PS3 manufacturing costs down 70%, says Oneda
- Posted July 31st, 2009 at 11:14 EDT by Mike Harradence
- 32 Comments
Speaking during the company’s Q1 earnings call yesterday, Sony Corporation bigwig Nobuyuki Oneda revealed that the cost of manufacturing the PlayStation 3 has dropped a whopping 70 percent since its inception in 2006.
Said Oneda: “The cost reduction since we introduced the PS3 is very substantial and this is on schedule.”
“We don’t disclose how much of the PS3, specifically the cost deduction was achieved during the past two years. But that is on schedule.” However, when pushed on exact figures, Oneda replied: “about 70 percent, roughly speaking”.
Sony revealed yesterday that it suffered considerable losses in the number of PS3 and PSP units sold, with the company posting an operating loss of approximately JPY 25.7 billion (USD 268 million).
- 6:21am EDT - July 31st, 2009
- 6:27am EDT - July 31st, 2009
wow, thats one h*ll of a reduction...
....lets hunt down alfers and rip out his heart
- 6:36am EDT - July 31st, 2009
Thats good news, does that mean have are now making a 'profit' on each PS3?
- 6:49am EDT - July 31st, 2009
lol take price from $600 down to 70% less $180
- 7:05am EDT - July 31st, 2009
I doubt they are making a profit with a loss of $268 million dollars.
- 7:11am EDT - July 31st, 2009
They will finally be making a profit on the Playstation 3. However the operating loss posted of 268 million dollars, is in line with the number of PS3's sold, Ultimately the PS3 is now making money for Sony Corp.
- 7:22am EDT - July 31st, 2009
70% of $800 would be $560. So that would leave the manufactoring cost of the PS3 at $240. So "roughly speaking" Sony is either already making a profit or is close to finally turning in some profit from sales.
- 7:27am EDT - July 31st, 2009
And had they dropped the PS3 price like everyone keeps demanding, they'd probably now be going out of business. Hopefully people will keep this in mind before they open their mouths in future, especially Bobby Nodick or whatever his name is.
- 7:31am EDT - July 31st, 2009
As 7 said the manufacturing cost was $800 per unit so they're finally selling the machine and not making a loss, but then again who knows how much tax and retil mark up goes on, Sony could still be making them for a loss.
- 7:39am EDT - July 31st, 2009
Nice, that cant do any harm what so ever! The PS3 has been out 3 yrs now and with a 10 year plan in place it looks like Sonys game plan is right on track.
- 7:55am EDT - July 31st, 2009
wow if the ps3 is now actually profitable for them, maybe this means they will be willing to drop the price just before christmas, whitch will mean a huge spike in sales, Price drop + new games like MW2 and all the great PS3 exclusives = WIN
- 8:26am EDT - July 31st, 2009
My crystal ball tells me TGS is when a price drop might happen like people have been saying for months.
AaronSOLDIER | AaronSOLDIER
- 9:23am EDT - July 31st, 2009
Ok lets see:
In 2006, the PS3 cost $842 to produce, so 70% of that is $350 ish. So it seems they are now profitting, but that doesnt explain the losses. Unless its dropped 5% - 10% in the last couple of months.
Will be making a thread on this.
- 10:33am EDT - July 31st, 2009
Sony doesn't only sell ps3s and psps you know. It has a big loss, but remember sony sells laptops, home theaters, tvs, audio systems, cellphones, bla bla bla.... too.
- 11:57am EDT - July 31st, 2009
If the Sony drops the PS3 (80 gb) price to $299 from $399 it is gonna hurt the sales of PSP GO which is priced at $250. So, Sony might have to reduce the price of PSP GO if they plan to give a price drop to PS3.
- 12:56pm EDT - July 31st, 2009
And sales are down 31%.!
snooper71 | snooper71
- 1:46pm EDT - July 31st, 2009
The losses are explained by amounts of manufactured units vs units sold.
Even if they made a 50$ profit on each console sold, they still have to sell them.
IE: 3 million units manufactured, 1.1 million units sold
50$ profit on 1.1 million units sold does not break even with 3 million units built. That's where the losses are.
- 2:00pm EDT - July 31st, 2009
Sony's profit margin isn't nearly as simple as selling price - manufacturing cost. You're not taking into account that their wholesale price to retailers is significantly less and you're ignoring their other costs (advertising, customer support, packaging and shipping, etc)
- 2:14pm EDT - July 31st, 2009
- 3:35pm EDT - July 31st, 2009
PS3 slim sounds more and more likely now after hearing this
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