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PLAYSTATION 3 (PS3)
at 6:32AM PST on August 25, 2009.
RE: Analysts: Sony lose $100 per PS3 Slim
The slim probably costs a bit more to make. But for some perspective....
Imagine when they drive the 220$ cost down 70% in over the next 5.
(a new FAB's value in terms of production increases exponentially over time, but potential efficiencies are harder to gain).
Assuming the same cost inroads can be made in 5 years...(slightly more than the original PS3 model) that $220 cost in YEAR8 will be down to 53$ to produce a PS3 in 2014.
If in fact Sony is selling the Slim at a slight loss, let's assume is cost of production to be $330. Let's also assume Sony is unable to optimize as much as they have with the PS3 Orig (let's say 60%).... They will sell at a small profit at a future 199$ pricepoint 2012, and production costs I estimate to be $108 in 2014, based on the figures we have currently.
I think Sony will reduce costs much more than 60% over 3 years (we should assume at least 20% in component cost reduction per year on avg thanks to Dr. Moore) and this doesn't even take into account a 35nm or 27nm process in the PS3s future.
Much has been made of Sony's decision to sell at a loss. I think it was a better decision than delaying the PS3 in the face of the upstart Microsoft.
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