PS3 manufacturing costs reduced by 70%
Following the poor PlayStation sales results for Q1 of this year, Sony held a conference for overseas investors and Nobuyuki Oneda, CEO of Sony and Executive Vice President, made an interesting comment about manufacturing costs for the PlayStation 3.
When the PS3 launched in North America and Japan back at the end of 2006, costs for producing PS3s were said to be around $800, when in fact Sony were actually selling the console at a loss for up to $599 in the US.
According to Oneda, the company’s manufacturing cost reduction exercise has been very successful:
The cost reduction since we introduced theÂ 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.Â But that is on schedule.
When pushed further, he commented that costs had been reduced by “about 70%, roughly speaking”.
In the space of two and a half years, that is a dramatic reduction in costs and calculate to PS3s costing around $240 to build today, which sounds unrealistic.
If however this figure is in fact accurate, this means that Sony have more than enough room to reduce the price by $100 and still make profit from every unit sold.
Of course there are other costs that Sony has to cover including shipping and marketing, but there is no doubt potential for a price cut before the end of the year – We will have to watch this space.