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Sony to delay PlayStation 3 US launch until component costs fall?

by Bob Crabtree on 19 February 2006, 12:59

Tags: PlayStation 3, Sony (NYSE:SNE), PS3

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The high cost to make the PlayStation 3 games console - around $900 per unit, initially, for parts alone - could force Sony to delay the US launch until components become more affordable, something that could take three month or even six, according to a report by financial analyst Merrill Lynch.

And that could mean the PS3 missing its expected Q3, 2006 US launch and not even being in US stores for Christmas 2006. Where such a delay would leave the UK launch date is anyone's guess.

Merrill Lynch reckons that four new and novel components are having an especially big impact on the high build-cost, with the PS3's Blu-ray optical drive ($350) and IBM Cell processor ($230) the biggest factors. The others are the Nvidia RSX graphics processor ($70); and XDR RAM ($50), use of which, ML says, is unique to PS3. Three years down the line, it's estimated, the cost for that quartet will have fallen to $240, with the total components bill being just $320.

In its own report on the report CNET says,

Sony did not immediately respond to a request for comment. In the end, we probably won't know what's going to happen until at least May, when the video game world converges on Los Angeles for E3, the industry's biggest gathering. But it's looking more and more like Sony may be forced to keep mum even there, and that certainly wouldn't play well.

But is this all scare-mongering or a realistic appraisal of Sony's situation? Have your say in the HEXUS.community.

Update - February 20, 2006
Responding to the Merrill Lynch report, Sony is denying that the launch of the PlayStation 3 will be delayed, according to The Seattle Times, though the Sony spokesman mentions only the Japanese launch, not the launch in the USA. See this HEXUS.headline.

Thanks to our eagle-eyed gaming guys for alerting us to the piece in The Seattle Times. Check out their headline which points out something that we should have noticed yesterday - that Merrill Lynch's bill-of-materials analysis for the PS3 actually totals $800, not $900 as the report states!

Mind you, $800 still seems a scary amount and Sony isn't commenting at all about build costs.

HEXUS Forums :: 14 Comments

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all about the hype…Good old Sony! They are starting to bore me now though.
I wouldnt have thought that an X360 would cost just £200 odd for the core system… Because in actuality they're more like £500 where Big Bill and his Gate's load of money will swallow the extra £300 to allow for the X360 launch… they're bound to gain those back for selling their games at £35 a piece.. not to mention Xbox LIVE..

It woudnt be next gen if the technology that built it cost as cheap as dirt.. There will be compromises…

I would have guessed Microsoft might have a hand in this… Making the competition look silly or making their competition's upcoming product sound horrendously priced seemed pretty Microsoft to me…
they're bound to gain those back for selling their games at £35 a piece..

where have you been looking there more like £50 a piece
I bought two games in tesco yesterday, £39.99 each, play.com have them for the same.

Its true though, the consoles do require the manufacturer to swallow cost, but given the cost of developing games is going up you have to factor in this is most likely driven by production and design costs of the actual system,

Meh, I'm waiting for the Revolution. I doubt Nintendo will have to swallow such a large manufacturing cost. If developers want my business next generation, they have to include Nintendo in their plans. I buy the hype (a rarity for me). I don't need to waste 100+ hours every time Final Fantasy comes out. If it doesn't come to the revo, I won't play FF anymore. I hate Sony.