Provide your estimates "cost of goods" for each current gen console

[Carl B]

I don't ever want to see those BS iSuppli numbers on this forum again. I'm not asking, I'm telling.

You know the entire logic behind the thread itself is inherently off when we're dealing in $'s also... shouldn't PS3 costs be in yen? Same with Nintendo. In pricing in dollars we're losing sight of one of the most fundamental problems facing the company at the moment. And going further to that, I highly doubt that the system is costing less in total than it sells for, as that would almost demand that the division be much more profitable right now than it is.

 

[rekator]

I don't ever want to see those BS iSuppli numbers on this forum again. I'm not asking, I'm telling.

You know the entire logic behind the thread itself is inherently off when we're dealing in $'s also... shouldn't PS3 costs be in yen? Same with Nintendo. In pricing in dollars we're losing sight of one of the most fundamental problems facing the company at the moment. And going further to that, I highly doubt that the system is costing less in total than it sells for, as that would almost demand that the division be much more profitable right now than it is.

Interesting, is the Dollar the money for the electronic trade?
Dollar is the Devise for many products, Petrole, Pulp Paper, Coffee, metals, etc…
Supposed than the Dollar is the Devise for the trading in console (elements and manufacture), the Dollar fluctuation not influence the production cost but influence the benefits/losses.

 

[Carl B]

Not sure I understand what you were alluding to Rekator, but I think you're talking about commodity pricing. Since Sony (and Nintendo) are Japanese companies I think it is more accurate to try and stay focused on the fact that their businesses operate on yen, as that reminds us of the effect the exchange rates have on the margins when the goods are actually sold overseas in GBP, Euros, dollars, or whatever. When we (arbitrarily) normalize everything to dollars around here - without actually normalizing - we're losing a lot of the relevant information in our analysis.

 

[Rangers]

Nobody wanted to complain about my $60 Wii estimate?

I thought of another method of comparison to 360/PS3 price today besides video cards..netbooks.

There is an asus netbook at Wal Mart for $348. This should contain relative to the consoles, a circuit board, much less silicon (Atom cpu=??), a HDD, but OTOH, has the major added costs of a Windows Xp License, and an LCD screen. But it is also guaranteed profitable.

 

[PalmiNio]

It would be interesting to hear what the estimated cost is for each of the current gen console. I know that estimates are not based on hard facts, but it would be interesting to find out what everyone here thinks the actual cost of goods are for all 3 consoles.

If I had more time I would have broken it down by component but I'm in a bit of a rush... so here are my estimates for all 3 consoles. I will try and break it down further with a component per component estimate in a later update.

PS3 (80GB) - $330
PS3 (160GB) - $365
XBOX (arcade) - $220
XBOX (Pro) - $260
XBOX (Elite) - $300
Wii - $180

So you belive that PS3 is selling at a profit and Xbox 360 at a loss?

If MS i cutting price without having margins for it and Sony don't and have margins for it, then there is no logic.

Read somewhere that to the en consumer Nintedo makes 6 dollars, 360 even and PS3 loses.

Can guarantee that the cost of PS3 is higher than that, that goes for lower for 360. Looking inside both you know who designs for quality and who designs for low cost.

There is no way that Sony have that margin without doing a pricecut in a year worse then 2007.

 

[Shifty Geezer]

Read somewhere that to the en consumer Nintedo makes 6 dollars, 360 even and PS3 loses.

We discussed that analysis elsewhere, and it's bunk. There's no way Nintendo make a measely $6 on a Wii. They make a flippin' packet!

 

[eastmen]

We discussed that analysis elsewhere, and it's bunk. There's no way Nintendo make a measely $6 on a Wii. They make a flippin' packet!

Unless they include their marketing budget in the cost of the console

 

[PalmiNio]

This could be a little more scientific if we first took the time to break down the components of each console, and then guessed the cost of each.

e.g. completely imagined numbers -
Xenon $30
Xenos $60
HANA $10
RAM $20
rest of motherboard $30
case $15
PSU $10
DVD drive $5
hard disk w/ chassis $30
component cables $5
controller & headset $15

Total $230

5$ in cost for a massproduced component cable? No, more like 2 max.
20 $ for 512mb GDDR3? if you can get a videocard at retailprice for 50-60 $ with the same amount of GDDR3 i don't think 20 $ is the cost. More likly 5-10 $ due to scale
15 $ for the case? Look at it, more budget is impossible. more like 5 $.

360 Arcade - 170 dollars
360 Pro - 200 dollars
360 Elite - 220 dollars (cost of bigger harddrive = 0)

I would guess that PS3 is just around 400, with 160 costing max 10 dollars more. Sony is giving much extra in the 160gb version due to the fact that they are likly to actually make money on it.

 

[PalmiNio]

We discussed that analysis elsewhere, and it's bunk. There's no way Nintendo make a measely $6 on a Wii. They make a flippin' packet!

Yeah i know, don't belive them either.

But just saying that it makes no sence that MS would have Arcade at 199 if it costs 220 dollar to make. On that you have to add the margin from retailers, taxes, distribution. It would mean that MS actually looses 50+ dollar on each console and I don't belive that is the case.

 

[Shifty Geezer]

They could be. MS are aggressively pursuing market share and a loss-leader helps in that respect. The lower price has certainly attracted customers, and the TV ads 'Available for £130' present a very cheap attention-grabber even if the shoppers buy the proper model instead. Thus the marketing benefit may also offset some of the losses.

I can't say for sure, but I wouldn't look at retail price and try to backtrack a possible unit production cost from that. The profit margins on consoles can range from bigger losses to big profits over their life.

 

[Cheezdoodles]

Id imagine the Nintendo Wii costing a maximum of $50.

$6 profit per wii seems completely ridiculous, Microsoft aren't taking that big losses on the Arcade, and that thing has 10x better hardware which is much more expensive to make.

 

[Brimstone]

Businessweek is reporting that according to iSuppli the PS3 bill of materials is currently at $448.73. So Sony is losing about $50 each PS3.

Back then, an iSuppli analysis pegged Sony's "bill of materials"—the total cost of all the components used to build it—at more than $840 for the model that sold at the time for $599, and $805 for the starter model that sold for $499, making it a money-loser for Sony. It still appears to be a loser two years later, iSuppli says, but the loss is shrinking: 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.

http://www.businessweek.com/technology/content/dec2008/tc20081222_257990.htm

 

[obonicus]

Businessweek is reporting that according to iSuppli the PS3 bill of materials is currently at $448.73. So Sony is losing about $50 each PS3.



http://www.businessweek.com/technology/content/dec2008/tc20081222_257990.htm

How much is that in Yen? I mean, before the yen rose, was Sony really profitable like we heard?

 

[DrJay24]

So Sony is losing about $50 each PS3.

Only Sony knows what the real cost is, so maybe we should condition these statements with "estimated".

 

[Arwin]

Only Sony knows what the real cost is, so maybe we should condition these statements with "estimated".

Also, if true it would be $50 lost in the U.S., but about the same money gained in the E.U.

Though as I've mentioned elsewhere, stores have begun selling PS3s for 299 (the 300 Movie bundle is selling at that price, I saw it in a store - Bart Smit, which is also online - just a few hours ago)

 

[Limanima]

People tend do forget that a PS3 costs 400 Euros in Europe.
400 Euros are about 560 USD.

So, how much money is Sony losing with the PS3 in Europe?

 

[obonicus]

People tend do forget that a PS3 costs 400 Euros in Europe.
400 Euros are about 560 USD.

So, how much money is Sony losing with the PS3 in Europe?

Well, again, you should convert to Yen, rather than USD. But a quick check tells me that 400 EUR is ~50,000Y and 400USD is ~36,000Y, so there's a big difference there.

 

[Limanima]

Well, again, you should convert to Yen, rather than USD. But a quick check tells me that 400 EUR is ~50,000Y and 400USD is ~36,000Y, so there's a big difference there.

I've converted to USD simply because the estimated costs are in USD not YEN.

 

[Carl B]

I've converted to USD simply because the estimated costs are in USD not YEN.

And they're wrong to be in dollars. As for Euros, remove the included VAT before running your yields.

 

[Limanima]

As for Euros, remove the included VAT before running your yields.

Good point.
But maybe those USD estimates also include VAT? If not, it's also incorrect to compare that with the $400 price tag.

Are all this problems and questions that makes me think : "How can someone estimate the price of a console? Only Sony can estimate this":