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Sony’s PlayStation 3 game console may face delay as a result of difficulties with manufacturing of key components as well as high costs of materials, according to a report from Merrill Lynch research company. The firm suggests that initially the PlayStation 3 building cost will be as high as about $900.

Merrill Lynch analyst from Japan Hitoshi Kuriyama said that the company may not only delay the launch of the PlayStation 3 to cut down its losses, as it will not be able to sell its console for more than $400 - $500, but also limit the number of manufactured units. According to Mr. Kuriyama, there would be 2 – 3 million PlayStation 3 consoles available in 2006.

Currently Merrill Lynch assumes that 1.2 million PS3 game consoles will be sold in North America and 0.5 million in Europe in 2006 and 6 million in North America and 5 million in Europe in 2007.

“Sony’s decision to implement an ambitious new processor architecture – the Cell – not only took a great deal of design effort, but also has resulted in a processor that we think will cost Sony at least $230 per unit initially,” a report by Merrill Lynch states.

According to the research company, the most expensive component of the PlayStation 3 will be its Blu-ray disk drive, which will initially cost $350. The second most expensive part of the gaming machine will be the Cell processor which will cost Sony “at least” $230 per unit to make. Nvidia’s RSX graphics processor will cost $70, while for 256MB of XDR memory as well as 256MB of GDDR3 memory Sony will have to pay $50, believes Merrily Lynch. In total, the price may reach $900 just to manufacture one PlayStation 3 console.

In three years time after launch the cost of manufacturing the PS3 can reach $320, believes the research firm. Merrill Lynch notes that the price of two most expensive components – the Cell processor and the Blu-ray optical drive – can tumble significantly already in 2007 when the microprocessor is shifted to 65nm production technology, while the Blu-ray drives reaches high-volume manufacturing.

“There are additional reports that delays have surfaced on the Nvidia-designed RSX graphics processor,” the report also read.

Sony Computer Entertainment Inc. did not comment on the news-story.

Discussion

Comments currently: 13
Discussion started: 02/23/06 08:30:59 AM
Latest comment: 05/11/06 01:44:10 AM

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1. 
First of all, you should change the title of your article as it's misleading. Second, people with common sence take whatever Merrill Lynch has to say with a huge bucket of salt as they have a tendency to screw up, thirdly Sony have denied the reports so they're complete hogwash (Do people really think that Sony would construct the PS3 for $900?).

Last but not least, why are you only reporting this now? It's been around for about two weeks, furthermore you've surely realised that multiple sites have reported on this garbage so why add another this late in the game?
0 0 [Posted by:  | Date: 02/23/06 08:30:59 AM]
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2. 
First of all, I respect the effort that you've taken to reply to me. I can't deny you that. I find the title misleading due to the fact that it doesn't question if the PS3 will cost $900 to make, it's stating it as if it were fact. Which it isn't. Only Sony knows how much it costs to construct the PS3, so it's merely speculation.

I understand that you have a right to post news such as this, but it's the fact that it's been done to death. I've read numerous websites that have the same story, over and over again. Like I said, I just don't see the point in adding this article yet again to another website because it's old news, people are aware of the this and I just find it highly unoriginal.

But, as you said, viewers of your own website perhaps have not heard of this.

Anyway, I fully understand that the PS3 is going to be somewhat expensive to make and that Sony will not profit from it for at least 8 months (Again, speculation of course, the only thing we have at the moment) but I just think the report is wildly overestimated and, as you stated, just a source of media attention for Merrill Lynch.

Lastly, I'd like to apologise if I came across quite harshly as I'm just tired of all this bad publicity and speculation flying around at the moment.

On that note, I'll call it a day!

Take it easy,

Chris.
0 0 [Posted by:  | Date: 02/23/06 03:54:13 PM]
Reply

3. 
why does the GPU only cost $70??? Why do we have to pay $400+ to get a card like the PS3's in our computers?
0 0 [Posted by:  | Date: 02/25/06 05:04:52 PM]
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