iSuppli says PlayStation 3 costs $806-840 to make

— 12:10 PM on November 16, 2006

A team of analysts at market research firm iSuppli has taken apart a PlayStation 3 console and priced the individual components to get an idea of just how much Sony is losing on each unit. According to the analysts' findings as relayed by Gizmodo, the $599 "premium" flavor of the console costs a whopping $840.35 to manufacture, while the $499 base model is only marginally cheaper at $805.85. Surprisingly, the analysts say the most expensive component is not the Cell processor ($89) or the Blu-ray drive ($125), but the Nvidia-built "Reality Synthesizer," which costs Sony a cool $129. If these findings are correct, Sony is effectively losing $241.35 to $306.85 on each PS3 sold.

On the other side of the next-gen fence, Business Week estimated last year that Microsoft was losing a more reasonable $126 on each of its $399 Xbox 360 consoles. Production and component costs have likely dropped for Microsoft since then, too.

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