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16 Nov 2006
Sony's next-generation PlayStation 3 has been given the thumbs up by electronics industry research firm iSuppli, which describes the console as "an engineering masterpiece".
The firm dismisses the fact that Sony's offering has been plagued by delivery delays and is hugely more expensive than its nearest rival, the Xbox 360 from Microsoft.
"The PlayStation 3 offers the performance of a supercomputer at the price of an entry-level PC," said Andrew Rassweiler, a services manager and senior analyst at iSuppli.
According to a new "teardown analysis" from iSuppli, the combined materials and manufacturing cost of the PlayStation 3 is $805.85 for the model equipped with a 20GB drive, and $840.35 for the 60GB version.
This total does not include additional costs for elements including the controller, cables and packaging.
At these costs, Sony is taking a considerable loss on each PlayStation 3 sold, the analyst firm noted.
Materials and manufacturing costs for the 20GB model exceed the suggested retail price of $499 by a total of $306.85, iSuppli's analysis service estimates. For the 60GB version, costs exceed the $599 price by $241.35.
In contrast, the HDD-equipped Xbox 360 has a manufacturing and materials total of $323.30, based on an updated estimate using costs in the fourth quarter of 2006. This total is $75.70 less than the $399 suggested retail price of the Xbox 360.
It is common for console makers to lose money on hardware, and make up for the loss with game sales. But the size of Sony's loss per unit is remarkable, even for the console business, according to iSuppli.
"The reason why the PlayStation 3 is so costly to produce is because it has incredible processing power," said Rassweiler.
"If someone had shown me the PlayStation 3 motherboard from afar without telling me what it was, I would have assumed it was for a network switch or an enterprise server."
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