction. More surprising is their prediction PS3 will get into the lead position in 2011.

This year, they say the PS3 should sell about 10 million consoles, compared to the 360's projected estimate of 7.5 million and the Wii's 12.2 million. Remember they said the strongest growth, not the most consoles sold. But, this prediction agrees with EA's figures that PS3 will outsell Xbox 360 this year. In 2011, they said the PS3 will lead the market with 38.4 million units. It would be a first place victory, but by a much narrower margin than Sony had experienced with PS1 and PS2.

The recent announcement of increased production for blu-ray diodes used in the PS3 increased speculation that a price-cut for the PS3 may be coming sooner rather than later. After all, cheaper production costs equate to cheaper overall manufacturing costs and then, a price cut to incite a resurgence in product interest, right? Well, taking a look at the production cost comparison, it seems Sony may need to bring costs down on a few other key areas of their PS3 console before they consider a price-cut. In comparison, a few months after the 360 launched, cost production estimates were similarly expensive (sans built-in wireless and inclusive next-gen DVD drive). Don't worry fans, we'll get our price cut. Eventually.

[Via 1P Start]

*Update*
The data that Digitimes released today was from the November 2006 report that iSuppli released last year. The 360 model in the above chart is NOT the Elite, nor is that the current cost of either console. From GameDaily:

"iSuppli public relations manager Jonathan Cassell informed GameDaily BIZ that Digitimes compiled the data from last November's report and erroneously labeled it as May data."

[Via GameDaily]