PS4 Costs $381 To Make

By William Usher 2013-11-20 10:31:37 discussion comments
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A new report has been making the rounds on most gaming sites, citing the total costs of production of Sony's latest generational home entertainment console. So how much does it cost to build a PlayStation 4? Try $381 on for size.

Shacknews spotted the news from AllThingsD, where they picked up the report from IHS iSuppli, a company known for breaking down hardware and giving estimates on the parts used in some of the more popular tech devices permeating the market.

Andrew Rassweiler, an analyst with IHS, and one of the bright individuals who was on hand to see the teardown and pricing of the PS4, mentioned that...
“If Sony could build the PS4 for a lower cost it would do so, but if history is any indicator, it would also lower its retail price,”

Previously, gamers should blatantly remember that Sony was bleeding money with the PlayStation 4 like Channing Tatum was bleeding from an old or a new orifice while attempting to emulate Jean-Claude Van Damme in the latest clip from 22 Jump Street.

The PlayStation 3 cost a whooping $805 to produce while only carrying a price tag of $599. Actually, that's not just bleeding money, that's a financial artery that's cut and left open to flow. It's almost like putting GTA V on torrents without preventative DRM in place... oh wait, that did happen on home consoles!

The PS3, even in 2009, cost $336 to produce while selling for $299. A lot of it was thanks to the ridiculously expensive Blu-ray drive and Cell technology (which had “power” worth unlocking like the Cloud has “infinite power” ready and waiting to be utilized.)

Anyway, the PlayStation 4 is a much leaner, much cheaper and equally mean machine. The cost of the APU is its most expensive component, running on the 28nm base, the chip costs Sony a hefty $100 per unit. That GDDR5 RAM that everyone keeps clamoring over as the most expensive thing ever? Only $88 per board. There's a $37 Seagate 500GB hard drive and an optical drive (still Blu-ray) that clocks in at $28.

That DualShock 4 that costs a hefty $60 per pop? Well, that's about $18 in parts to manufacture.

Rassweiler commented about Sony's new take on bridging the component costs to the price of retail, stating...
“If your cost is within $10 to $20 of the retail prices, there’s very little chance you’re making a profit on the console,”

Yeah but who buys a console without games? Well, unless you get your PS4 and only play Warframe or Blacklight or War Thunder... but still, most people buy real retail games with their brand new console, and that's where Sony makes the real profit. Gaining a small royalty fee on every physical piece of PS4 media sold nets them a nice little income on top of the costs they've cut with producing the PS4.

The real story is how much Sony makes on royalties with software sold per every unit. Nintendo was cleaning house on that front with the Wii given the high attachment rate to first-party software (although they kind of failed on the third-party front due to having piss-poor third-party support). I guess we'll find out just how much Sony makes with every system and software title sold, once we get an estimate on the software attachment rate for the PS4.
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