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does anyone know the cost? i was just wonder with all the talk of the PS3 prices and SKUs

About $650-700

I don't think it would cost that much to actually produce a Playstation 3..

It does, they make a loss every time they sell one. They make up for it on software sales

Oh **** yeah, I forgot. My mistake

http://blogs.business2.com/utilitybelt/2..._is_a.html

That was when the PS3 was just released though, but I'm pretty sure production prices are less now

thanks everyone. hears a rep for your trouble.

Your very generous, thank you

No problem. I'm always here to help FELX.

they were losing $241 per system in november, so it costs around $841...components havent dropped enuff in the last 6 months to make a difference in their loss per system in my opinion

not yet, if their install base goes up in the range of 10 mill +
then maybe, i dont think they have any million sellers yet, maybe resistance

yea thats stupid how sony doesnt make a profit from selling a ps3

As CZMQ said they make up for it with software sales.

Im pretty sure Microsoft make a loss for every system. But they also make up for it in software sales.

At this point no one can give you the actual cost of a PS3, because all the figures we have that break down each component cost is dated when the system first released back in Nov 2006.

As we know with every piece of technology bought, the cost of those components go down over time and the PS3 will be coming up on it's 1 year anniversary, so I'm sure the cost has gone down or will have gone down by then significantly.

well, not entirely. If the system was $800, I think even the zealous fanboys would think twice. so they cut the price.

According to the staff in my local HMV, no-one wants PS3 games, In one week they sold three games for the PS3. The Wii section however, hardly ever has anything that isn't wiimote gloves, it all sells out really quickly.

Prices of systems are very relative and are based on a slope, not a fixed number. For instance, the very first system created certainly cost A LOT to make. This is because it is not only the hardware components, but also the labor and R&D that went into creating it. As more systems are developed, R&D costs are spread throughout the systems created. Thus, if it cost Sony 10 million (random number, actual is probably much higher), then the first system had an R&D cost of $10 million. If they make two, then they split the R&D costs between them, each costing $5 million. After a million systems are produced, the R&D costs are $10 per unit, and so on. In addition, as more systems are produced, the cost of the components come down (due to increased orders, more efficient manufacturing techniques, etc), and the labor required to create a system is reduced as well (as the workers become better at it). All of this means that the cost of the system is always changing, at least by the day or batch. It gets even more complicated if you factor in the cost of merchandising and supplying the units to the public, etc. You gradually work towards a "break even point", were you go from being unprofitable, to profitable.

It's interesting to note that even Microsoft's Xbox division is still not profitable, in spite of its relative success with hardware, software, online, and media sales.

It's also interesting to note that Nintendo does not follow this business model. Instead, they produce systems and sell them for a profit. Combine this with the fact that they are one of the leading software manufacturers, and you have a very valuable and efficient video game company that has no problem going toe to toe with two of the largest electronics companies in the world. Where all other smaller video game hardware companies have failed, Nintendo continues to grow and succeed.

As long as they have decent software, they'll make some sort of profit.

not really, the software can be great but unless they can sell large #s of each, 600,000 copies just to break even (MS 360 same number also)

and they clearly arent selling millions of copies of these games (yet)

so there isnt any way to defer the loss on each system with software

but they sold alot of tix to spidey 3, and sell lots of other electronics so they will be fine overall

there game division however might not be profitable for a couple years

You guys are forgetting that Sony makes TVs and other electronics.
Thanks to the millions of dollars they make off those they can afford losing money for each system bought, and still make more profit from games. (Once the time comes)

Anyways, this question was answered best it could.
Close'd.