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