Report: PS4 costs $381 to build
With PlayStation 4 consoles out in the wild, it's time they got torn down.
With PlayStation 4 consoles out in the wild, it's time they got torn down. The folks at IHS iSuppli have been tearing down systems for years, giving estimated manufacturing costs. According to a new report, the cost of making a PS4 is $381, just $18 less than its retail price.
As AllThingsD points out, "Sony is taking a very small gross margin or even a possible loss on the console." However, the possible loss pales in comparison to PS3. Although that console sold for $599, it cost over $800 to make. Expensive Blu-ray technology at the time was to blame.
According to the teardown, the AMD chip inside PS4 is its most expensive component, costing about $100 to build, while memory adds about $88. The highly-regarded DualShock 4 costs about $18 to make.
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replyAndrew Yoon posted a new article, Report: PS4 costs $381 to build.
With PlayStation 4 consoles out in the wild, it's time they got torn down.-
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That attach rate is great for a launch.
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Especially with such a shitty selection.
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I don't know but I remember when I worked at Babbage's in 1999 or so we were told we actually lost money on every console sold. Something like $25/unit.
That might have been bullshit to explain why our employee discount didn't apply to console hardware purchases, but if it was true (and if it's still true somehow) then it would underscore that for a retailer a console sale is a loss leader in order to sell games, accessories, etc.
Which would also feed into the theory that if the hardware makers ever try to cut the retailers out of the games pie (i.e., making the thing digital dist. only) they'd be tossed right out of the stores, or have to be sold at a much higher profit point.-
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Yeah, there tends to be either no, or a -very- small store discount on consoles. They make their money on accessories.
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Day one profitability is a bad thing? Are you crazy? Also considering the scope of the project how much r@d went into what at its basic form is a PC on sony's end? They didn't make the cup or the graphics card. I'd say most of those r@d numbers are figured into the costs that they are paying out to third party manufacturers already for the components they are assembling.
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Not only that, but per-unit production costs descend as processes mature and yields increase.
Also, if I'm reading this right, Sony makes double the margin off of one Dual Shock 4 as they do on a PS4. Also, platform holder royalties for PS4 titles, and online store and ad revenue bring in money.
Makes me wonder how far over $400 the per-unit XBox One cost is.-
But the X-Bone is selling for $500, right? Or did they drop the price?
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Yes, the X-Bone is selling for $500.
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It wasn't.
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What R&D? They're just using an AMD apu.
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Obviously you've never worked as an engineer. That's like saying GM doesn't do any work to design a car because they just buy the tires from Goodyear.
You still have to design and layout a custom PCB to hold all the components, interface them together to maximize performance for your particular needs; write drivers, an OS, and UI (as well as various tools, apps & other support SW). That's not to mention the mechanical engineering for the box itself as well as the controller (tons of design and trial & error went into that great, new DS4 everyone is raving about), software validation, hardware validation, CE and other regulatory approvals, etc. etc. There's only a few million things that have to be decided, spec'd, and designed in to work perfectly with everything else as a simple out of the box unit.
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There's an invisible dollar value attached to every box sold based on how much they make from PSN subscriptions, music and movie purchases, peripheral sales etc etc etc. We have no idea what that number is.
On avg per box it's probably not much but with economies of scale across tens of millions of boxes it ads up and is a constant stream of revenue which is what the accountants want. The more boxes they can get out there the more money they make and this is all accounted for over several years which is why they keep telling us there wont be a new box for a decade. I find that ten year plan laughable btw. -
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Do you have any idea how much the PS3 lost per console? This is nothing.
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Huh interesting, but it does not surprise me that both consoles are not losing any money(pretty sure XB1 is in the same boat) this cycle. To me they should both be able to do 1080p @ 60 FPS with no concerns or issues(those where my expectations). Devs should really have no problems with that target on day one if you consider where last gen was at with its hardware etc so I can see they cut money in certain areas and had diff targets this round.
Got to say I love my PS4 and I may get shited on for saying this and above but I wish they had added at least $150 or $200 more into the GPU and CPU or all into the GPU and took a hit. Consumer talking of course no lose is how you want to run your business so MASSIVE hats off to Sony for making an awesome console with no lose etc.
10 years is a long time I just don't think they both thought long term on either machine and maybe that was smart. If both consoles could do 1080p @ 60FPS with no effort I would not have any complaints what so ever in my perfect next gen console world. PS4 sounds like it is the closest @ that base target I believe all PS4 games are actually are in 1080p( just not 60fps, case basis).
Time will tell if this paid off for both companies, I guess in the worst they could cut the 10 year cycle to 5 or what ever so really does it matter? Maybe it really doesn't any more, if you want the best go build a PC most are aware of this now.
Might go as far to say this is how all consoles will have their business model -> no lose build the best console with what you have at a none lose target price. In Sony's case they did that hands down.
Interesting, times have changed I guess, if you want to survive you have to that's life.-
I'm also disappointed. I suppose I was a teenager at the last launch so I didn't really have a concept of what people could afford in a gaming rig, but it felt like the PS3 was significantly more powerful than the vast majority of PCs out there. It was costing £800 to build back then, imagine taking into account inflation what kind of beasts they could bring out with that kind of money now.
My rig that I didn't invest too much money into a couple of years ago is still significantly more powerful than the next gen consoles hardware wise. Obviously with things like RAM etc. you need less for a console and you can optimise better, but it still feels wasteful.
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Wow those are razor thin margins. Wasn't PS3 or Xbox losing money on each console sold in the past? Can't remember.
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Both lost money massively at launch, especially the PS3.
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It kinda rubs me the wrong way that they are making a profit at launch. I would want both companies to be taking at least a $100 loss on each console at launch. The advantage of a home console over a PC is it has basically been subsidized by Sony and Microsoft which makes gaming a little more affordable.
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Im also pissed off that they arent spending more money on me
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Devil's advocate: the whole point of a console is to either
a) Control the whole stack for your game development (see: Nintendo)
b) Lure people in with cheap hardware, cheaper than they could do for themselves (i.e., an entire PS4 costs less than a high end PC video card) in exchange for that higher-than-average hardware power point to be somewhat future-proof
Sony/MS are clearly b) in the scenario above, and have been for a few generations now. On launch day, a $600 PS3 cost $900 to manufacture. In return you got impressive (for 2006) hardware and the best Blu-Ray player for years to come.
Now sure, hardware makers like Sony/MS can get economies of scale because they're manufacturing tons of these things, and they don't have to profit on the hardware (or else it would be a lot more expensive), and some of the cost in previous generations was due to custom chip design, but really to some extent the PS4 and Xbone are essentially cheap PC's that don't run Windows.
Which to some extent might make Valve's Steam Machines a contender since they're also going to be cheap (?) PC's that don't run Windows. But you likely have a decent library for them already.-
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Yeah I probably didn't explain it right but what I meant was not that the average gamer is going to be able to construct a system as good or better for the same price, I'm saying that there's some amount of validity to the concern that a system whose hardware is taped out at the same level for a long time would ideally be more forward looking than what we may have here.
The PS3 came out in 2006. The Xbox 360 came out in 2005. They were both sold at a loss (well, the PS3 was for sure) and as a result were decently future-proofed. However that generation went way longer than anyone thought it would. The 360 is eight years old at this point. People with trilogies for franchises didn't know what to do at the end there because they hadn't planned on coming out with a part 4 before the next generation hit.
So as a result, while I think XwingVmanX is being kind of a shithead, the idea of a game console having modest enough specs to be able to be sold at cost or a slight profit, when that hardware might have to last 7-8 years, could be seen by some as disappointing. Also, if the opposite is true (i.e., the PS5 comes out in like four years) then it's going to be disappointing because if the PS5 can't play PS4 games like the PS4 can't play PS3 games then people will feel burned for a different reason.
A console whose hardware is advanced enough to be sold at a huge loss as well as having a long (but not too long) lifespan is the best case scenario, but it doesn't look like any of the hardware players want to do that this round (Nintendo included, though they did it with the Wii as well)
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is there some truism I'm missing stating that all consoles must cost 50% more than their sale price?
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The point of these consoles is:
c) Lure people into your media and entertainment walled-garden for 5+ years.
Selling the initial hardware at a loss is a damn good price to pay if you succeed.-
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The 360 had some profitable years, but by some estimates the Xbox division is still in the red over the last decade.
http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years-
well xbox1 put them in a huge hole
sorry, OG XBOX I mean
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I'm pretty sure the 360 was profitable, but that the original Xbox investment was such a huge loss lead that that division of MS is still recovering.
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lol wut?
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There are entitled gamers, and then there's you. Jesus Christ.
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never change front page posters..
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I'm a total hippy, and I don't understand this post.
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I think this really goes to show that you might as well just buy a cheap PC. You're not getting much out of a console other than a stripped-down OS and some exclusives that would be available on all platforms if people weren't buying into console gaming in the first place.
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what PC can you buy for $400 that can play BF4 at 1080p, medium to high settings, at a minimum of 30fps in SP?
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900p, but point taken.
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Can't play BF4 without paying a monthly sub, either. We could do a '5 years out' calculation and try to match the kinds of free games you'd get on PS+ with cheap shit you could get on a Steam sale. It's not a big difference (IMO).
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A PC today that will play PS4 titles at the same performance wont be able to play PS4 games 5 years from now.
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is this you admitting defeat, or are you seriously suggesting playing BF4 on a $45 Celeron and no video card?
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oh I missed the 6670... lol yeah surely that powerhouse will match the PS4. Have fun in 2 years when you can't play anything that comes out.
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but then you'd be paying $800 instead of $400 right? how do you see this working?
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.. You already own a PC. Use that to play the games on low settings for the next 2 years then spend $400.
Okay, the first time you ever buy a gaming rig you might pay a bit more, but, okay, my pc now is more powerful than the PS4, so if I just make one small upgrade in the next 7 years I'm sorted for the whole gen, then I get a new PC at the end of the gen.
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So then... spend $800 and buy 2 pc's?
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Good luck playing bf4 at those settings on a celeron and 4gb of ram. 6670 is like 60% of my 570gtx and my comp chugs at like 25fps on high settings at around 900p.
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I don't know a whole lot about budget cards but the Anandtech GPU bechmarks say an nvidia 650 ti puts out 58 fps in BF3 on 1080p Ultra quality, and I see it costs $110 on NewEgg.
I have no idea what that translates to in BF4.
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He's saying they shouldn't be making a profit at all. These units cost $381 to build. PS3s cost $800 to build in 2005 without factoring in inflation. The PS3 had to last 8 years, and it's still been cripplingly bad compared to PC for the past several years. This gen will have no longevity vs. pc hardware.
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Well, obviously not at launch. But do you really have to play a game ASAP?
Even failing that, look:
http://savygamer.co.uk/?s=battlefield&submit=Ok
This is the cheapest you can possibly get these games in the UK by meticulously abusing coupons and ridiculous listing prices. On Xbone/PS4 that gets them down to £42.
On PC? £26.
http://savygamer.co.uk/?s=ghosts&submit=Ok
Ghosts: Xbone, PS4: £45.
PC: £30.
And then I have that game on every PC (and increasingly Mac/Linux build) that I will ever own, from anywhere on Earth instantly at my disposal, without swapping any discs around.
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What a pointless subthread, you're retreading the same arguments that have been rehashed a million times in the stupid PC vs Console war. I can write this stuff for you before you even post it.
What you're not considering (and gets pointed out in every single one of these threads) is that you can't resell the PC copy, while you can resell the console copy. It's not as black and white as you're making it out to be.
Next you're going to mention how you need to buy an HDTV to use a console.
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Why on Earth would I say that?
You can't resell the PC copy, sure. But you pay 60% of the price. I don't know what it's like in the US, but over here if you trade in a game you get 25% of what you paid back. So you're paying 75% if you buy, play, sell, and you have nothing left. I pay 60% and have it forever.
Plus the developer gets 0.6x moneys from my sale, from your sale they get 1x, which then sells onto another person for cheaper, which they get 0 of, (so 0.5x average on those 2 sales that were made, because obviously the retailer expects to be able to sell your game again). Then if they trade it in again they've made 0.333x average on those sales, whereas on pc by this point they'd have made 1.8x as much money. And everyone kept their games. And paid less. And have it in a convenient format.
I don't understand your point.-
You're paying too much.
I bought the deadspace series (1 & 3), Crysis 2, and Mirrors Edge for $1. I bought another 5 or so games from the X series for ~$6.5. Bought Divinity 2: Dragon Knight Saga a couple years ago for $10. Borderlands 2 for $7.5 I think. Mass Effect 1 and 2: $10 total. All of this on the PC, all of them high end games. Also, Planetside 2: $0.
You get the idea...PC, you can shop on the cheap for great games between steam holiday/summer sales and humble bundles. I love it...the most I've spent on a game in the past few years, aside from Skyrim, was on Kickstarters like Planetary Annihilation and Star Citizen, but even then that's only $20-$30 tops if you go for just the base game.-
Yeah, I understand that. Obviously after a year or two PC prices are ridiculously cheap, especially during the Christmas sale. But not even taking that into account, just based off prices on consoles vs PC at launch, you still save money even if you were going to trade the console games in afterwards.
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You're rehashing the same argument as ever. Yes we can't resell games, we know. For a lot of person, the pc is a better value proposition, believe it or not.
From cheap digital downloads, to more diverse games, back compatibility allowing me to play 10 years old games that i didn't resell. These are reason enough to spend $300 more on hardware.-
wow... that's exactly what I was pointing out! they're the same tired arguments and there's no point in even bringing them up. Nothing new or interesting ever gets said, including here which is why I wrote off this thread earlier. I know how this entire conversation goes because I've read it a hundred times!
I wasn't arguing for or against reselling games. Just pointing out something he completely ignored in his simplistic analysis. I'm not arguing PC gaming as a whole is cheaper or more expensive than console gaming either, just pointing out that it's NOT as black and white as people are making this out to be, every. single. time. this stupidity gets argued.
FYI I've got an amazing gaming PC and a backlog of 500 games on Steam, so It's not like I don't understand the appeal of the platform.-
.. "Simplistic analysis".
I already answered your question completely, and showed you that you were utterly wrong, and even if you resell at an optimal price you STILL lose money, even at launch games, not counting ridiculous christmas sales, and I see that you didn't reply to it. And now you're here bitching that I couldn't address your problem.
But I did address your problem. I showed you that you were wrong. You just didn't reply to it. Because you have no retort.
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Believe it or not a lot of us don't resell our copies of the game. The "but but but used games!" argument is the same tired edge case refrain as "but what if I want to play the online-only game on an airplane!"
Your being able to resell games is not a good enough reasons for consoles to continue to exist.
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You're obviously invested in the PC. That's fine. I'm not invested in either. I was a PC gamer from the mid to late 90's to most of 2000's but migrated to console once I saw every PC game was starting to be tied to the Steam DRM.
If I ever decide to move somewhere else or move out of gaming entirely, I can sell all my console games and hardware. All of your spending is sunk. If you want to keep sinking cash in that, that's your prerogative. Have fun!-
I love the passive-aggressive sign off there. HAVE FUN!
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Nice assumption, but completely untrue. I'm a Nintendo fanboy.
I've bought every Nintendo home console at launch since the N64 (and I also have a SNES), a Master System II, a Mega Drive, a Gameboy, Gameboy Pocket, launch GBA, launch NDS, launch 3DS. Both myself and two of my housemates own 360s, one of my housemates has a PS3, and someone who isn't in the UK right now has long term left me his PS3 to take care of.
I have never sold a video game. I have ~30 SNES games, ~20 N64 games, ~60 Gamecube games, ~30 Wii games, ~20 360 games, ~30 DS games, 3 3DS games, 290 Steam games.
I'm not invested in PC. I'm not a PC gamer. I've spent way more on consoles. When I owned a Gamecube, I was a teenage kid with only birthday/Christmas/pocket money to spend on video games. But I spent probably £1500 on gamecube games. I've probably spent less than a grand on my Steam games and I've been using it for 5 years (and have 4.5x as many games for the same price). As well, I heavily invested in the GH/RB series so my price per game rockets there (I got the pro guitar and pro keyboard too, 3 drumkits, been through 4 les pauls, 2 ghwt guitars, 1 xplorer, 1 rock band guitar).
I am a PC gamer second. But I also understand that the PC price structure is insanely better value, more developer friendly, more user friendly and makes more sense. If Valve controlled the console business, everything would be amazing.
Also, I can sell my hardware too. Sure, it won't go for a good price. Neither will your consoles.
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http://steamcommunity.com/id/Alexrose/games?tab=all
With my 290 games? Yeah, probably.
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The last time I paid $60 for a game was the orange box. There are so many pre-release sales now the most one has to spend is $48 for a new game, there is always 20% off discounts.
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$40 on amazon.ca right now!
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Probably mentioned already, but ps+ yearly fee will be a must for most gamers these days, which they didnt enforce as much in ps3 days.
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