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Playstation 4 production costs: $381

Posted In Video Games - By John Script On Thursday, November 21st, 2013 With 0 Comments

The PlayStation 4 was just released last week in North America and it can be bought for the price of $399. In Europe, it will arrive on 29th November and it will be priced at 399 euros. While trying to find an answer for the question “how much does it cost to produce a PS4?”, folks at AllthingsD have came up with an answer that’s pretty interesting.

ps4 production costs

Before even talking about the fresh PS4, we need to take a time travel into the past, back to the year 2006. At the time, the just released PS3 was sold for $599. But Sony was losing money at this price because the actual production costs for the console were $805. In 2009, with the PS3 Slim, the cost of production was $339 and the sale price was $299. I can only conclude that they were making deals with game developers to get a share of every game sold for PS3 and PS3 Slim.

Now, let’s get back to present days, when the release of 2013 market a new era in the gaming industry. The PS4 is sold at $399. If we are to believe the estimations of AllthingsD based on the findings of the analyst Andrew Rassweiler of Teardown Services, the PS3 console costs $381 to produce. Therefore, Sony has a marginal profit of $18 per each console sold. It is obviously that the Japanese gaming company is making money not only from the actual sale but also from the games. It is interesting to see that they have finally managed to cut down the production costs under the official price.

Looking at the individual components of PlayStation 4 we find out that the processor is the most expensive hardware component with a cost of $100. The 8GB of RAM are estimated to cost $88, the Seagate HDD costs $37 and the optical drive costs $28. According to IHS, the production cost for the controller is $18. You should note that the AllthingsD estimation talks about the actual console, without the costs of Research & Development, marketing budget and deliveries. All these components will definitely raise the price per unit.

source: AllthingsD

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