In a report that could send shock waves through the video game industry, market research firm iSuppli has detailed the real cost and new savings found in Sony's second-generation Playstation 3.
iSuppli's report, issued Monday, says that the current PS3 model contains 2,820 individual parts, including Nvidia's Reality Synthesizer, IBM's Cell Broadband Engine, and Toshiba's I/O controller, which are now made using 65-nanometer process technology, compared to 90-nanometer technology formally employed in the previous iteration. That has drastically reduced the PS3's power supply cost by 30 percent from $30.75 to $21.50.
Kionix's three-axis accelerometer in the PS3 controller has replaced the Hokuriku Electronic Industry Co. part, saving Sony an estimated $1.45 per unit.
But perhaps the most important cost savings is in the console's vaunted Cell processor from IBM. According to iSuppli, the latest PS3 includes a new version of IBM's Cell Broadband Engine, which is priced at $46.46 -- 28 percent lower than its original cost in the first-generation hardware. A new version of Nvidia's Reality Synthesizer, the console's GPU, at $58.01 per unit is now priced 30 percent lower than it was in the first generation.
Altogether, Sony's second-generation PS3 features a 35 percent total cost reduction from the first-generation model. In dollars and cents, today's PS3 costs Sony about $448.73 to produce, compared to the old model's $690.23 price tag. That said, the lower cost doesn't include software, box contents, and royalty expenses.
Realizing that, and considering the PS3's current price tag of $399, iSuppli has found that Sony is still losing money with each sale of its console. But Andrew Rassweiler, director and principal analyst at iSuppli, believes Sony may be able to break even in 2009.
"With its new-generation PS3, Sony has come closer to breaking even, although it probably hasn't quite reached that mark yet," Rassweiler said in a statement. "With iSuppli's estimated PS3 cost at $448.73, the product retailing in the United States at around $399 and taking into account other expenses, the PS3 may be able to break even in 2009 with further hardware revisions."
Great, but is that enough time? With Microsoft and Nintendo outselling Sony's console each month with ease, Sony's window of opportunity is almost closed.… Read more