Sony cuts PlayStation 3 production cost in half

In a piece primarily focused on Blu-ray over at Business Week, a bit of scrolling led to quite the interesting tidbit: Sony has apparently been able to slash the production cost of its PlayStation 3 in half. More specifically, it was noted that the firm has been able to "shrink the PS3's chips and tweak its design," which aided in getting the cost per machine "to around $400 now, from above $800 just before it went on sale in November 2006." According to Nikko Citigroup's Kota Ezawa, the biggest culprit for such an improvement is the "reduction in the parts count." Still, we wouldn't get our hopes up for yet another price cut just yet, but at least things are moving in the right direction.

[Via PS3Fanboy]

[Paul @ Jan 12th 2008 2:58AM]

Pretty amazing, in just one year they achieve this. I wonder how much the 360's production price is?

[David W. @ Jan 12th 2008 3:14AM]

When they re-add backwards compatibility to the 40gb I'll consider buying, but without that...meh

[David W. @ Jan 12th 2008 3:14AM]

sorry, didn't mean that to be a reply to you

[pigfister @ Jan 12th 2008 6:52AM]

Sony are using Foxconn to manufacture the ps3 so it’s not surprising production costs have lowered using Sweat Shop Labour!

Foxconn purposely employees prominently women from far away villages forcing them to stay in the factory's huge squalid dormitories charging them $25 per month for the privilege, half of the employee’s wages, forcing them to work 15hrs+ days

Foxconn were exposed by Mail on Sunday journalists! But according to China's law slave labour is legal.

http://arstechnica.com/news.ars/post/20060612-7039.html


But is it right to knowingly use SLAVE LABOUR SONY!

[MatthewJ @ Jan 12th 2008 8:21AM]

Foxconn also make the Wii, X-box 360, iPhone and iPod too. Just sayin'

[pigfister @ Jan 12th 2008 8:36AM]

@ MatthewJ

yes foxconn do make hardware for many other companies i cannot comment on what ones but is it right for sony to follow suit and exploit these workers and selling goods made by SLAVE LABOUR!

the "he does it so i can too" school yard BS just isn't good enough i'm afraid, exploiting human beings is exploiting human beings, sony choosing to use them after the public disgrace and world awareness of their company's use of SLAVE LABOUR shows sony's contempt for human lives!

[Poom @ Jan 12th 2008 8:47AM]

pigfiser, I would have respected your comments if you didn't put the cap locks and exclamation... really... Just some suggestions..

[Charles @ Jan 12th 2008 10:13AM]

pigfister says:
“But is it right to knowingly use SLAVE LABOUR SONY!”
“sony choosing to use them after the public disgrace and world awareness of their company's use of SLAVE LABOUR shows sony's contempt for human lives!”

As pointed out Microsoft, Nintendo and Apple all use Foxconn yet you seem only interested in attacking Sony. All but one off the comments in the last two pages of your comments history contain the word Sony and surprisingly none of them are very positive. I get the distinct impression that your issues aren't with Foxconn's labour practices but with Sony and you're just after any excuse to attack them.

[mike @ Jan 12th 2008 10:34AM]

lol you all make me laugh. You use an untrusted source of information to judge that a huge company in china with appearently great relations with big shot corps like Microsoft apple and sony. This is the same news about Nike and their "slave labor" in China. This is so wrong. ABC made a documentary about this kind of labor, and it proved that only the luckiest workers in China work for such factories, because the pay is good and its convenient for them...

[pigfister @ Jan 12th 2008 12:36PM]

@ Charles

the dam thread is about sony reducing costs ffs not m$, apple, ect.

sony are uing a copany that has been publicly seen to use slave labour but regardless of this fact, which is a fact as if you read through the articles the foxconn rep stated that under the countries law this treatment of workers is legal!

@ mike

this is not good for the workers of the country, its a common myth pushed by western companies that it improves their way of life but in reality the WTO destroys their way of life, and sends in the globalist companies to reap the benefits by having a huge workforce to exploit and turn to slaves to make products for US!

Its the central banks, the national reserve, bank of england that control the WTO and force their vested interested interests on third world countries, so you enjoy your PS3 now sony have managed to save a few $$ by using slaves, i suppose they are almost black in asia, so its easier to swallow for you!

[viclauyyc @ Jan 13th 2008 2:18AM]

re: pigfister

If Foxconn is that evil, why US don't ban all they produce? Even these thing is for other company? If they really enslave everyone they work for, you really think they will be enslave for life and they don't have cellphone to call police or no leg to run away?

The worker stay is because they think the pay is fair. I don't think they make 9.95US an hour, but their pay rate is fair in China. Also, Foxconn is a Taiwanese company.

If you hate Sony so much, then go read something else. No point to waste you life here. Your Wii and 360 is waiting for you.



A

[sys_ops911 @ Jan 12th 2008 4:45PM]

exploitation to some is an opportunity to others.

They are fed and sheltered, and still make more than most of the villagers in rural china. Just because you relate it to your life, doesn't mean you are right.

[Patrick @ Jan 12th 2008 7:06PM]

Lies and dishonesty are important parts of exploiting situations. I am unfamiliar with the Foxconn plant, but in many cases the work situation and wages are not communicated with honesty before the employment begins, and there are a number of methods used to get the employees to stay, including, threats, abuse, illegal financial meddling, etc. The company has a surprising amount of control over the employees financially and can extort an employee in a number of ways.

It should not surprise any of you here that exploitation and slavery goes on. Is there anyone here who has not heard of slave goods being imported to one's country? It should not be surprising or shocking or sound like a "conspiracy theory". This stuff has been going on for thousands of years. (That is, apathy, and an eagerness to take one's share of the blood money, not the PS3 specifically.)
If I tell you to stop buying any product that comes from slavery or exploitation, you would call me offensive, an extremist, a hypocrite. You would be right, about they hypocrisy, anyway. This is how historical "atrocities" happen. It's all about priorities.

Sorry, though, what am I talking about? It really is very exciting how cheap the PS3 will be to produce. I will be excited to get it a few years down the road. Some great games I hear.

[Keshian @ Jan 12th 2008 11:07PM]

@pigfister

Have you considered that those "women from far away villages" might have little more than nothing before they went to Foxconn to work in China? And that Sony's employment is a blessing instead of damnation?

And yay for cheaper PS3s.

[KC @ Jan 13th 2008 12:22AM]

OK. So what if Sony uses Foxconn for contract manufacturing? If Sony used them to make the initial PS3s that were more than $800 per unit, and now they have somehow managed to produce them at $400 per unit. Isn't that amazing if the labor cost remained the same?

Or are you thinking that labor is free because all the units are made via slavery? That's totally ridiculous.

One moment you want cheaper electronics, and the next moment you say that you are unwilling to spend more than $400 for a PS3. What gives? Then when "crapgadgets" are announced, they are labelled as useless. But guess who makes those crapgadgets? Do you think those workers are paid more to make the crapgadgets than the PS3, Wii, Xbox, etc?

If you really want to make a difference, stop sitting in your armchair and posting to blogs, but instead, take a plane to China and make yourself heard.

[tealfixie @ Jan 13th 2008 9:21AM]

Here is some perspective:
You call it slavery for them while you're sitting in front of your PC in your comfortable air condition room while these people are working 15+ hours a day sending their wages home to feed their families.

I don't believe it is slavery for one second, do you know how many people would like to work in china and earn any money? if any of these people didnt like the job, there are thousands behind them willing and waiting to fill the position.

Residents work 15 hours a day, 80 hours a week. Forced to work without sleep while on-call and they have to pay for their apartments too. If they dont work, they will never get their reward either... is that slavery?

[Zuke @ Jan 12th 2008 3:03AM]

Hopefully some pricecuts or decent games in the near future.

I'm none too pleased about them nuking the backwards compatibility though. I have too many old games to just dump, and I don't want to have to make room for a rack full of consoles by my TV in addition to all the other components...

[locke6854 @ Jan 12th 2008 8:11AM]

thats what worries me.. "the biggest culprit" in the price reduction is "reduction in the parts count".

Parts COUNT? Not SIZE?

sony, what ELSE did you take out of it? Besides the emotion engine and 20 gigs

[David W. @ Jan 12th 2008 3:15AM]

When they re-add backwards compatibility to the 40gb I'll consider buying, but without that...meh

[Nate @ Jan 12th 2008 3:22AM]

...so buy the sku that has BC. The 40gb is cheaper specifically because it doesn't have the hardware (yes the 80gb still has some PS2 hardware) needed for BC.

[David W. @ Jan 12th 2008 3:34AM]

Just give me the one with the non-hardware bc then...

I don't have the money for the 80gb

[Andrew @ Jan 12th 2008 8:24AM]

Lucky you guys - here in the UK, the remaining SKUs with BC are just about as rare as Wiis! I would by a PS3, but only when they give me everything that they originally promised, and BC comes top of that list. At the moment, it seems that Sony have been able to cut costs in half by removing components that consumers actually want

[producerism @ Jan 12th 2008 8:29AM]

just get the cheaper ps3, then get a used ps2 with that latest USB hack to play backups. best solution.

[Scott @ Jan 12th 2008 9:17AM]

I'd like to see backward compatibility in a cheaper model too. I have a PS2 hooked up and the whole idea is to replace it, not add another system to my setup. I think I'll try to find a 60gb on eBay though. That way I'm not directly supporting Sony's greedy stupidity, but I can still have a PS3

[Kyran @ Jan 12th 2008 12:49PM]

The PS3 is ridiculously huge. They could probably just stick a giant slot in it to slide in a PS2 to use as an Emotion Engine Upgrade Pak. :P

[David W. @ Jan 12th 2008 3:42PM]

@producerism

...I already HAVE a PS2...But I don't want 4 consoles...If I had that mindset I'd have an xbox, a 360, a gamecube, a Wii, a PS2 AND a PS2...it doesn't makes sense. If a Wii at the $250 pricepoint can offer BC than the PS3 should be able too as well

[Carbonize @ Jan 12th 2008 3:19AM]

Sony made a song and dance about the backwards compatibility at the start then totally axed it. Now they have halved production costs they could readd it and still make cheaper units. Do we think they will be passing these cuts on any time soon? No me neither. Or we will get the PS3 mk2 like Sony has done with all it's previous consoles. Aren't we on to version 3 of the PS2 now?

Actually since they have achieved this by reducing the number of components does that mean we can expect smaller PS3s? One thing that put me off the PS3 (apart from the joypad) is the size of it. Well that and I think it's fugly.

[Dave @ Jan 12th 2008 3:24AM]

We're on version 15-or something of the Playstation 2 right now. Not even kidding.

http://en.wikipedia.org/wiki/Playstation_2#Hardware_revisions

[Carbonize @ Jan 12th 2008 3:38AM]

Lol works proxy won't let me view that link. Yeah they are always revising the components to try and save some money and occasionally even improve efficiency. I mean even the 360 has undergone some changes but I believe they have changed the SKU's to reflect this fact. By three I mean changes to the total appearance of the console.

But then how many versions of the Gameboy and DS have there been?

[bob @ Jan 12th 2008 1:01PM]

its not a charity . considering they still arent making a profit i dont see why they would drop the price again. i think more likely will be that they will wait till towards the end of this year so that all thier big games are out and then they might drop if sales are still lacking.

[joshua @ Jan 12th 2008 5:07PM]

You anti-Sony kids are insane. Asking if they will "pass the cuts on any time soon" sarcastically? DUR ITS $100 CHEAPER WITHOUT BC! They have been passing on the cuts since day one. And David W. bitching about how they dont have BC in the 40gb model, then bitching about how he can't afford the 80gb.

Once again, you guys are insane. Get over it.

[Carbonize @ Jan 12th 2008 5:29PM]

"You anti-Sony kids are insane"

Yes I am so anti Sony I own a 42" HD Bravia, a PSP, a Sony Ericsson mobile and my kids have a PS2 and a PS3.

Moron.

[caramelzappa @ Jan 12th 2008 3:23AM]

I don't see why backwards compatability is a big issue. If you have a bunch of ps2 games you actively play, keep your ps2, if you don't want to, sell it and buy the more expensive ps3.

I'm waiting for some strong system sellers for the ps3. So far all the titles that I've been interested in are multi-platform and for the most part those end up better on the 360 thanks to the ps3's cell broadband fanciness. It's a very capable machine but I'm not ready to invest in one until developers are ready to make some real quality games on it. Dead Rising, Gears, Halo, COD, have really pushed the 360 forward but there are few titles that really shine on the ps3. I've never been a final fantasy fan so I don't have that to look forward to. Metal Gear looks like the only title that's promising. The 360 is building up quite a library of games, and the wii now with Galaxy, Metroid Prime 3, and Brawl soon is also bringing in some strong titles. Hopefully for sony the ps3 can get some strong titles as well.

[stephenbratz2 @ Jan 12th 2008 4:31AM]

It is not a big deal. The problem is that when the PS3 was introduced, Sony (and the fans) talked about the "other" system that had emulated BC, how horrible that was, and how the PS3 was superior because it had the hardware to do it natively. There were also other promises made by Sony - such as dual HDMI, I read something today about a promised 3 GB Ethernet ports, multiple colors (grey, white, black), as well as many other features. We have seen these features either removed, or not happen at all.

When Blu-ray was detailed, we were told how great it was because it had Java built in and the studios could create wonderful extras for the movies we watch. But when it was announced there would be different profiles, and you had to have the right player to watch those extras, we were told that the extras were not important, and why do we want that "crap". When profile 1.1 was released, the forums were filled with "wow, this stuff is great", but when it was brought up that HD DVD had this from the beginning, we are told that HD was crap, but for BD it was great. Now everybody is looking forward to profile 2.0 on BD, while saying that the crap is not needed when HD having those same features from day one is useless. But when each episode of POTC is shipped on 2 disks to add extras, it is great, but when HD uses 2 disks, it is because of space restrictions. When it was rumored that Paramount was paid $150MM, and they denied it, BD people said they were lying. When it was rumored that Warner and Fox took $500MM each, it was either they denied it so it is not true, or it is just business and was OK.

The fanboys do not help. They complain about how the 360 has too many different versions (SKUs), and how are people to know what version they should buy. When really the only difference between them are the color, and if it has a hard drive and the size of that HDD. With the PS3, we have different HDD sizes, some have BC, some have memory card readers while some do not, some have wireless some do not (and while talking about wireless, the 360 not having it was not an issue until the 20GB version was dropped). Are there too many permutations of features on the 360? Possibly, but the same can be said of the PS3. But the differences on the 360 are blown way out of porportion compared to the PS3.


I have a 60GB but only use it for BD movies, not for games, so BC for me is useless. The PS3 is an amazing machine, no doubt about it. But when the competion is demonized for not being as good as a PS3, and months later we are told that those same features were not needed, then it leaves a bad taste in the mouth of those who use the competion or those who are just looking for a good gaming experience. I support the 360 and HD DVD over the PS3 and BD (even though, as I said, I use all). How the console/disk format wars have unfolded, has turned me away from the PS3 and BD as a gaming platform/disk format. I may be forced into using BD, but because of all that happened I will not be using PS3.

[Jakob @ Jan 12th 2008 6:52AM]

Yes you're right, and thankfully not a Xbox or a Playstation "fanboy".
It doesn't makes sense to introduce the Blu-ray Profile 1.1 to the PS3, when it's capable of 2.0, but I still think a majority of the people just watch the movies, and sometimes the specials. But for us nerds it is a cool feature.

I don't understand people complaining about different SKU's, I love choices!

[MatthewJ @ Jan 12th 2008 8:31AM]

stephen, you make a convincing argument, except its all very "personal" in that you have to be aggrieved that Sony broke these promises before you can really care about the arguments. Personally, I wasn't interested in the Seventh Gen of Games Consoles before about October 2007, so I haven't heard many of them, nor am I that bothered that they haven't been met, I'd just rather look to the future and be optimistic, which is currently how that future looks.

Its kind of the same thing as being disappointed by games with no firm release dates getting "delayed", LittleBigPlanet for instance. A lot of people are disappointed that its not out till September, but I wasn't expecting it out anytime soon because no-one said it would be, so therefore I'm not disappointed, but actually looking forward to its release!

[whowhatme @ Jan 12th 2008 3:37PM]

Actually, Sony really needs to get their PR under control. They just sound like a really arrogant company that changes their tune whenever it's convenient. They need to stick to what they say, or at least admit what's going on upfront, instead of pretending like they can read consumers' minds, and know exactly what we 'want', 'don't want', or 'need'. Seriously, every time I hear about another one of their PR slips, it makes me like them less and less.

[Peacock1 @ Jan 12th 2008 8:56PM]

'It's a very capable machine but I'm not ready to invest in one until developers are ready to make some real quality games on it. Dead Rising, Gears, Halo, COD, have really pushed the 360 forward but there are few titles that really shine on the ps3. I've never been a final fantasy fan so I don't have that to look forward to. Metal Gear looks like the only title that's promising.'
-----
Yes the future titles for the Playstation 3 look rubbish.. other than;
Killzone 2
Haze (360 version has been scrapped)
Little big planet (think classic [2d] mario meets design your own levels and share them)
Home(think free version of second life - the ps3s answer to achieve ments)
Grantrismo 5
Metal gear 4
Final fantasy 13
Final fantasy versus 13
A team incognito game is extected (creators of warhawk and rag doll nija[i think])
Infamous
Jak and daxter: The lost frontier
God of war 3
Motor storm 2 (expected to be annouced soon)
Resistance 2 (confirmed yesterday 60 player online, 8 player co op, 2 campanes, partially randomised geomitry[the levels wont look exactly the same every play through] moblie phone quality chat, graphics to rival kill zone 2, online battles have 'classes', like in COD4, dedicated servers [none of that peer to peer stuff that microsoft makes people pay to do] great developers - isomniac who have always devilered...)
- all of the above games have the potential (and are very likely) to be system sellers(AAA), and these are only the ones we know about. There are also plently of other above average games coming out next year like Afrika...

As for current games- COD4, UT3, Folklore, Ratchet and clank, Uncharted, Warhawk are all 9/10 games in my opinion. Then theres the 'not as good but still better than most' list of games like Sing star, the eye of judgement, heavenly sword and LAIR (if you can get over some minor control faults). Early titles like Motor storm 1 and Resistance 1 are still very fun. Add to that the list of PSN titles like super stardust HD and Everyday shooter The extra content for games being made avalibe for games over the PSN and you have a great console...

lol sorry. im sick of hearing 'the soney has no games line now'.. when they clearly do... at the end of next year i fully expect soney to be infront of microsoft in terms of sales. I belive that SOney will cut prices of its consols around august / october, when killzone 2 will be released, intime for the build up to christmas.

Oh btw.. all these games are exclusive, expect COD4, and UT3 (which is timed)

extra btw... rumble is back this year :D

[spiderpig @ Jan 12th 2008 3:24AM]

so production costs are finally around $400 per machine for the 40gb (since they are discontinuing the 20 and 60gig). What happens if you add wholesaler cost, retailer cost, logistic cost (transportation + storage), marketing cost, and promotion cost (free 5 bluray discs) and management overhead cost?

[h0mi @ Jan 12th 2008 11:02AM]

And what are the prod costs of the 80gb model, which could easily be phased out if it doesnt sell much?

[Hung @ Jan 12th 2008 11:23AM]

Nothing.

Did you notice that the original manufacturing cost was about $800/unit? If you remember, the PS3 MSRP'd $600 for the top end when it was released. What will happen to the price when factoring in sales costs? Very little. Sony isn't trying to break even by lowering console costs. Consumers don't want to pay an arm and a leg for a system; they prefer to blow money on games that cost less than $10 to make and develop but sell for $60.

But seriously, did you notice the $800/unit figure? Outside of eBay, I haven't heard of anyone selling them for over $800.

[AJ in the East Bay @ Jan 12th 2008 3:41AM]

So does that mean a standalone should come down in price as well, perhaps close to $150?

[Zorque @ Jan 12th 2008 3:48AM]

So what features are they axing this time? Blu-ray? Controller support?

[hemmy @ Jan 12th 2008 4:07AM]

economy. of. scale.

[Garst @ Jan 12th 2008 4:09AM]

I don't think they'll axe anything for the next one; they'll make the A/V cable a propritary cable that can only be on new television that are coming out. Just like everything they only put memory stick card slot on all their electronics.

[pilot101 @ Jan 12th 2008 3:55AM]

People have a good point that there are very few mutliplatform games that are better on ps3 compared to xbox 360. I guess for me, I am a diehard tekken fan that's why i would want a ps3. I'm really hoping they will make somekind of ps3 slim with smaller system and cheaper price soon. But Godknows when that will happen.

[Jonathan M. @ Jan 12th 2008 4:56AM]

uh... got the cliff's notes version of this comment?

[Joel Stephen @ Jan 12th 2008 5:02AM]

Can someone please explain to me why if its so expensive to put full reverse compatibility in the PS3 then why is it so cheap to make the PS2 and moreover wouldn't it be cheaper just to put the EE+GE of the PS2 in the PS3 rather than run--I'm assuming--a separate production facility to manufacture the PS2, then ship and promote the PS2?

Since Sony is unlikely to put back full reverse compatibility in the PS3 Sony should come up with a USB dongle that has the necessary hardware to provide full reverse compatibility to the PS3 though there are probably all types of hardware issues that makes that an impossibility but its a thought.

[Viva La MaTTT @ Jan 12th 2008 5:02AM]

who needs playstation when u have Xbox?

[Carbonize @ Jan 12th 2008 5:39AM]

Hmm to play Blu Ray movies? To play Tekken? To Play Resistance? To link up with their PSPs?

And no I'm not a Sony fanboi. I actually own a 360 but like to think I am intelligent enough to see the good and bad in everything and not make stupid inane comments.