'Teardown' Finds Sony Taking A Bath On Each PS3

Sony is taking a considerable loss of more than $240 per unit on each PlayStation 3 video gaming console, according to a "teardown" analysis conducted by market research firm iSuppli Corp.

The combined materials and manufacturing cost of the PS3 is $806 for the model equipped with a 20-Gbyte hard disk drive (HDD) and $840 for the higher end 60-Gbyte HDD version, according to a preliminary estimate of expenses by iSuppli's teardown analysis service. This total doesn't include additional costs for elements including the controller, cables and packaging, the firm said.

Sony is offering the PS3s—scheduled to hit U.S. retail stores just after midnight Friday (Nov. 18) — at suggested retail prices of $499 for the 20-Gbyte model and $599 for the 60-Byte model. According to iSuppli's analysis, Sony is taking a loss of roughly $241 on the lower-end model and $307 on the higher end model.

PS3's nearest rival, the HDD-equipped Xbox 360 console form Microsoft Corp., has a manufacturing and materials total of $323, based on an updated estimate using costs in the fourth quarter, iSuppli said. This total is $76 less than the $399 suggested retail price of the Xbox 360, according to the firm.

iSuppli said the size of Sony's loss per unit is "remarkable," even for a gaming console. Given the loss it is taking on each unit, iSuppli said it is no surprise that Sony is steering consumers toward the higher-end model.

Source: EETimes

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