iSuppli : PS3 costs $448.73 to build ...

[JardeL]

... iSuppli says ... : The PS3 now costs $448.73 to build while selling for $399. Sony subsidizes the hardware price but makes its profits on the many games that it and other game publishers sell to run on the machines.

Having sold the PS3 at a loss for its entire life span so far, iSuppli says, Sony may reach the break-even point with the PS3 in 2009, and start turning a profit on the consoles after that. "Every time we do a teardown, it's sort of backward-looking," says iSuppli analyst Andrew Rassweiler. "Sony is one step ahead of us and probably has plans to re-spin the hardware to reduce the costs yet again," he says.

One key difference in the latest console, Rassweiler says, is that Sony has in many cases combined two or more chips into one, or integrated some low-level chips. When it was first released, the PS3 sported a total of 4,048 different parts, including those in the handheld controllers. Now, that number has come down by about 30%, to 2,820. "At the end of the day the PS3 is doing the same thing it did before, but with two-thirds as many parts," Rassweiler says.

Fewer Chips Inside

On top of that, two key chips in the PS3 have moved on to more advanced manufacturing technology. In 2006, the main chips in the console, like the Cell processor and the Nvidia (NVDA) Reality Synthesizer, which handles graphics, were built on 90-nanometer manufacturing technology. Now they're even smaller, and are built on 65-nanometer processes, meaning they cost less to make than before. ISuppli estimates the Cell chip costs Sony $46, down from the $64 in 2007, and $89 in 2006.

The Nvidia chip has come down in price, too. It now costs $58, down from $83 last year, and $129 in 2006. In both cases, Rassweiler says, the chips have been significantly redesigned with new features for functions that used to be handled by separate chips inside the system, which also helps reduce costs.

And smaller chips require less power. That means Sony now ships the device with a less beefy—and less expensive—power supply that costs $21.50, vs. $30.75 before. "It's a slightly greener machine than it was before," he says.

[ http://www.businessweek.com/technol...han=top+news_top+news+index+-+temp_technology ] ...

There are already reports that Sony has dropped the price of 80GB PS3s to €299 ...

 

[Crossbar]

So the RSX manufactured on a standard CMOS process and running at 500 MHz is more expensive than the Cell manufactured on a SOI process and running at 3.2 GHz. It would be interesting to know how they came to that conclusion?

I think we can safely rule out the possibility that the Cell is manufactured in any significantly higher volumes than the RSX.

 

[grandmaster]

I'm wondering what the licensing cost of the RSX is to Sony, assuming that it does not own the design outright.

 

[Crossbar]

I'm wondering what the licensing cost of the RSX is to Sony, assuming that it does not own the design outright.

Knowing how picky Sony is about royalties, thinking about Immersion Technolgies, we can be pretty sure Sony prefered to pay a big part up front.

I think we can safely assume that it is in the single digit number range, talking US$. IMO probably below $5.

We also don´t know what the deal looks like, the royalties may vary depending on how high volumes are reached.

 

[DuckThor Evil]

Well RSX has about 30% more transistors and atleast on 90nm it was bigger in size aswell.

 

[wishiknew]

58 bucks for RSX? A faster whole radeon 4670 card isn't much more than that.

 

[eastmen]

58 bucks for RSX? A faster whole radeon 4670 card isn't much more than that.

Isn't the 4670 on smaller process and is also a smaller chip ?

 

[zed]

58 bucks for RSX? A faster whole radeon 4670 card isn't much more than that.

or try a geforce 8600GTS for $40 (sorry couldnt quickly find any 7800's)
this report is as bad as the iSupply from a couple of years ago when they priced it at ~$840

 

[Squilliam]

I believe there was a list of the PS3/Sony's "failings" in the first years since release on NeoGaf. Im not sure how to find it now. On it, one of the news articles had Nvidias stock price falling on weaker than expected revenues due to lower than expected PS3 hardware sales. So at this point its still very possible that they are paying Nvidia to use the I.P in their console.

Still doesn't prove iSupply right though!

 

[inefficient]

I don't understand why whenever someone does one of these BOM breakdowns they always do it in terms of US dollars. This makes no sense at all to me.

None of these consoles are manufactured or assembled in the US. And yet they always compared the costs in US currencies.

The US dollar fell ~25% vs the yen just this year. There is no suggestion that their breakdown takes this into account.

 

[Laa-Yosh]

Yeah, exactly the reason why Sony just can't drop the price, they're getting less money in both the US and in Europe for something that costs about the same - but not exactly the same - to build.

 

[Rangers]

or try a geforce 8600GTS for $40 (sorry couldnt quickly find any 7800's)
this report is as bad as the iSupply from a couple of years ago when they priced it at ~$840

So if everything is so cheap, why is X360 $200-$400 and PS3 $400, and both struggle to be profitable?

You have to take both sides when you think about this.

You could probably draw up a cost outline of 360 Arcade (removing tougher to peg Blu Ray costs from the equation) and say it costs I dont know, 90 bucks. But then that begs the question why the financials say otherwise..

And as much maligned as the $840 isupply qoute was, the fact is PS3 was 600 and losing A LOT of money upon release, so I fail to see what was so outlandish about it really..

I mean what was Sony's gaming loss that Q, despite PS2 profits? And how many PS3's did they sell, 1m? In fact, the cost might have been more like 1k than $840...

This latest isuppli estimate seems fairly reasonable..I could have picked a similar number out of my err, hat, if somebody pointed a gun and me and said "quick, what does PS3 cost build!", though.

 

[Mintmaster]

We don't know much at all about where Sony was losing its money. The division spent lots on marketing and development efforts, so trying to figure out what Sony lost per console at launch is tough.

wishiknew, the RSX cost looks silly at first, but is RSX fabbed at TSMC? Sony probably expected more cost efficiency out of its own fabs when deciding against outsourcing. RV730 probably is a lot cheaper if this is true when you add in the fact that it's smaller, too.

zed, any 8600 GTS boards for sale are just being cleared out. I doubt it cost $40 to produce them.

 

[NERO]

I mean what was Sony's gaming loss that Q, despite PS2 profits? And how many PS3's did they sell, 1m? In fact, the cost might have been more like 1k than $840...

The short answer is that the PS2 is still selling at a solid clip, but that the PS3 is outselling it. Also, the cost of refitting the PS3 to save in the long term is being paid now. Lastly, the much talked about currency risk factors with the stronger Yen.

 

[zed]

zed, any 8600 GTS boards for sale are just being cleared out. I doubt it cost $40 to produce them.

how about geforce 9500, only released 5 months ago so wouldnt be discounted yet, (which Ive just brought btw)
With this we have the same 65nm die, but more transistors than the RSX, thus should be roughly the same to make or prolly a bit cheaper

now if one can buy them today at $50 in the shops (including the packaging/cd/shipping/markup etc) how on earth do iSupply come by a $58 price for a rsx only

 

[fellix]

RSX cost probably includes the four DRAM chips, and such MCM-like substrates are generally more expensive to manufacture:

 

[TheWretched]

RSX cost probably includes the four DRAM chips, and such MCM-like substrates are generally more expensive to manufacture

Yeah, but he was talking about the complete card... So RAM is in there too (don't know which kind), a PCB, connectors, packaging, warranty, retail markup, shipping and whatnot...

 

[Lucid_Dreamer]

So if everything is so cheap, why is X360 $200-$400 and PS3 $400, and both struggle to be profitable?

You have to take both sides when you think about this.

You could probably draw up a cost outline of 360 Arcade (removing tougher to peg Blu Ray costs from the equation) and say it costs I dont know, 90 bucks. But then that begs the question why the financials say otherwise..

And as much maligned as the $840 isupply qoute was, the fact is PS3 was 600 and losing A LOT of money upon release, so I fail to see what was so outlandish about it really..

I mean what was Sony's gaming loss that Q, despite PS2 profits? And how many PS3's did they sell, 1m? In fact, the cost might have been more like 1k than $840...

This latest isuppli estimate seems fairly reasonable..I could have picked a similar number out of my err, hat, if somebody pointed a gun and me and said "quick, what does PS3 cost build!", though.

A Sony insider had the following to say:

It's actually a bit wrong, they have overestimated the cost of Blu-ray by about $35...

Otherwise they hit it pretty much on the nail, but then again I have been telling you guys this for quite a while now...

Source

If that is to be believed, the lost is around $15 on the 40GB PS3s in the US.

 

[Rangers]

Is there a link to the detailed teardown?? The article only lists a few components and doesnt link the full teardown that I can see.

 

[eastmen]

Wish they did all 3 systems.