Sony successfully halves PS3 manufacturing costs

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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.