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Sony making just 18 bucks on every PS4

Sony may have sold over a million PS4s but the company is making just $18 on every console sold, according to an analyst report.

The report, released later today, says each Playstation 4 costs Sony about $381 to manufacture (including parts and assembly) and sells for around $400 (all figures are in US dollars).

If true, the news means the figure is actually a marked improvement on the past, when Sony and other companies like Microsoft would sell their consoles at a loss and recoup the money through software sales.

Every $599 Playstation 3 cost over $800 to produce, while both Microsoft's Xbox and Xbox 360 were sold at a loss.

“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,” says Andrew Rassweiler, an analyst with IHS.

Microsoft's Yusuf Mehdi told GamesIndustry.biz that his company, like Sony, would be making a profit on the Xbox One from day one, unlike its previous efforts.

"We're looking to be break even or low margin at worst on [Xbox One] and then make money selling additional games, the Xbox Live service and other capabilities on top," he said.

"And as we can cost-reduce our box as we've done with 360, we'll do that to continue to price reduce and get even more competitive with our offering."

The most expensive part of the Playstation 4 is the $100 processor chip made by Advanced Micro Devices, followed by the $88 spent for 16 discrete memory chips.

Rassweiler told AllThingsD, who got an early look at the report, that the PS4's mammoth AMD chip was the largest processor his company had ever seen, at a size of 350mm2.

"This chip is just gigantic,” Rassweiler said. “It’s almost three times as big as the next biggest chip we’ve seen.”

Each Playstation controller costs about $18 to build and contains an audio chip from Wolfson Microelectronics, Qualcomm Bluetooth chips and a motion sensor from Bosch.

The console is due to go on sale in Australia 29 November while Microsoft's Xbox One will be released on 22 November. The PS4 sold over a million units in its first day.


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