PS3 manufacturing costs cut 70%, price drop coming soon!

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During a conference call for overseas investors following Sony's Q1 09 financials, Nobuyuki Oneda Sony Corp's CEO and Executive Vice President has revealed that manufacturing costs of the PlayStation3 have dropped by 70%.

"The cost reduction since we introduced the PS3 is very substantial and this is on schedule," Oneda-san replied when asked about manufacturing costs. "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."

"About 70%, roughly speaking," Oneda-san added when pressed further on the matter.

Although a precise manufacturing cost isn't known, it's widely believed that the PlayStation3 originally cost Sony approximately $800 (£485) per unit. In January 2008 reports surfaced that the manufacturing costs had been reduced by 50% to approximately $400 (£243). Although Sony wouldn't elaborate on exact figures, the 70% decrease suggests that costs have come down to around $240 (£146) per unit.

The 80GB PlayStation 3 currently retails for £299.99, $399.99 (£243), and 39,980 yen (£254) in the UK, US, and Japan respectively, which suggests Sony has room to make the widely rumoured $100 price cut.

I smell a price drop coming. :D

So, are they still losing money?aaronmullan

[QUOTE="aaronmullan"]So, are they still losing money?SoulEater30

Maybe I should change the thread title to something more hostile..

Maybe I should change the thread title to something more hostile..

SoulEater30

Excellent news! I hope SONY does well for the rest of the generation. :)

[QUOTE="SoulEater30"]

Maybe I should change the thread title to something more hostile..

aaronmullan

Good for Sony.

I guess things are as DIRE as the 14 year olds I've spoken too have led some to believe.

[QUOTE="aaronmullan"]

[QUOTE="SoulEater30"]

Maybe I should change the thread title to something more hostile..

SoulEater30

If its true I hope they bring out a slim model! Although one better looking than the ones I have seen :P

Awesome. Even if they lower it to $300, they'll still make $60 a unit.chapnzaba

Doesnt work like that. Retailers need to make money as well. I think they would be lucky to break even i.e not lose money on every PS3 sold. They are a 1-2 years away form making a profit on each console sold.

Wow so right now they are actually turning a pretty big profit for each one. I mean if they only cost 240 to make than thats 160 off of the 80GB ones.

I can see them trying to ride this wave as long as possible so they might not want to reduce the price just yet. With a 100 dollar price cut their profits are reduced quite a bit. But it might spur sales.

Good news :)

is this legit? I want this to be true but i doubt Sony is making $160 a pop on each ps3.

Excellent. Now its time for Sony to stop the bleeding. Although they probably won't turn any profit this gen from PS3 I just hope that they don't make a substancial loss in the end. As for people wondering about price cuts. Sony needs profitability before it needs price cuts. Say no to yo price cuts.

Awesome. Even if they lower it to $300, they'll still make $60 a unit.chapnzaba

[QUOTE="chapnzaba"]Awesome. Even if they lower it to $300, they'll still make $60 a unit.themyth01

EDIT even if you say it costs $250 to make, you also have to add in packaging, shipping, retailers cut, etc. Sonywon't be making anything on units.Without knowing more its impossible to say, anyways any cost reduction is good news for Sony.

[QUOTE="themyth01"][QUOTE="chapnzaba"]Awesome. Even if they lower it to $300, they'll still make $60 a unit.blue_hazy_basic

EDIT even if you say it costs $250 to make, you also have to add in packaging, shipping, retailers cut, etc. Sonywon't be making anything on units.Without knowing more its impossible to say, anyways any cost reduction is good news for Sony.

[QUOTE="blue_hazy_basic"]

[QUOTE="themyth01"] If manufacturing costs were the only costs associated with a product then that may be the case. But at $300 a console they'll probably still be losing money per console. They're losing money on the PS3 right now then their manufacturing cost is supposed to be much less than price. KingAsmodai

EDIT even if you say it costs $250 to make, you also have to add in packaging, shipping, retailers cut, etc. Sonywon't be making anything on units.Without knowing more its impossible to say, anyways any cost reduction is good news for Sony.

And? You think people in large companies don't fudge truths and numbers?

They probably misheard him. Didn't Sony's latest earning report say they lost $400 million from gaming. How could that be if they're making $160 on each console?

Either they're lying now, or they've been lying for a while. How long have the production costs been this low?

This is all false.Stevo_the_gamer

Sony needs profitability before it needs price cuts. Say no to yo price cutsThe__Havoc

lol, i really dont think Sony's CEO would lie to its investors. Nonstop-Madness

[QUOTE="The__Havoc"]Sony needs profitability before it needs price cuts. Say no to yo price cutsnervmeister

No because I can't hear words on a screen.

[QUOTE="Nonstop-Madness"]lol, i really dont think Sony's CEO would lie to its investors. Stevo_the_gamer

Yeah because developments in manfacturing and the resulting costs therof are predetermined and easy to predict right? :roll:nervmeister

[QUOTE="aaronmullan"]So, are they still losing money?SoulEater30

"He's putting pressure on me, and I'm putting pressure on him. That's the nature of business. ... [But] I lose money on every PlayStation I make--how's that for logic?"

Howard Stringer CEO Sony July 2009 http://www.gamespot.com/news/6213105.html

What this is likely refering to is a future SKU that is not yet released.

£200 or less and ill buy one

wait i dont understand. if the 80gig is worth 240 dollars, then they were just pretending that they were losing money on each console for the last 6 months ?Androvinus

[QUOTE="Androvinus"]wait i dont understand. if the 80gig is worth 240 dollars, then they were just pretending that they were losing money on each console for the last 6 months ?Stevo_the_gamer

Because you have some sort of evidence to disprove this article right? To disprove the executive who was quoted right? Or is it just your gut feeling?

For someone who loves to complain about the price of the PS3 here is some news that may lead to a price cut but your so quick to call BS on it. Last I check their math is right. They might not be making any profit because we have no idea on shipping, handling, and what cut retail gets.

But they have reduced manufacturing costs signifigantly unless you have some proof otherwise? I'll wait.

Because you have some sort of evidence to disprove this article right?

XturnalS

Hmm. Yep.

[QUOTE="XturnalS"]

Because you have some sort of evidence to disprove this article right?

Stevo_the_gamer

Hmm. Yep.

LOL your article has no bearing on the current situation. If it did cost 450 back in Jan. they still managed to reduce the costs to make it. Just because Stringer said in they aren't making a profit doesn't mean they haven't reduced costs. Again we have no idea what the shipping, packing, and retail cut are.

Is that hard to understand? So show me some proof that they haven't reduced costs. Because right now you got none.

*Who is right and who is wrong. Interesting indeed. Might have to root for Stevo because he is funny. But above all else I root for the truth*

LOL your article has no bearing on the current situation. If it did cost 450 back in Jan. they still managed to reduce the costs to make it. Just because Stringer said in they aren't making a profit doesn't mean they haven't reduced costs. Again we have no idea what the shipping, packing, and retail cut are.

Is that hard to understand? So show me some proof that they haven't reduced costs. Because right now you got none.

XturnalS

Sure it does, this article says that costs were lowered in January of 2008 to 400 -- my article comepletely disproves that nonsense. Secondly, that article says that Sony is making money off each PS3 sold -- blue hazy basic's article completely proves that false.

Therefore: common sense dictates that that article is bullocks. By the way, I never said they haven't decreased costs, what I have been saying is that they haven't reduced costs at the level that this article is suggesting.

Good news.:D

It's sad to see Sony losing so much money on each PS3.:(

I think Sony might be on to something.

[QUOTE="XturnalS"]

LOL your article has no bearing on the current situation. If it did cost 450 back in Jan. they still managed to reduce the costs to make it. Just because Stringer said in they aren't making a profit doesn't mean they haven't reduced costs. Again we have no idea what the shipping, packing, and retail cut are.

Is that hard to understand? So show me some proof that they haven't reduced costs. Because right now you got none.

Stevo_the_gamer

Sure it does, this article says that costs were lowered in January of 2008 to 400 -- my article comepletely disproves that nonsense. Secondly, that article says that Sony is making money off each PS3 sold -- blue hazy basic's article completely proves that false.

Therefore: common sense dictates that that article is bullocks. By the way, I never said they haven't decreased costs, what I have been saying is that they haven't reduced costs at the level that this article is suggesting.

Really it says they are making money off of it? Because I don't see that anywhere in the article care to point it out? And it clearly says that reports came out. The article clearly states that no exact figures are known. Even the breakdown on in the article you mentioned isn't entirely accurate and they even acknowledge that.

So again no evidence to suggest that they haven't reduced to what they say they have. And going by your article the original PS3 cost 840 to make if they are right then and about the 440 costs than 70% or 840 is 588 subtract that from 840 and ta-da its 252.

Men Lie, Women Lie, Numbers don't.