PS3 manufacturing costs drop by 70%

Sony Corp’s CEO and Executive Vice President, Nobuyuki Oneda, revealed, while speaking at the company’s Q1 (first quarter of the year) earnings call yesterday, that the cost of manufacturing the PlayStation 3 has dropped by a massive 70% since its arrival in 2006. Despite not knowing the exact manufacturing cost, the general idea was that the PlayStation 3 originally cost Sony approximately $800 (R6245.18 round about) per unit. Then in January of 2008 it was reported that the manufacturing costs were less 50%, costing about $400 (R3122.59) per unit. Although Sony won’t discuss exact figures, “need to know” and all that, the now 70% decrease implies that costs have dropped to about $240 (R1873.56) per unit.

When asked about the manufacturing costs Nobuyuki Oneda replied with: “The cost reduction since we introduced the PS3 is very substantial and this is on schedule. We don’t disclose how much of the PS3, specifically the cost deduction was achieved during the past two years.  But that is on schedule.” When pressed further he stated: “About 70%, roughly speaking.”

Simply put, if you’re not entirely sure of the above, since the manufacturing costs (to produce a PS3) have been reduced by such a large amount, it now means that Sony are making a profit on every PS3 sold instead of a loss, which they were originally making.Ultimately, this means that Sony can, at this point, make a welcome price cut for the Playstation 3 this year. It was said by TotalVideoGamers that, if Sony wanted to, they could drop the price by about $100 (R780.65) and still remain in the comfort zone. Well, that’s that, and all we can do now is sit back and hope Sony makes the announcement for the PS3 price cut soon. I’m pleasantly surprised, if the above is true, that the cost of producing PS3s has dropped so much.