Sony successfully halves PS3 manufacturing costs

An analyst for investment bank Nikko Citigroup has stated that thanks to the redesigned 40GB PS3 Sony has whittled down the amount it costs to manufacture its console from $800 to around $400.

Spong quotes Kota Ezawa as stating: "We applaud Sony’s efforts to shrink the PS3’s chips and tweak its design. Already such changes have cut the cost per machine to around $400 now, from above $800 just before it went on sale in November 2006.

"We think the biggest factor here is that simplification has become possible through a reduction in the parts count, leading to a reduction in costs."

By phasing out its higher end models, and in turn scrapping the inclusion of a memory card reader, two USB ports and a number of smaller components related to backwards compatibility, Sony has finally neared the point of making money on every machine sold.