PS3 costs reduced by 70%?

[Queasy]

TVG is reporting that during a conference call about Sony financials, Sony CEO Nobuyuki Oneda said that the PS3 manufacturing costs have been reduced by "about 70%, roughly speaking."

This would mean that the PS3 would now cost around $240 to make, roughly speaking.

Hellooooo price cut.

 

[erwos]

You are making the rather bold assumption that he was telling the truth, and that "about 70% roughly speaking" doesn't mean more like 30%.

 

[Queasy]

Originally posted by: erwos
You are making the rather bold assumption that he was telling the truth, and that "about 70% roughly speaking" doesn't mean more like 30%.

Actually, I would be making two bold assumptions:
1) He knows what he's talking about.
2) He isn't lieing.

But, that's what the man said and it's all we've got to go with.

 

[R Nilla]

I know it would never happen, even if the above was true, but imagine a $250 PS3.

 

[Fox5]

Has anyone tracked the hardware of the ps3? It started at 90nm, so if it's at 65nm now, that would be a substantial price reduction.

 

[Queasy]

Originally posted by: Fox5
Has anyone tracked the hardware of the ps3? It started at 90nm, so if it's at 65nm now, that would be a substantial price reduction.

It went to 65nm with the introduction of the 40GB PS3 at $400....which is now the standard 80GB PS3 and 160GB PS3. They are in the process of moving to 45nm.

 

[RyanPaulShaffer]

Price cut? Nah, what Kaz will announce soon is a PS3-Go!, which will come packed with motion controls and RIIIIIIIIIGE RACER, all for the low, low price of three hundred and ninety-nine US dollars. Oh, it will also remove the Blu-ray drive, so that Sony can maximize profits by removing the expensive Blu-ray drive, and it also forces people to buy DRMed digital downloads off of PSN.

 

[RyanPaulShaffer]

In all seriousness, if there is a price cut, I doubt it will be significant. The PS3 has cost Sony truckloads of money, so they would only do a modest price cut (if any) in order to start making up for their monstrous losses on the PS3.

 

[Thraxen]

I suppose it's possible, but I wouldn't be surprised at all if erwos is right. He may have been trying to say that the PS3 costs 70% to produce now compared to at launch (i.e. 30% reduction). Keep in mind there is a possible language barrier here.

 

[Queasy]

Originally posted by: Thraxen
I suppose it's possible, but I wouldn't be surprised at all if erwos is right. He may have been trying to say that the PS3 costs 70% to produce now compared to at launch (i.e. 30% reduction). Keep in mind there is a possible language barrier here.

Well, if it were only a 30% reduction that would mean it costs ~$560 to make a PS3. If I remember correctly, the last mention of PS3 cost earlier in the year was less than that. With the PS3 moving to the 45nm chip process, it is very conceivable that the cost to make a PS3 could be down to around $300.

 

[Thraxen]

Well, 70% would seem more likely then.

 

[IEC]

Anyone have a link to the original conference call (if it exists)? I could settle the 70/30 argument if so

 

[Krakn3Dfx]

If Sony puts a PS3 on the market for $299 with a couple of decent pack-in games, I think you could see them back in the game.

I really hope if they have cut productions costs this much, they will take advantage of that fact here in the next few months.

 

[darkrisen2003]

For ( Insert Whatever Name you please here) 's Sake Do Not forget to place PS2 BC back into the console.

 

[Stuxnet]

Originally posted by: R Nilla
I know it would never happen, even if the above was true, but imagine a $250 PS3.

I'd snag one in a heartbeat, just as a backup for the imminent meltdown of my 360. If the PS3 had Live's numbers and a similar controller, I'd make the switch immediately.

 

[brblx]

for as poorly as sony as done with the ps3, i would be willing to bet they'll make it back tenfold on bluray royalties...

 

[Sadaiyappan]

Then how did they still lose 400 million for quarter one of this year?

 

[DaveSimmons]

^ the article in the Seattle Times today (probably from AP) said that restructuring costs were a little higher than the loss, that is without closing plants and "rightsizing" they'd actually have had a slight profit.

You are making the rather bold assumption that he was telling the truth, and that "about 70% roughly speaking" doesn't mean more like 30%.

It's OK for MS and Sony to lie to us customers, but not to financial analysts on the record.

 

[biggestmuff]

What features did they remove this time around to help with the cost reductions?

 

[DaveSimmons]

Maybe they took out the wifi so they can start selling it for $100? </counter-troll>

 

[brblx]

Originally posted by: Sadaiyappan
Then how did they still lose 400 million for quarter one of this year?

i was talking in more a long term sense. people are going to be paying sony for bluray for as long as the format is viable, no?

actually, wait-

according to cnet:
http://news.cnet.com/8301-10784_3-9874317-7.html

Blu-ray has a lot of grandfathers. A lot of people call it a Sony standard but by our estimates Sony doesn't even have 30 percent of the IP," Doherty said. The top four intellectual property holders are likely Sony, Panasonic, Pioneer, and Warner.

so they won't be getting all the money for it, but still quite a bit, i'd assume.

 

[Sadaiyappan]

I was wondering if the PS3 only costs $250 to manufacture now then how could they still lose $400 million?

 

[brblx]

oh. well, those were total losses across all divisions, presumably just reflecting the market downturn as a whole. i havn't kept up with the news enough to know if their console division is still hemorrhaging money or not, though.

 

[Glitchny]

Originally posted by: brblx
oh. well, those were total losses across all divisions, presumably just reflecting the market downturn as a whole. i havn't kept up with the news enough to know if their console division is still hemorrhaging money or not, though.

yes they are still hemorrhaging money out of the games/console division.

 

[Queasy]

Originally posted by: Sadaiyappan
I was wondering if the PS3 only costs $250 to manufacture now then how could they still lose $400 million?

The $250 manufacturing cost is probably just a recent development with the the rumors of the 45nm chips being introduced.

Still, hardware and software sales are down for not only the PS3 but the Wii too. Difference being, Nintendo is in a better position to shoulder the slow sales.