An Analysis Suggests Sony Is Only Making 18 Dollars on the PS4

According to a recent cost breakdown by AllThingsD, the PS4 costs 381 dollars to build. Being that the console is retailing for 399 dollars, that means that, best case scenario, Sony is only making 18 dollars on each PS4, and that doesn’t even factor in the cost of marketing and distribution. For a comparison, Apple’s iPad Air costs $274 to make but retails for $499. We knew Apple was taking us for chumps!

As little as Sony is making on the PS4, the company is actually doing far better than it did last generation when it had to sell the PS3 at a loss! The PS3 originally cost $805 to make but sold at…. everyone now… five hundred and ninety nine U.S. dollars. The cost of building the PS3 eventually went down, but so did the price of the unit. In 2009, a PS3 cost $299 to buy and cost $336 to build, still selling at a loss.

The biggest expense of building the PS4 is the console’s chipset. The console’s microprocessor costs 100 dollars to build alone. Its 16 individual memory chips cost another 88 dollars all together. The harddrive costs 37 dollars and the Blu-ray drive costs another 28 on top of that. Then there is the controller which costs 18 dollars to build, which Sony is making a much larger profit on. 

All in all, Sony isn’t really looking to make money on the console at this point. The company is looking to make money on games and game distribution. It’s more important for Sony to get as many consoles in the hands of gamers as it can in order to have a larger market base when games come out. Remember, Sony makes money on every PS4 game sold, likely enough to make up for selling its console at such a low profit.

But keep in mind, this is just one examination of the console's profits, but the profit margin on the PS3 supports the data.

Source: AllThingsD

Angelo M. D'Argenio
Angelo M. D'Argenio

Former Contributing Writer
Date: 11/19/2013

11/19/2013 06:50PM


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