Teardown finds Sony closer to breakeven on PS3

SAN FRANCISCO—The latest incarnation of Sony Corp.'s PlayStation 3 reduces hardware and manufacturing costs to near the breakeven point on the video game console, according to a teardown analysis performed by market research firm iSuppli Corp.

The new 120-Gbyte hard disk drive version of the PS3, released in September, carries a combined bill of materials and manufacturing/test cost of $336.27, according to iSuppli. At a new retail price of $299, the latest version comes closer to breaking even than any previous version of the product, iSuppi said.

"Since the introduction of the PlayStation 3 in late 2006, Sony has subsidized the price of every console sold, a deficit the company has made up for with game sales and royalties," said Andrew Rassweiler, director and principal analyst of teardown services for iSuppli, in a statement.

Rassweiler added that Sony has aggressively designed out costs with each new revision.

Still, Sony is taking a loss of $31.27 on each sale of the PS3 in the U.S., iSuppli noted. But the firm's teardown analysis services determined the that the previous-generation PS3 sold for $49.72 less than its manufacturing and materials cost, based on pricing from October 2008.

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