Teardown Shows PS3 Slim Still a Sony Loser
You're getting a $37.27 break on the new PS3 Slim.
It’s not uncommon for video game companies to sell hardware at below cost with plans to make it all back (and eventually profit) from software sales. It’s the classic razor and blade model.
Over time, the platform holder eventually breaks even on the hardware and even later begins to make money. This hasn’t happened yet for Sony and the PlayStation 3.
When it launched in late 2006, Sony was losing hundreds of dollars on each console sold. While manufacturing costs have fallen since then, so too has the price of the system.
The latest redesign of the PlayStation 3, now the PS3 Slim, has had two effects: the slimmer, more efficient console and a lower price point.
A tear down by iSuppli reveals that it costs Sony $336.27 to manufacture each PlayStation 3. While that is already less than half of what it used to cost the company to make one, it is still losing money on each console sold at $299.
In October, Sony CFO Nobuyuki Oneda said of PlayStation 3 costs, "At present, the difference between sales and materials cost has been reduced to between 10 and 20%. Within the year, it could be in the single digits. We'll be able to reach profitability at some point in the next term."
So all of you who are picking up a PS3 now more than three years after launch, you're still getting a great deal on what's inside the box.
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Does isupply really have access to Sony's channel pricing info? I kind of doubt it, but whatever.
I agree... isupply is estimating Sony cost, they could easily be off by more than the stated loss Sony is supposedly taking.
If they were losing hundreds on the earlier models, when sales were relatively strong and will be lucky to make tens on later models, they'll never break even. I guess they plan on making a decent profit on the games.
Lo$er$....
I agree, this is a stab in the dark, an estimated guess. And with every PS3 sold is games sold and with every game sold is $10 - $ 15 in Sony's Pocket without doing anything. So Sony is makeing money from the console and you can doctor your books anyway you like, we know your makeing money.............
Sony seriously STILL has not made a dime off PS3?
LOL
I like how the PS3 fans are like "zomg its such a powerful machine, PCs cost way more" but the answer really is kinda... costs you, the consumer more but then again your PS3 should retail for like $800 but they hand them out like candy instead.
It is a win for console fans though, they get sick hardware and a media entertainment platform dirt cheap. I can't get in to those controllers... give me a mouse and keyboard instead of 2 thumb-sticks...
I bought the PS3 when it came out. I think Sony was losing about 300 bucks per machine back in those days. It's an excellent Bluray player but as a gaming machine..? I don't know. I have no idea where the gamepad is. Haven't seen it in ages. Guess I'll find it when I move.

What a golden customer I am
To come up with a specific dollar amount like that makes me wonder. Even if iSupply gets exact details on what each part "costs" Sony to purchase, they still have to figure in shipping costs, finance charges if Sony uses any sort of credit to buy in bulk, overhead costs (electricity, health insurance, workman's comp insurance, etc etc etc).
So the reality is, that if the "per part" costs are the $336.27 they claim, then they've still off by a bit. Who knows, maybe iSupply had an inside source and was able to get input from someone at Sony who had their "estimated" prices as to what something "costs" them including overhead breakdown and such.
Either way, I still think the PS3 and XBOX360 are more expensive than what I as a consumer think they are worth. Which is why I haven't purchased either one. It's all about perception though. Many console gamers would say my gaming PC isn't worth it either. So it's all in how you look at it.
I'll agree with the above posts. I call bs on this cause none of us can expect us to believe that isuply knows costs to Sony for any of the pieces of hardware in the PS3. Specially when a Sony dude over the past months stated that Sony's PS3 hardware cost had dropped already by a 70%+. In order for that to be valid alongside this article then Sony was loosing more than just a coulpe of 100s $per console before the Slim release.
Anyhow, today or yesterday they mentioned from Sony again about subs on PSN. And actually worst than the simple subs of their competitor's XBL model. I read it earlier in the morning at another site ( for me its night here now.. ). Ofc that will bring them in some big bucks but changing so much their online model will kill their online community which is already lacking from their competitor's so I dont know what they are doing yet. We shall see.
Omg, the PS3 is such a powerful machine. The cell processor has changed my life. My eyesight has improved, I get better grades in school (I'm not even enrolled), my dogs love me more and I have better luck with the ladies.
Thank you Sony!!!
P.S. It can control the weather too. FREAKING AWSOME!
"When it launched in late 2006, Sony was losing hundreds of dollars on each console sold"
Hundreds of dollars? Really. It costed almost $500 and it still was losing hundreds of dollars? What, it costed them $700 to make a PS3 (gen1)? I don't believe it.
"When it launched in late 2006, Sony was losing hundreds of dollars on each console sold"Hundreds of dollars? Really. It costed almost $500 and it still was losing hundreds of dollars? What, it costed them $700 to make a PS3 (gen1)? I don't believe it.
Believe it
[citation]The PlayStation 3's initial production cost is estimated to have been US$805.85 for the 20 GB model and US$840.35 for the 60 GB model.[204] However, they were priced at US$499 and US$599 respectively,[205] meaning that every unit was sold at an estimated loss of $250,[204] contributing to Sony's games division posting an operating loss of ¥232.3 billion (US$1.97 billion) in the fiscal year ending March 2007[/citation]
Source: Wikipedia
I plan on buying my first PS anything, sadly not for the gaming (visiting friends and family will enjoy it) but as a BD media console, with its ability to play just about every format, avi's, mp3's, etc, wifi, 5.1 audio, usb and HDMI, what more is there to say
$66 for a Blu-ray drive sounds excessive considered you can pick them up at retail for less.
Don't forget Sony makes $ on Blu-ray sales and licensing.
I plan on buying my first PS anything, sadly not for the gaming (visiting friends and family will enjoy it) but as a BD media console, with its ability to play just about every format, avi's, mp3's, etc, wifi, 5.1 audio, usb and HDMI, what more is there to say
Or you can buy a brand new Sony Blu-Ray player from Costco for $134.99
http://www.costco.com/Browse/Produ [...] en-US&Sp=C
Only reason to spend $300 on a PS3 Slim is if you want Blu-Ray & Games. If you could care less about games, just buy a Blu-Ray player. They are getting cheap now.
Just bought a PS3 slim, but second hand market. I want Sony to get as little of my money as possible. All used games and all knock-off controllers so far too.
They havent lost a dime on it.
Just winning the blue ray hd war was enough to make up the loss many many many times over.
As a game system who cares, but as the single reason they won the blueray vs hddvd war...its a complete and utter winner.
What makes me laugh is that they see the sale price of $299, and think that Sony sells it for $299.
Sony sells it for probably around $249, to the retailers, so don't forget to add that cost back in as well.
What makes me laugh is that they see the sale price of $299, and think that Sony sells it for $299.Sony sells it for probably around $249, to the retailers, so don't forget to add that cost back in as well.
Not necessarily - Sony could have agreement to basically breakeven on console even at the retail level and then offer bigger profits to the reatiler on games, add ons, etc. So retailer may be paying close to $299. Doubt it though.
"When it launched in late 2006, Sony was losing hundreds of dollars on each console sold"Hundreds of dollars? Really. It costed almost $500 and it still was losing hundreds of dollars? What, it costed them $700 to make a PS3 (gen1)? I don't believe it.
thats because your mommy has been spoon feeding ur sorry ass. not surprised that u have no idea how much Milk actually cost.
This was news hours after the PS3 slim was released. I believe Sony even said that they still aren't making money off of the actual console, but are making it on the games, licensing, and accessories
And MS is making money off the 360? The extended warranties, high failure rates, law-suits.
Just bought a PS3 slim, but second hand market. I want Sony to get as little of my money as possible. All used games and all knock-off controllers so far too.
Actually, since Sony is losing money on the console, buying it second hand saves them money.
"When it launched in late 2006, Sony was losing hundreds of dollars on each console sold"
Hundreds of dollars? Really. It costed almost $500 and it still was losing hundreds of dollars? What, it costed them $700 to make a PS3 (gen1)? I don't believe it.
The first gen PS3 manufacturing costs were near 900 dollars US.. mainly because of the high cost of the bluray components....
all this info on cost is readily available and other sites have been reporting this info since the first release of the console.
Believe it or Not.
Just got my 1st PS3(slim version) last month @ the $299 price point. I must admit I wanted to get one sooner but just could not justify $399+ for a console despite all the features. As Marcus mentioned at the bottom of the article, I do feel like I've gotten a great deal at the $299 price. There is no monthly fee for online play(as with xbox live), lots of media types supported, HDMI interface, and I can set up my Netflix thru it which I thought was pretty cool.
iSuppli's number may be disputable but, I would guess they are fairly close to the actual number.
Winning the war in the next generation media format certainly couldn't of hurt Sony's bottom line. I don't know if it is enough to offset the hardware losses but, I suspect it is
Like isupply knows the prices the parts that sony gets. Sony buys in bulk, so there is already a discount there. Even if this number were true between games, accessories, blu ray sales, PSN downloads, and licensing they are profitable.
If they were losing hundreds on the earlier models, when sales were relatively strong and will be lucky to make tens on later models, they'll never break even. I guess they plan on making a decent profit on the games.
..bk420 12/15/2009 7:40 PM
Lo$er$....
No they make their profit off screwing you on video content as I have learned today after upgrading my hdd and backing my videos up only to find out they will no longer play and sony will not allow me to redownload them even though I paid for it. Sony andApple can go screw each other in ass for all I care. (rant mode off)
No they make their profit off screwing you on video content as I have learned today after upgrading my hdd and backing my videos up only to find out they will no longer play and sony will not allow me to redownload them even though I paid for it. Sony andApple can go screw each other in ass for all I care. (rant mode off)
I think you can redownload if you log onto your PSN account? I think I remember reading something about even if your whole system dies you can redownload content? If not you should retaliate by just using Divx on your PS3 (works great you can fit like 5 movies on one DVDR)
Well I called them and the guys said they would not allow me to download again because each time the video is downloaded Sony has to pay royalties to the producer of the video. BS if you ask me. Whats the sense of a having the ability to back up video if you cant even see it anymore.