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Later in the year the Xbox add-on HD DVD player was actually made available.
In March 2007, Sony disclosed their plans to release a new model of the PS3 console
with 80GB capacity.
In April 2007, Sony decided to discontinue the US distribution of the 20GB version of
the PS3. Over 90% of PS3’s sales were generated by the 60GB model. The 20GB
version would still be supported by Sony, and will still be offered for sale in Japan.
How Much does the PS3 Actually Cost?
In November 2006, upon the introduction of the PS3, CNET provided an estimate of
the actual cost of the console and its parts to help put in perspective the effort that
Sony was doing to bring this console to market successfully for the gaming market
and for the Blu-ray format.
CNET estimated the total cost of the console as follows “The game console might
cost you $499, but it's got $806 worth of parts and manufacturing behind it, a
research firm says”.
CNET continued, “The cost of manufacturing and materials for the low-end, 20GB
version of the console comes to $805.85, iSuppli said in a report Thursday. That
means that for every PS3 Sony sells for $499, it will lose $306.85 on components
alone. Marketing and advertising costs would then boost the actual cost to Sony even
higher.
The PS3 with the 60GB hard drive comes with a manufacturing and component bill of
$840.35. Since it sells that version of $599, the component bill exceeds the retail
price by $241.35, iSuppli said. A Sony representative would not comment on the
PS3's manufacturing costs.”
Other analysts estimated the manufacturing and material costs for the PS3 between
$725 and $905.
Merrill Lynch was quoted as saying “the PS3 manufacturing and materials cost could
drop to $320 in three years”.
It is known that video game consoles manufacturers subsidize the hardware to
recover the investment by selling expensive game software, but in this case the
console has a feature that would facilitate the Blu-ray format establishment, an
important matter for Sony.
In comparison to the other format, in Nov 06, the Xbox manufacturing and materials
cost $323.30, the box itself sold for $399. CNET said, upon introduction “the
manufacturing and materials costs for the box came with a component bill between
$501 and $525”.
CNET added “The higher costs for the PS3 are largely driven by the expenses
associated with the Blu-ray Disc drives and the custom chips used inside the
machine. The Blu-ray drive costs $125, while the Cell microprocessor likely costs
about $89. The reality synthesizer, a graphics chip from Toshiba designed for the
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