Sony’s PlayStation 4 Costs $381 to Build — Only $18 Under Retail Price — in Teardown

[DPatel304]

AllThingsD got an early look at the analysis, in which the firm estimates the cost of those parts, plus what it costs to assemble them, at $381. That is only $18 shy of the PS4′s $399 retail price, leaving Sony little profit margin on the sale of the device itself.

Even though the article says that's pretty low in comparison to something like the iPad, for a console, that is really good. I believe every other Playstation has sold for a loss and both previous Xboxes did as well. It's a little hard to believe this number, but, if it is true, then Sony did a really good job at pricing the unit at something that will be fair to both consumers and their business which is great news. Of course, these numbers are just estimates and they don't take into account all the R&D and other costs that go into creating a new console, so Sony still has a lot of money to make up, but they are in a really good position at the moment.

 

[mareebaybay]

I told a lot of my friends that the PS4 was totally worth it. I knew they weren't getting over on use, and it actually took about the same amount of money to build the system. I mean usually with electronics it takes about the same amount of money to build a system.

 

[WarriorSoldier]

Wow, technical, I like it! that's pretty kickass! They have to make money some how haha, Sony is awesome.

 

[Linkzelda41]

Definitely sounds fair compared to other products like Apple where you can literally get the same quality for a refurbished item that's half the price or even more than that. I wonder how the other console fan boys will react to this small marginal profit Sony is getting though.

The main concern is when prices drop later on in the years, though I doubt they would have to worry about creating new stock after 1-2 years I guess.

 

[themarting]

When it comes to consoles though it usually costs more to build than what they sell for. they usually make it back on licensing fees. If this is accurate then sony is lining its pockets majorly haha

 

[baracksyndel]

It's great news for Sony really because from what I understand they sold the PS3 at a major loss per each unit. I still don't think that they made any money, so it's good that at least they'll be able to recoup some major financial losses with the PS4. Their not like the Xbox division where they have a company behind them that has more than enough cash to support a failure, or even Nintendo who have so much saved cash that they can afford another two or three console failures before they're in trouble financially. I really want this console to do well because we need the big 3.

 

[sidd230]

I don't see anything surprising.

Its a norm to sell consoles for a loss and make up on games.

 

[WarriorSoldier]

hmm, didn't know that Sidd, makes sense to me though.

 

[erronousRogue]

No wonder they managed to get in a 100 USD price cut under the Xbox One. With design, employment and shipping costs, an $18 price difference is downright amazing (especially when you compare it to prebuilts and Apple products). They'll probably make some money back on licensing and various accessories/online services, but that's still pretty honest business practice.

Come to think of it, that could also explain why they had to go with a PSN+ requirement for some of the online stuff, they wouldn't break even otherwise.

 

[dragoonblade]

The loss size really depends though. I mean the PS3 losses hurt them pretty badly and put them in a position that they need the PS4 to be a success. The fact that the loss is so low just helps their bottom line and makes it easier to make the profit that they need to keep the Gaming disvision afloat. It works out great for them, but also explains some of their financial decisions.

 

[DrRipley]

That's pretty cool. If I'm not mistaken, I think most consoles are sold at a loss, so I think this will turn out great for everyone, since Sony assumably will be a little less pressed and can dish out games and features in a more relaxed manner. I think it will show some positive effect in the quality of games released in the near future.

 

[mauricioq]

I didn't know that! That's awesome!
I guees we all feel really satisfied when you know that the product you've bought is not overpriced.

 

[themarting]

I don't see anything surprising.

Its a norm to sell consoles for a loss and make up on games.

except for now you know youre technically being overcharged for your system, since its the norm to sell at a loss...

 

[hellsing006]

The problem isn't the loss in general since most consoles do sell at a loss. The issue is how big is that loss. The PS3 was hemorraghing money and SCE was losing cash on it at a non-sustainable rate. The PS4 is different, the losses are at an acceptable enough margin that they can afford it and make back some profits on game sales. That did happen with the PS3 but the PS4 is at a much better position.

 

[BlackSolaris]

While this is a good thing, that they are making a profit right off the bat, doesn't that mean that they are cutting every possible corner when building the console? Maybe that is why some consoles got bricked so early...

 

[DPatel304]

It's normal for consoles to take a loss at the beginning. What they hope is that they'll sell enough games/accessories to make that back up. Also, as time goes on, the console gets cheaper to produce and will hopefully eventually sell for a profit as well. PS1, PS2, and PS3 all sold for a loss. PS3 sold for a huge loss.

While this is a good thing, that they are making a profit right off the bat, doesn't that mean that they are cutting every possible corner when building the console? Maybe that is why some consoles got bricked so early...

Eh, 360 and PS2 were sold at a loss and still saw major issues. I think, this time around, Sony created the console with cost in mind. The PS3 used very expensive technology like Blu-ray and Cell. Even the PS2 had it's own Emotion Engine. With the PS4, they are going with a more standard, PC-like architecture which should cut down on costs.

 

[baracksyndel]

I think people are always surprised to see consoles selling at a loss. Most hardware technology does sell for the loss. Companies mitigate those losses with sales on their software through deals that they make with developers. Consoles are no different, the point is always that the losses are re-coupable and that depends on how big that loss is. The PS1 and PS2 losses were in an acceptable range for Sony to make their money back. The PS3 losses were way to big, but things are looking up with the PS4.