PS3 estimated to cost $900 per unit
By: Justin Pinter

Recently, over at Merrill Lynch investment firm, a team of analysts took worked on breaking down the component costs of the PS3, finding that the PS3 will cost Sony $900 per system at launch. The way they found out the estimated price was by using figures which are based upon estimates, predictions, and prices on actual hardware. The Cell processor and Blu-Ray drive alone cost $580.

Merrill Lynch believes that the fate of Sony's console lies in the circuits of two components: the Cell processor and the Blu-Ray drive. It's up to Sony's to sell Blu-Ray drives and Cell chips in vast quantities, which will lower prices and limit the amount of money that Sony will lose on each console. Recent rumors have hinted that the PS3 will launch at $500.

To show comparison, Sony’s system will cost Sony $900 per unit to make and if they sell the system at $500 at launch, they lose $400 per console. The Xbox 360 costs Microsoft about $715 per unit to make and the system launched at $399 per system, which means Microsoft loses about $350 per console. What does this mean? Not only will Sony launch their new system $100 more than their competitor but they will also lose more than their competitor in terms of producing the consoles. This would allow Microsoft to lower the price of their system long before Sony even thinks about doing it and have more money to spend for marketing and buying exclusives.

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