ps3s to lose up to $306 each at launch

November 16th, 2006 post a comment stumble it! by: technabob

Market intelligence firm iSuppli has completed their preliminary analysis of the costs to manufacture Sony’s Playstation 3 consoles. It looks like the two PS3 models (20/60GB) will lose between $241 and $306 each, not including the cost of accessories such as cables, controllers, packaging or shipping.

The estimated material and manufacturing cost for the $499 retail, 20GB PS3 console is $805.85 and the $599 retail, 60GB console is estimated to cost $840.35 to build.

It’s not uncommon for new consoles to be sold at a significant loss, with the aim to gain market penetration, sell high-margin games and accessories and to eventually lower production costs. Just a year ago, Microsoft’s Xbox 360 was estimated to be losing up to $200 per console, and now is produced at an estimated $75 profit. That all said, with concerns about limited availability of parts and launch titles, it may be several years before Sony will be able to make a profit on the PS3.