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  1. #1
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    PS4 BOM (bill of materials)

    Hey guys i would like to start a thread about the price and BOM of the PS4, we dont now every detail/spec of the console but there are some news from the PS4 reveal to start a discussion!
    My guess is:

    APU(CPU/GPU): appr. $150 - i have taken the AMD A10-5800K APU it will be customized
    8 GB GDDR5 RAM: appr. $120 - i have no clue how much GDDR5 RAM cost maybe its even more
    Blu-ray drive: $50 - it could be less than that
    500 GB HDD: $50 - i think the standard version will include a 500 gig HDD
    Other components: $50 - perhaps its more with the secondary chip
    controller, headset: $30

    TOTAL: $450 - I would guess the costs will be btw. $450-500

    original PS3 BOM: http://www.engadget.com/2006/02/18/p...ill-lynch-mob/

    slim PS3 BOM: http://www.xbitlabs.com/news/multime..._Analysis.html

  2. #2
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    We are getting the camera in the box too, thats atleast $50 alone. I think 500GB will be the base launch, depending on sales they will go up or down.

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    Ojnly source of info I found for GDDR5 prices.
    Using the highest amount and most expensive it works out $192 for 8GB GDDR5.
    This is probably coming up for 2 years old now
    Last edited by keefy; 04-07-2013 at 16:14.

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    That seems expensive but people are loving it much like the 500mb ram in the Vita.

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  5. #5
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    Keep in mind that these are parts you're finding prices of, when they order parts they will often be at a much greater volume thus the parts will be significantly cheaper. Even though you might find approximate parts for about $450, they would most likely have their entire build close to or less than half of that (including all other expenses).

    The Blu-ray drive for instance most certainly won't cost them $50 to manufacture and supply, more than likely it'll be in the $15-$20 range.

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    The PS3 GPU was so cheap lol.


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    Quote Originally Posted by Varsh View Post
    Keep in mind that these are parts you're finding prices of, when they order parts they will often be at a much greater volume thus the parts will be significantly cheaper. Even though you might find approximate parts for about $450, they would most likely have their entire build close to or less than half of that (including all other expenses).

    The Blu-ray drive for instance most certainly won't cost them $50 to manufacture and supply, more than likely it'll be in the $15-$20 range.
    You're right, if the report is true that Sony wants to sell 16 million units this year thats an awful lot of consoles obviously they will buy a lot of parts cheaper than they are available for us.
    It seems the most expensive part is the RAM but they wont have the manufacturing problems and costs they had with PS3 cell and blu-ray drive im sure we will see it in the price too!

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    The BOM of this machine is interesting but also somewhat concerning in the areas of memory. The fact that they appear to have gone with a hard drive still plus a 256bit data bus on the GDDR5 means that Sony will have a difficult time reducing prices on those components over the life time of the machine.

    Those two components are basically available at optimum value as it is. The APU can easily be reduced with down scaling of the wafers but that's expected.

    So far everyone I have spoken too in this area have all come at around the same price point of between $350-$380 BOM for the console alone. Unfortunately Ps4 could be a fairly costly machine again but this isn't due to a lack of financial management but simply because there is lot of tech in the box so in that light it's not such a bad thing overall.

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    Sony has stated that they eventually plan on switching from the current 16x 512MB (4G-bit) GDDR5 chips to 8x 1GB (8G-bit) GDDR5 chips. Apparently they mentioned this when talking about plans for cost reduction with the GDDR5 memory.

    Here is the article. Unfortunately it is in Japanese and I have only been able to go off what others have said about it since I can not read Japanese.

    http://pc.watch.impress.co.jp/docs/c...12_591321.html

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    Here it is the first teardown of the materials and costs used in the PS4!!!
    http://www.psu.com/a021711/-PS4-tear...cture-is-$381-
    Last edited by pulci; 11-19-2013 at 15:28.

  11. #11
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    Sony’s PlayStation 4 Costs $381 to Build — Only $18 Under Retail Price — in Teardown

    Well, I was about to make another thread about this but I figured it would be best to put it here.

    http://allthingsd.com/20131119/teard...ild/?mod=tweet


    When PlayStation 3 was first released by electronics giant Sony in 2006, it was sold at a loss with the hope of making money back on individual games.
    That’s pretty close to what Sony is doing again with the PS4, although it’s not as extreme. At least that’s the finding of the research firm IHS, which will later today release the findings of a teardown analysis of the PS4 and the combined cost of the components used to build it.
    AllThingsD got an early look at the analysis, in which the firm estimates the cost of those parts, plus what it costs to assemble them, at $381. That is only $18 shy of the PS4′s $399 retail price, leaving Sony little profit margin on the sale of the device itself.
    Such thin gross margins on a consumer electronics product are rare. Apple’s iPad Air, for example, sells for a minimum of $499 at retail, yet costs up to $274 to build, leaving a considerable margin, according to previous IHS reports.
    However, it’s a better picture now for Sony than it was in 2006, when its predecessor game console, the PS3, was first released. Back then, IHS conducted a similar teardown analysis of the PS3 and determined that it cost about $805 to build a console that sold for $599. Over time, of course, the costs came down, but when they did, Sony cut its retail price accordingly in order to encourage more sales. By late 2009, the PS3 was selling for $299, even though it cost $336 to build.
    “If Sony could build the PS4 for a lower cost it would do so, but if history is any indicator, it would also lower its retail price,” says Andrew Rassweiler, an analyst with IHS in Los Angeles who oversaw the teardown.
    To get into the particulars, chips take up a big proportion of the cost of the internal components. An unusually large microprocessor that is manufactured by chipmaker Advanced Micro Devices costs about $100 to build. When combined with the cost of memory chips, at $88 for 16 individual memory chips, you have more than half of the cost figured in, Rassweiler said.
    The AMD chip is 350 square millimeters, making it the physically the biggest chip that IHS has ever seen built on the relatively new 28-nanometer manufacturing process. “This chip is just gigantic,” Rassweiler said. “It’s almost three times as big as the next biggest chip we’ve seen.”
    But, in the complex world of chip manufacturing, bigger isn’t necessarily better. Chips with a larger surface area have a higher probability of suffering from manufacturing defects, Rassweiler said. That, in turn, means that the number of good chips on each silicon wafer tends to be lower, meaning more chips overall have to be manufactured, raising costs overall.
    IHS estimates that roughly a third of the chips are likely to suffer from these defects and therefore aren’t used, lowering the overall manufacturing yield on the chips. “When the yield goes down, the price goes up,” Rassweiler said. “It’s a well-established principle of chip manufacturing.”
    The other big cost is memory chips. There are no fewer than 16 individual memory chips in the PS4, costing Sony about $88. The cost of the processor and the memory works out to $188, nearly half of the total cost, Rassweiler said.
    After chips, the parts inside the PS4 become somewhat less unusual. There’s the hard drive from Seagate ($37), wireless chips from Marvell and Skyworks and an optical drive that costs about $28.
    Then there’s the controller, which costs another $18 to build. It contains Bluetooth chips from Qualcomm, an audio chip from Wolfson Microelectroncs and a motion sensor chip from Bosch. The system ships with only one controller in the box.
    With the component cost and the retail price so close, it’s possible, Rassweiler said, that Sony is taking a very small gross margin or even a possible loss on the console in hopes of making it back on games. “If your cost is within $10 to $20 of the retail prices, there’s very little chance you’re making a profit on the console,” he said.
    The practice would be consistent with the way Sony has done business in the past, although with a smaller differential between cost and retail price on the PS4 versus the PS3. “It looks like once again, when it comes to profits, it’s all about the game titles,” said Rassweiler.

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    Suggesting they're making money on PS4 console hardware right now is ridiculous. They're just losing a whole lot less than PS3. US$18 per unit nowhere covers assembly, freight, technical support and repair if required, or PS4-specific network services not supplemented by PS+ subscriptions. For a games console it's a pretty great cost of materials compared to retail price for launch, but it's hardly a profitable position, not on console hardware sales alone.

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    Of course they are not profitable yet, the manufacturing, marketing and other related costs are counted in billion dollars but they are in a far better position to actually make a profit in the future on each console especially with the peripherals.
    The sales numbers are very good and hopefully will be even better in the future with upcoming AAA titles!

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  15. #14
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    Quote Originally Posted by pulci View Post
    Of course they are not profitable yet, the manufacturing, marketing and other related costs are counted in billion dollars but they are in a far better position to actually make a profit in the future on each console especially with the peripherals.
    The sales numbers are very good and hopefully will be even better in the future with upcoming AAA titles!
    Exactly, people forget to include the manufacturing cost and marketing as well as other cost in the figure. This at least tells us that the system will be profitable, sooner than we think, based on the price of the components.

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    Quote Originally Posted by Saigon View Post
    Exactly, people forget to include the manufacturing cost and marketing as well as other cost in the figure. This at least tells us that the system will be profitable, sooner than we think, based on the price of the components.
    Quote Originally Posted by pulci View Post
    Of course they are not profitable yet, the manufacturing, marketing and other related costs are counted in billion dollars but they are in a far better position to actually make a profit in the future on each console especially with the peripherals.
    The sales numbers are very good and hopefully will be even better in the future with upcoming AAA titles!
    Yes, I think it's very positive news for future Sony revenue on PS4. To clarify, I wasn't referring to anyone posting here but only referring to IHS analyst Rassweiler telling the All Things D reporter that it's possible Sony might be taking a very small gross margin on retail price. I don't know what Rassweiler should be analyzing, but not retail consumer electronics markets. There's no way they're taking a gross margin, not even small like microscopically small. Granted, qualifying "margin" with "gross" could reasonably eliminate from consideration marketing and promotions and network services and I guess, at a stretch, support. But they have to put them together and they have to ship them and 18 bucks American just won't cover that.

    Ultimately I'm saying trying to figure profitability of turnkey software+hardware products by tallying up parts cost is just so much tomfoolery and doesn't qualify as bona fide market analysis. It's just blathering on to get your name around. iPad parts cost way less than a retail iPad -- an example of the iPad Air is in the article -- and that leads people to scream, Apple is ripping people off on iPads. Well, yeah, "ripping people off" is known in capitalist economies as "what the market will bear," and Apple certainly sells their products at high premiums, but a parts list on an iPad completely ignores the fact it's a doorstop without its proprietary OS, which apparently these market analysts assume is somehow researched, developed and updated for free. You know, those crazy volunteer software engineers and their nutty ideas about charity.
    Last edited by sanfordmay; 11-19-2013 at 18:23.

  17. #16
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    Quote Originally Posted by sanfordmay View Post
    Suggesting they're making money on PS4 console hardware right now is ridiculous. They're just losing a whole lot less than PS3. US$18 per unit nowhere covers assembly, freight, technical support and repair if required, or PS4-specific network services not supplemented by PS+ subscriptions. For a games console it's a pretty great cost of materials compared to retail price for launch, but it's hardly a profitable position, not on console hardware sales alone.
    The point is this is the first Sony console that has sold at launch without a loss. With all the previous consoles, Sony kept reengineering through the console lifecycle, where about halfway through, the console hardware starts selling at a small profit at first, then growing during the rest of the console lifecycle. This time around, Sony is selling at break-even at launch. They can be expected to keep re-engineering the manufacturing of the PS4 to increase the profit margin over its lifecycle. It puts to rest the strategy of sell the hardware (the engine) at a loss and make up for it with sales of fuel (software). It works but it can mean a couple tough years for the company as software sales pick up. It also means there is probably a Slim PS4 a couple years from now.
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  18. #17
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    Quote Originally Posted by pulci View Post
    Of course they are not profitable yet, the manufacturing, marketing and other related costs are counted in billion dollars but they are in a far better position to actually make a profit in the future on each console especially with the peripherals.
    The sales numbers are very good and hopefully will be even better in the future with upcoming AAA titles!
    Exactly this, there are long run fixed cost added to the console that increase its price; Workers wages, R&D, Cost of equipment etc.

    I think it has already come out that sony lose $60 on every PS4. a far cry from the $400 on every PS3. So it's still impressive.
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    Most consoles barely make it to the break even point in terms of BOM regardless of all the external factors, the fact that they are there already is a great.

    Funnily enough all the systems this generation appear to be playing it safe when it comes to manufacturing. We already know that Wii U is break even, Ps4 is practically the same and it is estimated that the X1 is in a similar position.

    They all appear to be playing for long term sustainability of the market rather than just being the biggest player which is a good thing for everyone.

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