Sony Reduces PS3 Production Costs Speculating Price Cuts
Sony have cut the cost of producing a PS3 console by 35% reports industry researcher iSuppli. The price cuts have created speculation that Sony intend to reduce the price of the PS3 during 2009.
iSuppli state that the latest PlayStation 3 costs Sony US$448.73 to produce, reduced from US$690.23. The new console has 30% less parts than previous models.
The lower costs bring Sony closer to breaking even to the US$399 that the console retails for, although it will move further away from this if Sony decide to reduce the retail price. Sony is expected to cut the price soon to compete with the Cheaper Xbox 360 and Nintendo Wii. In the US this year 2.8 million PS3 consoles have been sold compared to 8 million Wii consoles and 3.3 million Xbox 360s.
"If they can get costs down, they will be in a better position to cut price," said Wedbush Morgan Securities analyst Michael Pachter.
