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Sony's $89 Cell processor
iSuppli calls the PlayStation 3 an "engineering masterpiece"

While Merrill Lynch may be one of the few firms projecting a win for the Xbox 360 by 2011, a new cost analysis for the PlayStation 3 puts a few more things into perspective with regards to the next generation console battle.

It looks as though Ken Kutaragi was right when he stated that the PS3, which will be priced at $499 and $599 respectively in the United States, is probably "too cheap." According to a new cost analysis by iSuppli, Sony will lose $307 for every 20GB PS3 it sells and $241 for each 60GB version. "With Sony taking a smaller loss on the higher-end model, it's not a surprise the company is steering customers to the 60Gbyte version," said iSuppli. For the United States, 20GB PS3s will account for 20% of the sales mix while the 60GB versions will take the remaining 80%.

Although its initial losses with the PS3 will be large, Sony co-chief operating officer Jack Tretton points out that the original PS and the PS2 became "incredibly" profitable after taking massive losses at launch.

iSuppli summed up it results by stating “While many fret over the high cost and price of the PlayStation 3 compared to the competition, iSuppli believes the console provides more processing power and capability than any consumer electronics device in history. Because of this, the PlayStation 3 is a great bargain, well worth its $599 price and $840.35 cost, iSuppli believes."

Microsoft, which was once seeing red to the tune of $153 per unit sold, is now making a profit of $75.70 on each console before marketing and distribution costs a year after launch.

Nintendo has already stated that it will make a profit on every Wii that it sells. Given that CompUSA lists its cost for the Wii at $237.50, Nintendo's actual costs are likely closer to the $200 mark. That shouldn't be too surprising given that Microsoft's Richard Teversham likened the Wii to a Gamecube with a DVD drive (someone should tell Tevesham that the Wii doesn't actually play DVDs…for now).

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RE: Sony seems out of luck when you run the numbers
By SunAngel on 11/17/2006 12:31:06 AM , Rating: 0
Thanks for joining us in the real world.

Now, you have a better understanding of why some patrons of DailyTech voice their opposition to DailyTech when they demean Sony.

We all are having hard times. A little more brotherly love and we can all get through this life unscaved and peaceful.

Enough said, I'm going to pick up my PS3. See you all online.

By Viper007Bond on 11/17/2006 12:35:41 AM , Rating: 3
Too bad Sony's online stuff is a joke still.

<3 XBox Live

By akugami on 11/17/2006 5:12:38 PM , Rating: 2
The old bogeyman is out to get you routine again? Seriously, how many times have places whether it's a magazine, traditional news site, blog site, etc get accused of bias? 95% of the time, these places are only reporting the news or giving their opinions if it's an opinion editorial piece. Even the Official Playstation Magazine thought the $500-600 price of the PS3 overly expensive and their a vehicle for pro-Playstation propaganda.

Take EGM. I know they are on the fanboyish side in regards to video games and many feel their reviews are not strict enough but over the course of years, they've been accused of being pro and anti Nintendo, pro and anti Sega, pro and anti Sony and who knows what else. It never occurs to the fanboys that maybe, just maybe, these guys are only saying what's on their mind and reporting what news they find. Just as Dailytech is.

"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il
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